What a disaster and an embarrassment. https://www.wsj.com/finance/banking/wells-fargo-credit-card-rent-rewards-8e380852
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Chuckles and McKinsey. What could go wrong!?!?!
Lots of id--ts get paid a lot for doing a lousy job. CS is the # 1.
It’s not Charlie’s fault. McKinsey’s running the back and has been for years.
At least for the favor they can ask Bilt to give some space for the other cards because Digital AW3 stands bleak in front of that startup app. So, why Wells Fargo app?
Put this down as yet another argument supporting the fact that the non-lifting of the asset cap may help Wells Fargo in the long run. Just think of all the bad deals such as this that Charlie would have made if the asset cap had been lifted.
Was just reading this....typical WFC d-mbasses rolled out this new product Big Bang style instead of in select markets to gauge its popularity and profitability.
More proof that Schart is a one-trick pony who only knows how to destroy and not build.
@sjd+1t4V9pz6, Wells made a number of incorrect assumptions in their underwriting? Nah, that's impossible! 😂
Didn't Charlie work manage Visa? Wouldn't he know the risks of the Bilt arrangement? Is this an example of the stagecoach being driven into the ditch?
So much efficiency. I wonder how many people they will outsource to cover the costs of yet another executive-driven failure.
Cards itself is filled with ego and do not believe in user research. That is why business cases get approved based on closeness with the supremo and fall flat on returns. With the myriads of product lines that keep them busy, would be wonderful for a similar research on business success metrics for all.
Wake up folks before you launch the next best copy-paste consumer credit card.
I love the Bilt App and yes only pay my rent 😀
The McKinsey guy had approved this! He is KS’s best bud. Only knows how to compete.
https://www.doctorofcredit.com/wells-fargo-losing-up-to-10m-per-month-on-bilt-card/
Unbelievable!!
https://onemileatatime.com/news/bilt-economics-wells-fargo-losing-money/
A happy result of Better Together. I wonder if a team came up with this brilliant plan around the water cooler.
Be great at execution.
Funny the property manager at my apartments switched over to only accept rent payments from the BILT website. You are still allowed to pay directly with a checking account but they heavily market the credit card to you in order to earn points. I wonder how much they paid for marketing/lobbying large residential property management companies. In order to earn points you have to make a minimum of 5 qualifying transactions on the card per month which isn't worth the hassle to keep track of each month in order to earn a few $ "rewards" for paying your rent. Also advertising no credit card fees on rent payments means Wells is eating those swipe fees. I'm sure the product owners that came up with this will get promoted.
Everyone in fintech has been saying that the Bilt credit card ($3.1B valuation) is too good to be true; How can you get cash back on rent payments?
Turns out they have an unsustainable deal with Wells that is losing the bank hundreds of $millions. Wells made a number of incorrect assumptions in their underwriting.
They assumed that it would be a top of wallet card for renters who carry balances. Instead, a lot of savvy consumers (myself included) use the bank for the minimum required to collect the rental points.
Wells assumed that 65% of card-purchase volume would be non-rent, generating interchange-fee revenue.
The reality is inverted... most of the volume is rent payments on which they don't earn much.
Wells also assumed that 50-75% of the balances would be revolving, earning them interest. The reality is they mostly have cardholders like me who don't carry a balance - only 15-25% are revolving.
Wells is paying 0.8% to Bilt on rent payments, even though the bank doesn't get interchange on them. Wells has a massive mortgage business and thought that they'd be able to cross-sell mortgages when the renters become homeowners but that hasn't panned out.
Kudos to Bilt for negotiating a ki-ler contract that doesn't expire until 2029... but I wonder what the future looks like after that. Wells says they won't renew it as-is.
In the meantime - it's a great card... pay your rent via the card and make 5 other transactions a month to get 1% back on your rent.
Losing money at a $120 million per year pace, and the contract isn’t up until 2029. Great job Chuckles!
Hotels.com anyone?