< All Posts

Rethinking what it is to be a credit card in 2017

By: Aaron Frank on 30 June 2017

At Final we spend a lot of time thinking about what it means to be a new credit card issuer in this day and age.

Aside from providing a product that needs to work 24/7 for its cardholders and managing the risk of a lending business - table-stakes for any card issuer - there’s a lot of focus here on a particular theme that’s gotten almost zero “play” to-date within the card industry.

And then I saw a quote this week from David Velez, CEO of Nubank. It really hit the nail on the head on this theme: the shift from Analog to Digital.

He’s absolutely right. Credit cards are in the Analog phase of their existence in the same way that Netflix’s “DVDs sent through the mail” was their pre-streaming, Digital existence. Reed Hastings, CEO of Netflix, even mentions Andrew Tanenbaum’s quote as laying groundwork for understanding where Netflix would grow to: “Never underestimate the bandwidth of a station wagon full of tapes hurtling down the highway.”

So what exactly is the analog, no pun intended, in credit cards? Are we careening down the highway with a station wagon full of mainframes, plastic cards and reams of paper?

The answer: seems like it! As you investigate deeper, most of today’s credit card issuers: still acquire a huge percent of customers by sending millions of pieces of mail a month, still have heavily phone tree-based customer support, and fundamentally struggle to break off the chains of 40 years of “if not broke, don’t fix it” operations.

Reliance on legacy cores (coded ~30+ years ago) doesn’t help either, but it’s going to take more than a departure from them to see real change in the industry.

And that is where we focus each and every day on making Final different.