Tandem CEO about scrapping the cashback

trient

Pretty interesting read (also about Bo).

But this is priceless:

[...] Knox defended the move, explaining the card’s 0.5% cashback offering brought in users who didn’t need to borrow and were exploiting the free-offering.

“We ended up attracting the wrong customers…The people who are good at saving money are actually the people who are f*k*ing loaded… We realised we were going to have to let those guys go. They were losing us money.”

Oops.

https://sifted.eu/articles/tandem-fundraise-2020-cto-left/

callum9999

If they genuinely didnt realise that good reward programs attract those with good financial practices then they're utterly incompetent and shouldn't be working at, let alone running, a bank.

I'd wager they just didn't care at the time, tried to grab as many customers as possible to get good statistics for fundraising and would deal with the issue later.

Bendo

Oops indeed. That quote is gold. Basically saying they want only poor people who will make them money. Best go and amend my trust pilot review with that.

If you a !!!!!! loaded, and you have to be to have the 50k in the account to benefit over Marcus, they don't want you. Clearly this guy shouldn't have been allowed to speak to the media.

2e0arr

Captain Mainwaring , Sgt Wilson, Private Pike pompous idiots worked at a bank ,,,,, don't panic LOL

The_Urbanite

Few companies would be brave enough to be that candid about customers in public.

But it's true. Financially literate people who deal hunt and seek value all the time engage in practices that make them marginally profitable or downright lossmaking as customers. Companies should be sharp enough to foresee this and for their own sustainability, put measures in place to limit the activities of unprofitable customers to a level that is affordable for them. 

The rewards offering credit card companies are surprising as most of them tolerate the actions of solvent people who are not profitable for them. Virgin Money, Amex and now Tandem are the exceptions. The startups who have money thrown at them often do generous promos but it can't last forever!

Credit cards earn money from interest and fees. Value seekers are likely to have an array of accounts that help to avoid these costs so they are really targeting loyal types who are prepared to pay those charges.

There are some businesses that make money from value seekers. Skrill for example welcome these people who earn them money by transacting with their partners, who then pay Skrill for the custom.  In recent months Skrill introduced a new rewards scheme called Knect and invited selected customers to trial it before general release, with the caveat that there would be unspecified changes to the rewards scheme on the general release date.  I suspect they intended those specific customers to abuse the trial so they could identify and fix all the loopholes identified with it. I didn't go that hard on them but clearly there were people who had no mercy at all as it only took a matter of days for them to start introducing limits during the trial!

phillw

Bendo said:

Oops indeed. That quote is gold. Basically saying they want only poor people who will make them money. 

Why is everyone acting like he's saying something we didn't already know?

The_Urbanite

phillw said:

Bendo said:

Oops indeed. That quote is gold. Basically saying they want only poor people who will make them money. 

Why is everyone acting like he's saying something we didn't already know?

The problem is that he has outwardly stated it. That kind of behaviour can alienate people overnight. A lot of these fintechs quietly ban the individuals who keep taking more than they are prepared to give. They make up some excuse about regulation or even tell you they reserve the right to terminate the account without giving a reason. Few are unwise enough to state that a customer is costing them money - it's bad PR.

Monzo did when they wound down debit card deposits, but in a much more tactful and engaging manner.