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The co-branded credit card space is a mature market. Chase and American Express have large deals with airlines and hotels as well as the likes of Amazon and Disney. These are typically huge programs with not just millions but tens of millions of customers. But what about those Fortune 500 companies that are not big enough for Chase or Amex but still want to do their own co-branded credit card? That is where Imprint comes in.
My next guest on the Fintech One-on-One podcast is Daragh Murphy, the CEO and Founder of Imprint. Daragh realized that the bank technology being used to power the co-branded card space was decades old and inflexible. He saw the opportunity to build a new tech stack to provide a much better experience for brands. And they didn’t take any shortcuts to get there.
In this podcast you will learn:
- What first brought Daragh from Ireland to the U.S. and why he stayed here.
- How he landed on the idea of co-branded credit cards.
- The hardest part about building a credit card company.
- How granular they can get with their rewards program.
- Why Chase and Amex only have a limited number of co-branded programs.
- The size of company that Imprint is looking to partner with.
- Why they do no outbound marketing whatsoever.
- Why a typical billion dollar company shouldn’t do a co-branded card program.
- How they were able to get started when dealing with large enterprises as a startup.
- How they embed the Imprint technology into their clients’ app.
- The thought process we went through when choosing their bank partner.
- How long it took them to build their own credit card platform.
- How they are getting their card to the top of wallet.
- Why they decided to build a call center themselves.
- How they have deployed AI into their customer support.
- What is next for Imprint.
Read a transcription of our conversation below.
FINTECH ONE-ON-ONE PODCAST NO. 521 – DARAGH MURPHY
Daragh Murphy: I’ll give you an example. So we have a big grocery partner, and people spend a lot of money at that grocery partner on their own branded products. So, if you buy the grocery version of Oreos or Coca-Cola or Lay’s, the partner makes more money than if you buy Coke or Oreos or Lay’s. We built a rewards system with them, a rewards program with them that gives you 5 % on own brand, and 1.5 % on every other dollar in the cart. And to do that, we have to integrate with their point of sale. We have to monitor every transaction; we have to calculate your rewards and immediately give it to you. Only we can do that because we have the ability to have a modern architecture that integrates to the point of sale and it’s on our platform.
Peter Renton: This is the Fintech One-on-One Podcast, the show for fintech enthusiasts looking to better understand the leaders shaping fintech and banking today. My name is Peter Renton, and since 2013, I’ve been conducting in-depth interviews with fintech founders and banking executives. On the show today, we are talking co-branded credit cards with Daragh Murphy, the CEO and founder of Imprint.
The co-branded card space has been dominated by Chase and Amex and to a lesser extent, other large banks. But these banks have two things in common. They are built on legacy tech and their co-branded cards are only available to the very largest brands. Daragh saw the opportunity to build new technology for this space that could serve large enterprises that were not quite big enough for Chase or Amex. We get into how they have been able to do that in detail in this conversation. Now let’s get on with the show.
Welcome to the podcast, Daragh.
DM: Cheers, Peter, it’s great to be here.
PR: Great to have you. So, you know, you are a foreigner just like me. I would love to get some background into, you know, before you started Imprint, what first got you to this country, and what are some of the highlights you’ve done prior to founding Imprint?
DM: Yeah, I moved here when I was 20. I just finished university in Ireland, and there’s a rite of passage where people will do a J1 visa if you’re Irish, and it’s three months. You can come and work in the US, and friends of mine promised that they’d put me up in Chicago for the summer. And so I moved, and I thought it was going to be a two-bedroom apartment with three friends. And it was a two-bedroom apartment with almost 11 Irish guys.
PR: God.
DM: Yeah. And they told me they had a job for me, which was in one of the most happening bars in Chicago, but right beneath the apartment. And we did that for the summer. And you watch all these movies about America when you grow up abroad. I’m sure you had that too. And you don’t believe it’s real. And you know, the real thing is even better. And decided I couldn’t go back to Ireland. So, I ended up chaining a couple of different visas together and wanted to become a professional here. Went to law school at Duke for a year, became a lawyer and practiced for three or four years, definitely not built for being a lawyer. Ended up going to McKinsey for two or three years, and then started Imprint four and a half years ago. So that’s kind of the whistle stop tour.
PR: Okay, okay. Well, that’s interesting. That first summer in Chicago must have been a quiet time, I imagine, with 11 Irish guys above a pub.
DM: For sure. you know, America is the greatest country on earth, especially if you have any ambition.
PR: Yes.
DM: At 20, when you really see what it’s like, it’s impossible to leave. At least it was for me.
PR: Yeah. Well, I arrived here at 25, so a little older. I have a similar thing. I wanted to experience it, and I wanted to start a business here. And it’s just the greatest nation, the greatest country in the world to start a business. Anyway, let’s get to Imprint. What was it that you saw? Were you itching to start a business, and you just saw this idea, or did this idea kind of come into your lap, and you thought, I’ve got to pursue this?
DM: I think there are two things that happened with me. One was, you know, we talked about America and just how commercial it is and how it feels like there’s just, you know, it sounds corny, but there’s real opportunity to do things. And for me, over the course of my seven or eight years as a lawyer and at McKinsey, which are pretty risk-averse places, I was feeling, God, I really don’t want a boss, or I don’t think I can stick out the corporate life. And what happened was I got a green card. I had saved some money, and I had an experience with another business. I said, look, this is it. I’ve gotten the security I need at 29 or 30 to try something. If I don’t try it now, I never will. And my dad was an entrepreneur. And so I’d seen his journey and the ups and downs of that. And it kind of felt like I had to try. And so that was one piece. I was working on a slightly different idea to Imprint. And so we can talk about what Imprint is in a second. I was working on how do we replace the technology at credit unions and make them more efficient. It’s tough for credit unions, they’re subscale, but they’re great businesses. And I met the folks at Thrive Capital, and they kind of said, that’s a fine idea, but what about a bigger opportunity, which is in the credit card space? What do you think of that? And so I ended up spending three months in the pandemic with one of their partners, a guy called Gaurav Ahuja, who’s now my co-founder. And we kicked this idea around nonstop. In the pandemic, you know, outside, socially distanced, walking around New York, you know, snagging a beer, and then we’d chat about what this could be. And then the proof of the pudding was we put a deck together and tried to sell it to as many people as would listen. And there’s a certain point where you’re trying to sell something to somebody and actually, they’re telling you why they need your thing, rather than you telling them why they need it. And that was happening a lot in that summer. We would talk to people who were big businesses, show them our deck, pretend we were a real company, and they were saying, yes, if that existed, we’d give it a real thought. And that for us was, wow, there’s a there there. There’s something to really pursue here.
PR: So what was the idea that you were presenting that summer?
DM: Yeah, so co-branded credit cards, which is a big industry, right? So one one-third of spend in the US on credit cards is on a co-branded credit card. And the most famous example would be the Delta Amex card. It’s co-branded because you have Delta, because you have Amex on it. And more and more brands are looking to launch their own financial products, particularly credit cards. And those brands can be hundred-year-old grocery stores. They can also be modern online travel agencies. And the problem is, their only partners before Imprint existed were legacy banks. And most of these legacy banks are stuck. And it’s not that they don’t want to modernize and be more technologically oriented and provide a better customer experience. They just can’t. Because they don’t own the technology on which the credit card runs. In fact, every credit card in your wallet runs on legacy technology. It’s a bank, but under the bank are these legacy platforms like TSYS and Fiserv that you may never have heard of, but they’re built on the 1980s mainframe, 1970s mainframe technology. And so the banks can’t modernize, and all the brands are modernizing. You’re either going to own your customer relationship, and build an app that they use, or you’re going to lose them to Amazon and to Instacart and to DoorDash. And so that was the opportunity. Step in, and build a more modern co-brand experience that brands can be proud of on our own technology stack. The outcome will be more customers sign up, it’s easier, it’s fairer, and they use it more, which grows the pie for the brands.
PR: So there are fintech companies focused on the credit card space to, you make it more efficient. Marqeta is one example. That’s, know, their whole thing is modern card issuing. That’s sort of their mantra or their slogan. But what are you doing differently than what a Marqeta or some of the others bring to the table?
DM: I could be wrong, but I don’t believe Marqeta has their own credit card ledger. And so not to get too technical, but the hardest part about being a credit card company, if you’re going to own it all yourself, is building a modern ledger so that every time the card gets swiped, you can track the transaction when you apply interest, you can do it when somebody returns an item and you have to do a chargeback or process a dispute, you have to get all that right. US consumer credit cards are the most regulated financial products on earth. So you have to do all the things I said, and you have to have a hundred percent accuracy. And so we built all of it ourselves. There aren’t other modern platforms that have built it all themselves. And so when we compete with anybody in the market, what we’re able to provide the partner is a better experience, particularly around how the rewards work. And I’ll give you an example. Okay. So we have a big grocery partner, and people spend a lot of money at that grocery partner on their own branded products. So if you buy the grocery version of Oreos or Coca-Cola or Lay’s, the partner makes more money than if you buy Coke or Oreos or Lay’s. We built a rewards system with them, a rewards program with them that gives you 5 % on own brand, 1.5 % on every other dollar on the cart. And to do that, we have to integrate with their point of sale. We have to monitor every transaction. We have to calculate your rewards and immediately give it to you. And only we can do that because we have the ability to have a modern architecture that integrates to the point of sale and it’s on our platform. For everybody else in the space that we compete with, even for Marqeta, they don’t have the ability to do that real-time integration, to monitor transactions, to instantly give rewards, and to also process the transaction underneath it.
PR: So you’re going right down to the SKU level at a random grocery store, not random, I guess, but a customer of yours.
DM: Yes, we have.
PR: You have to load up all their SKUs into your system.
DM: Well we don’t do it that way, we execute a client side with a tag rather than on our side, but a similar thing. And so that’s the Holy Grail, though. We should be able to reward customers for the actions that drive the most value for the customer and for the brand. And you take it one step further. Different customers have different lifetime values. Let’s give your best customers the best rewards. It’s like you’re booking an airline trip, and you’re going to Bucharest, of all places. Let’s help you get rewards while you’re on the trip. And that’s something we’re about to power with a new partner that will be announced very soon. Trip-specific rewards. So you have the best travel card. It’s not just 5 % at the airline; it’s 4 % or 5 % when you’re on the trip. You’re booking an Uber; you’re eating at a steakhouse. And that is the modern version of a credit card experience. And that’s what we provide that nobody else can.
PR: Right, right. Okay. I am a big fan of rewards cards. I’ve had them for about two decades. I’ve been playing the rewards game. You know, Chase, Amex, Capital One, they all have, they’re not unsophisticated. I would say with their rewards, sometimes they have rolling rewards where some quarter there’s going be different rewards to next quarter. So they do have some sophistication, but what you’re saying is that they’re less flexible than what you’ve created. Is that fair to say?
DM: That’s fair to say. And remember, Chase has five co-brand partnerships that matter, and it really isn’t in the market for other co-brands. And there’s massive brands out there, like grocery stores that span the whole US that have hundreds and if not two to three to a hundred billion dollar of sales, they’re not partnering or they don’t have the opportunity to partner with Chase and with Amex. And everybody else can’t do that. So we then stand in and can partner with these massive businesses that have loyalty and give them something that nobody else can. And so maybe Amex and Delta, and in fact they can, right? They can both invest hundreds of millions of dollars into that partnership because it’s so important to both of them. Most other brands, even though they’re massive, can’t do that.
PR: Right. You don’t see Chase partnering with a small 20-store restaurant, for example. That doesn’t happen.
DM: But you know, that’s the total extreme example. I’m talking about businesses with a hundred billion dollars of revenue that are still outside.
PR: They’re not big enough for Chase or Amex.
DM: Correct. Especially because Chase and Amex have their own big portfolios of cards too. And so every minute of attention for them is either on a Sapphire Reserve card or on the co-brand card. But the co-brand card has to really matter to take any time away from the Sapphire Reserve card.
PR: Gotcha. Okay. So then what’s involved when someone is interested in creating a co-branded card with you, they might be a, you know, say they’re, they’re a billion dollar company, which there’s obviously quite a few of those out there. What’s involved? What do you need to get set up, and how long does it take?
DM: Yeah, and not to be facetious, right? Or sound cocky for such a young company. If you have a billion dollars in sales, we would tell you there are so many other things you could do that will have a levered impact on your business. You shouldn’t do a credit card today. And so, and that’s why it sounds crazy, right? But in reality, we want to, and we should partner with brands that have, you know, tens of millions of customers, billions of dollars of transaction volume or revenue on their platform or through their stores. And that’s where it becomes really interesting for a brand because you now can get the card in the wallets of hundreds of thousands of customers and influence their behavior. And we are going to be giving the partner a lot of value on a program of that size. So generally, what actually happens with Imprint is we’re not in the market for the smaller partners. And what we really don’t do, and this might be counterintuitive, is we don’t spend any time on outbound business development. Because we found that most brands are big enough to have a really successful program, if they don’t already have one, we are never going to turn up and convince them, “Hey, have you thought about a co-brand card?” And they’re going to go, “Light bulb, how did I not think of that before?” They’ll have thought about it, and for some reason, they won’t be doing it. And so instead for us, and this is very weird for, you know, a business like ours at our stage, is we only focus on inbound through channels that already exist. So Visa or MasterCard might call us and say, “Hey, one of our brands that we’re already a big partner with because we process a lot of their payments is now thinking about a co-brand.” That’s when we’ll spend time with the brand. Similarly, maybe they’ve already hired what’s known as a co-brand RFP consultant. That’s when we spend time with the brands. And really for our business, which is really weird, is we want three or four or five logos a year to build a big business. We don’t actually build a big business on a thousand logos a year.
PR: Interesting. Interesting. You’re going after a large slice of the market transaction-wise, but not a very big market when it comes to the total number of companies. So I want to go back to what you said. The company that’s doing a billion dollars in sales, they’re not a small company. They could be a publicly traded company. They could have some pretty serious brand recognition nationally, and they want to do a co-branded card. Why did you say they shouldn’t do one?
DM: And it depends on the unique dynamics of every company, right? But there are, you know, shapewear companies, there are makeup companies that are doing a billion dollars in sales, right? That have true love, but there are other like, unless they have enough SKUs that customers are going to spend a lot of money there, right? If you’re buying shapewear four times a year, or buying makeup four times a year, you probably don’t have enough affinity or utility for a customer to want to sign up and get the card. If you’re a furniture store that can furnish a whole house, even if you’re early in the journey, then it’s much more likely that a co-brand card will make sense for you because people are probably going to spend $30,000 finishing their home and you’ll probably get 10 of that, 12 of that. That’s when it becomes more accretive to you. And so when I say a billion dollars isn’t big enough, it’s more about the unique dynamics of the brand. More revenue normally indicates that for on an average customer basis, you probably have higher AOVs and more of a reason for the customer to want the card. And so we just don’t want to waste brands’ time where the card won’t have the success it could have, right? If they waited or if we spent time with a different brand that just had more utility to customers.
PR: So you’re still a fairly young company, and how did you get over the chicken and egg problem? Because if you want to go with big brands, $100 billion-plus revenue brands, how do you get in the door? How did you convince someone to take a chance on you?
DM: Yeah. And it’s such a good question. We talk about it all the time here. Two things I often say: one is, imagine me going and pitching a VC and saying, we’re going to do three deals a year, and it’s going to be 24-month sales cycles to large enterprises, and you should fund this company. They’re going to go, you know, no way, buddy. And the other thing we always talk about is the big brands, the buyers have asymmetric downsides. They could buy Imprint and take the risk that we mess it all up, and they might lose their job, or they could go with X big bank, and if they mess it up, everybody at the company is going to go, well, that was always going to happen. Like there is no risk there. And so you go with the bank, you probably don’t lose your job if it goes poorly. If you go with Imprint and it goes poorly, you definitely lose your job. And so we’ve always had to face that uphill battle. And we’ve thought about how to get over this problem in two ways. One is you’ve got to start a little smaller. And so our first ever partner on a credit card was a company called Horizon Hobby. You know, they have a successful program by their scale. And we’ve then been daisy chaining, you know, bigger and bigger companies, one success onto the next and trying to make every partner an advocate. And so we want to be able to walk into a sales process and say, you see all these logos we have, you can call any of them, and they will tell you what a great job we did for them. And there’s a certain point, Peter, where we’re now in the bigger leagues, right? Our partner, H-E-B has billions and billions of dollars of revenue. You know, they’re a big partner. And then the other thing is we always have to turn up and feel like, you know, IBM or McKinsey or Chase, every interaction. And no, if I was in a pitch today and I wasn’t on this fun podcast with you, I’d be probably wearing a shirt and a blazer because you have to show up, right? Every document we send, and every pitch material has to be perfect. You know, we print it, we bind it. You have to make the other person feel like you get how important this is to them. Right? And then they’re the two ways that we’ve you know, slowly gotten over the chicken and the egg problem.
PR: Interesting. That is super interesting. Then, let’s talk about the technology stack. I want to go through, like if you’re dealing with a supermarket chain, they’ve never released a credit card before, most likely, right? So they don’t know the first thing about it. They might have a customer base. They don’t know whether they’re subprime, prime, or super prime. They probably don’t know much about credit risk. So tell me about what it is you’re providing? Is it a full suite of services? Obviously, you’re not a bank. I know you partner with a bank. We’ll get to that in a little bit. What do you provide to them technology-wise?
DM: So, everything is the answer, right? Because, and that’s a really bad answer, but I promise to break it down. But if you’re a grocery store, you’re in the business of selling avocados, your own brand products, the last thing you want to have to do is figure out what the Durbin Amendment is and does it even apply? And by the way, it doesn’t. It’s a debit thing, and even just trying to figure that out is really difficult, right? And so our job is to turn up and say, we can make this straightforward for you, and we will help you build a compelling product, which is what did the card do? We’re going to help you build and integrate into a digital experience, and we can give it to you out of the box, or we can integrate into what you have. We’re going to take on the credit risk. We’re going to take on the compliance risk and make sure this is the program that, as it scales, proves cardholders correctly, treats them well, obeys all the rules, doesn’t create brand risk for you, and answers the phone when they have a problem. That is everything that we’re going to provide. And then we also have to provide you with economics and the deal, because ultimately what happens is the partner funds the rewards, but we give the partner revenue share on every swipe to fund the rewards. And so that’s what we provide. Really, the conversation with partners who’ve decided to do a co-brand card has evolved over the four years that we’ve been building the program. Four years ago, partners were saying, can you give us it out of the box? Can they live on the Imprint app? You know, can we just put a banner at checkout, be that digital or physical, and people can sign up where if they scan a banner, if they scan a QR code in the physical store, it’ll go to your app, and they sign up and get the card on your app. And that’s where we started with partners. More and more partners are saying, “I own my digital experience. I have built an app for my customers. I want the credit card experience integrated into the app. It should feel like CashApp. It should feel like the Apple card. I want my logo on it, but it needs to work that well.” And so that’s what we’re now providing more and more for partners is we will embed into your experience. And so when you open your app, you can see the card, you can see your rewards, you can take actions. And the great thing about a credit card is it forces you to engage on a weekly or monthly basis. And it’s another reason for you to open the app. It’s another reason to see what rewards you have. It’s another reason to engage with the brand, right? And that’s the best version of the co-branded credit card, right? Where it’s an extension and a value add to the brand, where it lived in an Imprint experience, it’s just not as effective, right? And so more and more partners, that’s what we’re providing, right? It’s a holistically integrated experience. You’ve been doing fintech for a while. When I started Imprint, there was a big wave of embedded fintech and the wave never really materialized. But in co-brand, it was the first embedded fintech. You had a brand offering a product that was in financial services. This is the place we’re seeing the most innovation now of truly embedded fintech.
PR: Yeah, that makes sense. You have a bank partner, and maybe you can tell us why you chose that particular bank partner. And I presume that you didn’t just choose the first company that came to mind. So tell us about that process, because this is a really important piece, particularly these days in fintech. So tell us about that process.
DM: I think the first thing that we got lucky about and so much of, I think, building a company is being lucky or fortunate as well as being good or working hard. The first thing we were lucky about was that we were so cocky coming out of the gate. And the reason I say that is because, you know, we always had aspirations to build a big company that would work with big brands. And therefore we knew we had to take compliance as a risk, regulatory as a risk off the table, or take it off the table as best we could. And so when we were choosing a partner bank, you know, a couple of things we were looking for were, is this a bank that has other big fintech partners? And so that we can walk into the room when we’re in a sales cycle and say, they have Square, they have Stripe, they have SoFi as partners, right? As an indicia that they’re the real deal. The other thing was, how aggressive was the partner with us on our compliance, both policies and procedures, how was it set up in the company, who had we hired? And then the last aspect was price. And I think that was really helpful to us because we looked at six or seven different banks, and this was back in 2020 when there was much lower regulation, much lower scrutiny. And we ended up going with our partner bank, First Electronic Bank, because they put so much pressure on us out of the gate. And so they’re not the cheapest by any sense of the imagination, both in terms of what they charge us or what they cost us to run our own compliance program. But I think that’s been a really good thing. We never had any trouble, even though there’s been a lot of trouble with some partner banks. We, you know, we go under review three or four times a year as they get examined. You know, the exams, we passed them mostly with A plus because we’ve already been forced to live to the standard of a bank because we chose the right partner bank. And so, you know, if I could go back and give myself advice, it would be to make sure the partner bank is a stickler. We now actually set up a second partner bank that we’ll be announcing very soon. And it’s been incredibly straightforward because the hurdle we’ve already jumped means that other banks say, yes, like everything you’re doing is really good. We’ll happily partner with you as well.
PR: Yeah, First Electronic Bank is up there. They are dealing with some of the bigger brands in the fintech space.
DM: That’s right.
PR: So that’s interesting because I mean, I’ve talked to a lot of fintech founders over the years, and certainly, you know, off the record, founders would say, “Man, I want to go to a bank, which is not just going to just be a total pain in the ass. I want to go to a bank that’s going to work with us.” That has changed obviously in the last year. Now, you know, if you’re a bank isn’t giving you a hard time, they’re probably not one you want to go partner with. And I think most banks now have a much different approach anyway. In 2020, fintech founders were trying to go with banks that were easy to work with. You decided to go the other way, which I mean, that’s, in hindsight, a very smart move. But at the time, it must’ve been tempting to make it less onerous for a startup like yourself.
DM: Yeah, especially because we would meet with banks, and they would basically say, okay, you have to have these policies, but we’ve got a consultant who will take the policies off the shelf, cross out the name of the other fintech, put your name on it and you’re good. And so, you know, especially when you’re trying to build a startup, you’re just so aggressively trying to get to market, like get the first customers, prove that the thing works, raise your next round of financing. You know, I think we’re just, as I said at the start like, we’re fortunate that we were so cocky. Imagine saying that. Because we knew that we wanted to go after the big guys, and we’re trying as best we could to take this risk off the table.
PR: Right. And then how long did it take you to have your systems up and running from the time you hired your first engineer to, it doesn’t sound like you’re an engineer. So, you didn’t create the code yourself. How long did it take to kind of get to speed, where you could go out and land a first customer?
DM: It took us about 18 months before we ran our first test card on our platform. And then, before we brought the first consumer onto the platform, was six months later, because again, building your own credit card platform is foolhardy, and you have to be very careful. As soon as you bring a customer on, that’s when you’re starting to take all the compliance and regulatory risks. And so it was truly 24 months from when we first wrote a line of code to when we first generated a dollar of revenue on the platform. And I, we’re fortunate because, you know, it’s really hard for a big bank to dream up building their own platform. Because if you have, you know, a hundred million cardholders and you’re going to transition to a new platform, everything has to be fully featured, and it has to work because you’re going to create a lot of compliance risk for yourself. With us, when we first came to market and had our first card holder, we didn’t have authorized users. So you couldn’t give your spouse a card. There were lots of features that we kept in a box and then slowly released over 12 months so that we could know it was working and scaling. And the great thing is, today we have all the features and more that a bank would have, but tested and iterated out over four years, over five years.
PR: Gotcha. So what does the credit card say? Is your name on there at all? First Electronic Bank’s name has to be on there, I presume.
DM: Yeah.
PR: Does the consumer know about Imprint or not?
DM: They do know about Imprint. And so I know not everybody will be watching this, but you can see, this is our H-E-B partner, it says H-E-B in the front. And on the back, we have the Imprint logo. And we also have the partner bank logo. It depends on the relationship with the brand as to how much the consumer or cardholder knows about Imprint. And so for some partners, the cardholder signs up, and then they download the Imprint app or go to Imprint.co online, and they service their account that way, which is kind of like Delta and Amex, right? Like you sign up for the Delta card at Delta, but you end up with the Amex app on your phone. There are other partners, and this will happen more and more actually over this year, where most of that experience is in the partner app. And so yes, they’ll have a relationship with Imprint, but our business model isn’t predicated on, you know, stealing your customers if you’re a brand. We’re not interested in people downloading the Imprint app or fundraising based on all the people who are interacting with the Imprint app. Much more it’s better if it’s integrated into the partner’s experience. And our goal is to make it so that the customer doesn’t have to think about Imprint. They should think, this is an amazing experience. I get it from a brand I trust. The rewards work really well. When I make a payment or when I check how much I owe, it’s clear and transparent, and I never get taken advantage of. If all that’s true, then our cards become top of wallet. And we’ve seen that time and again now. If we don’t make those things true, you’re playing a loser game and it’s a zero-sum game where you’re ultimately taking advantage of the customer, and that’s not a way to build a big business.
PR: Right. So then does the 800 number that’s on the back of the credit card ring into Imprint?
DM: It does.
PR: Okay. So you’ve got a team of customer service reps that are, you know, is it 24/7? What does that look like?
DM: In Spanish and 24/7. So we built it all ourselves because it’s one of the key things for us when we pitch a partner is it’s great to be able to tell the partner. Everybody who answers the phone is an Imprint employee who has Imprint equity, and they are super engaged with doing a great job for your brand. And that’s a huge value proposition because if your logo is on the card and you have a problem, you’re going to blame the brand. You don’t care that it’s Imprint. Our job is to be a custodian of your brand and make sure that we treat your customers as well as you would. And so that’s actually been a huge competitive advantage to us. It’s a little more costly in the long run, but we think the pie will be bigger and therefore it’s worth the extra cost for us to really invest in it.
DM: Right, right. Okay. So I was reading something about you guys fairly recently that was talking about how you guys have scaled dramatically, but your headcount is scaling far, far slower than your revenue. I imagine, I mean, you’ve had to scale headcount to staff English and Spanish 24/7 call centers, but how are you able to scale so fast? What technology are you using to try and to be able to scale much, much faster revenue-wise than headcount?
DM: And one nuance here is we’ve seen huge scale in our customer support. When we talk about headcount, we differentiate between customer support and the people at Imprint, right? Cause you do have a much more linear increase in customer support as you add more cardholders. But what you see with a lot of fintechs is they end up bloating all the other functions. So you end up with, you know, first-line monitoring being 50 people. And it’s really important that we do monitoring and testing from a compliance basis to make sure that we are, you know, executing what we said we would, delivering on our promises. But there are ways to do that with technology and not with humans. And a really good example is we listen, we used to sample the calls, right? So someone would call the call center, and we would listen to a random subset of calls, five, six, seven percent of calls, to make sure that the quality is good, right? We are delivering on a great customer experience. We’re solving the problem quickly or getting the customer off the phone in a happy mood, but everything we’re seeing is also compliant and accurate. As we scale, we would have to scale headcount linearly there, or almost linearly, with more people listening to more calls. Instead, what we built is we have our own AI model that listens to every call, and it’s listening for tone of voice, it’s listening for accuracy in what we said, it’s read all the regulations that we’ve provided. At the start, we had humans listening to the calls as well, to correct the model where it was wrong. Today, only bad calls end up with the humans, and we end up then going back and retraining the customer support agents based on that. And so that’s one example where you could have hired 50 people to do this. We now have not had to hire any more people. In fact, we’re leveraging modern technology to get rid of the people in the loop. You know, collections is one. Unfortunately, when you lend money, there is a point where some people who have the ability to pay don’t pay, and you have to make a call and say, “Hey, you actually owe this money, you know?” And you should do it in a humane way. If somebody only owes $2.50, you should probably just write it off rather than, you know, wasting their time, hurting your brand, hurting the partner’s brand. But how you do that and how you select those customers, we now do it based on a machine learning model that says, where should we intervene here and where should we not? What we’ve seen is much higher ROI, much higher customer satisfaction, and much fewer complaints because we’re letting the machines help us decide. And so there’s a hundred examples of that across our company. Dispute resolution: somebody disputes a payment on the card. How do you investigate the case? How do you submit the case to the network? How do you adjudicate the dispute? We are now using AI to do the vast majority of that. There are still humans checking it to make sure it’s accurate, but we’re not bloating with 40 people sitting in an operation center somewhere in middle America, we are actually able to use machines to do that. And then humans get to do more fulfilling work, right? They’re happier on average because they’re doing the more fulfilling things.
PR: Interesting. Okay, so last question then. What’s next for you guys? I mean, you’ve got a market that’s fairly large. Are you just trying to scale what you already have? Are you looking to add new products? What are you focused on?
DM: So we have made a lot of commitments to our partners, and those commitments last seven to 10 years in our contracts. And so the number one goal for us is to deliver to partners and to their cardholders. So, continuing to scale that and deliver that really well is goal number one at Imprint. This year we will have a new financial product. So a lot of people, when they shop at a store the first time or the second time, they don’t actually want a credit card because they’re not sure if they’re going to have the relationship. They’re not sure about the utility. But a lot of times, they still want access to a credit product. And that’s why BNPL has exploded, right? Klarna, Affirm. The problem for a lot of partners is they end up spending a lot of money on Klarna and Affirm, and Klarna and Affirm end up with the customer. And so it’s a bad transaction for the partner. Where we have credit cards with partners, we will be launching buy now pay later, too. And so you turn up to buy a couch, you don’t want the credit card because you’re not sure if you’re going to come back. We’ll give you the buy now pay later loan. And if you come back in a week with your spouse and you’ve decided, actually we’re going to furnish the whole home, and we’re going to predominantly furnish it from this store, you’ll able to press a button in the app, roll over the loan into a credit card and instantly start using a digital credit card and we’ll ship you a credit card in a day and a half. That’s been promised by banks for a long time and never delivered, but these things work perfectly together because it lets customers almost try the credit card and the financial experience before they buy on the BNPL, and it creates a bigger pie for everybody involved. And it’s less expense for the partner; they benefit from the lifetime value of the credit card. And so we’ll be the first of anybody in market with that product in September.
PR: Interesting. Well, Daragh, it’s been a pleasure learning more about Imprint. What an interesting story you have, and it sounds like you’re off to the races with a great fintech company. So, thanks so much for coming on the show today.
DM: Thanks so much, Peter. I appreciate it.
PR: As you can now see, it hasn’t been an easy road creating an alternative to Chase and American Express in the credit card reward space. But it goes to show that wherever there are incumbents using legacy technology, enterprising fintech entrepreneurs will be attacking that space while creating new functionality that just wasn’t possible before. And the co-branded credit card space is hugely popular, with a great deal of pent-up demand from large brands. Ultimately, it is the consumer or small business owner who wins here with better products and a solid reason to remain loyal to a particular brand.
Anyway, that’s it for today’s show. If you enjoy these episodes, please go ahead and subscribe, tell a friend, or leave a review. And thank you so much for listening.