Hey everyone, Ian here.
Feel like this week flew by! We had a FTT Slack Happy Hour last night, which was lit—we had like 20 people. It wasn’t as lit as FTT happy hours IRL, but it’ll suffice.
We’re running a user survey for FTT subscribers over the next few weeks—if you fill out our survey, you’ll be automatically entered for a raffle to win a $50 Amazon Gift Card. We’re giving away two (no, you can’t win twice) so fill it out ASAP!
We’re raising the prices for FTT+ on June 1. If you sign up over the next month, you’ll get locked in to the $25/month rate for the first year. You also get a 15% discount if you sign up for the annual membership.
Honestly there wasn’t anything that interesting this week. So we’re going to be focusing on some ~original content~ today:
Unpacking Samsung And SoFi’s Stealthy Partnership
Not really sure what this is yet, but it’s something—SoFi and Samsung are partnering up for a “debit card with a cash management product,” according to Samsung Pay’s press release yesterday.
The release was long and light on details. Through the grapevine, I’ve heard that a lot of banks and fintech startups were pitching Samsung for this partnership, so good on SoFi for closing this. One guess is that SoFi might be whitelabeling it’s SoFi Money product—which is a sort of combination between a checking and a savings product. You can read a Business Insider review of the product here.
But for today, wanted to focus more on Samsung. Honestly, I haven’t heard much from Samsung Pay since it launched, and that’s because its extremely difficult to get traction for a manufacturer without owning the operating system. Samsung is built on top of Google’s Android OS, so Samsung users end up having Samsung Pay *and* Google Pay on their devices. Samsung Pay’s biggest value add for users was that it worked on terminals that didn’t have NFC—leveraging technology the company picked up from its 2015 acquisition of LoopPay. But over the past 5 years, NFC terminals have become more widely adopted—even in places like the NYC subway system. What’s the point of using Samsung Pay over Google Pay now?
A lot of people will view this as Samsung playing catch up to Apple. I don’t really see it like that—this was more of a natural extension of Samsung’s existing product. The value prop for Samsung Pay has essentially been eliminated. Now, Samsung Pay can own the underlying financial instrument and market it to their distribution base. And by combining a debit card with a cash management product, Samsung can distinguish the product a bit more from Google Pay by offering a competitive interest rate on funds too—something that in a down economy, might be a really strong selling point (yes, rates are low, but anything is better than 0. And companies like Wealthfront still have APY’s at around .35%, which is significantly higher than traditional institutions.)
So before everyone starts saying how Samsung Pay is making a competitor to Apple Card or Google’s unreleased debit card, its important to remember why non-fintech companies are interested in making financial products in the first place: a) to become more ingrained in their users lives b) increase revenue by collecting interchange revenue and c) start developing a stronger financial relationship w customers to eventually upsell them on other financial product. By partnering with SoFi, Samsung can create and own the debit card, and the underlying economics, while automatically adding the card to a user’s mobile wallet, while leaving the app and product development to SoFi. Seems like a win-win-win.
Q&A of the Week—TrueAccord’s CEO Ohad Samet
TrueAccord is in a traditionally unsexy business—debt collection. But recently—post COVID—they launched a consumer product to help people in debt pay that back in an efficient and humane way. We chatted with Ohad about the product release and why they started a consumer product now.
1. Why did TrueAccord feel the need to roll out a consumer product now?
TrueAccord was founded with a mission to make the debt collection experience radically better for consumers. The long-term was always focused on consumers but building a better collection experience ourselves was the way we got started down that path, because you can’t build a better experience without getting the creditors on board. We decided to roll out the consumer product now for two reasons. One, we’ve reached critical mass with the collections business reaching over 11 million individuals. Two, we repeatedly hear feedback from consumers that they really appreciated their TrueAccord experience and wished that we could handle all of their debts.
Debt collection is a fragmented market and most consumers have more than one debt, so Engage is the right next step in our mission to improve the debt collection experience for the more than 80 million Americans in debt. Offering Engage isn’t only good for consumers - it’s actually great for collectors and creditors who get a digital, scalable, and compliant way to receive payment offers from consumers, who end up paying more of their debts this way.
2. How did you get it done from a product perspective? It seems like a big initiative in a short amount of time.
Engage is like a startup within a startup that is rapidly testing and iterating on the product to improve the customer experience. We were able to repurpose technology infrastructure that was already built for the existing business. We’re also operating with a team that has domain expertise. We know collections, and we can help consumers with that knowledge and expertise because we also know what’s going to get collectors and creditors to engage with them, while keeping all communications, from both consumers and our partners, friendly and effective. Finally, we are able to leverage built up trust in the TrueAccord brand, from both consumers who’d use Engage and collectors who knew we were thought leaders on digital platforms. All of these factors enabled us to build the right product and get traction faster than we otherwise would have.
3. How has COVID affected debt collection from your perspective? Do you have any data to share?
We actually have done a few write ups on this. There is a brief with some data here and we did a blog post on consumer repayment trends during COVID. In addition, from an operational perspective, we have seen many traditional players in the collection business struggle to keep up business as usual in the current environment and some have completely shut down, because managing a large WFH call center is an impossible challenge. As a digital-first team, we rapidly adjusted to WFH and have been able to handle demand from consumers to repay debts. As the coming recession is placing more pressure on lenders’ balance sheets, we’re getting a lot more requests for help in the collections process.
4. Where do you see the future of TrueAccord going, post COVID? Are you planning a more consumer focused presence?
We are building TrueAccord to drive a drastic change in how debt is collected by introducing great UX and treating everyone the way they want to be treated. We started from offering a collection service with high NPS - previously unheard of - and we’re offering more tools to help consumers solve their broader debt issues. None of that is possible without bringing collectors and creditors to the table. Our North Star metric is how many consumers, out of the 77 million that the CFPB says are impacted by debt collection each year, do we “touch” every year. We do this through early stage “back on track” programs, through late stage, personalized payment options, and through direct to consumer solutions.
Stat of the Week
Got this from Andreessen Horowitz’s Rex Salisbury: PayPal announced in it’s Q2 earnings that it added 7.4 million net new active accounts in April 2020. Considering they set a Q1 record with 10 million net new active, it seems like PayPal is well on it’s way for a record quarter in account growth in Q2
Tweets of the Week
Lenny’s newsletter is a must read if you’re in product—I’m a big fan. He published a deck on how to build a marketplace recently which is worth your time.
I’ve been getting more *into* productivity—I’ve always spent a lot of time reading about it, but I think now I’m starting to implement more of the stuff I read about. Amanda’s thread her is filled with interesting tidbits and advice on being more productive with less time. The tweet on context switching and preventing and defending against that was important for me.
Nik’s a good friend of mine and also a genius growth person for DTC companies. If you’re a consumer fintech company looking for tips on growth, highly recommend following Nik. Thought this Instagram hack idea was really good (also why are all fintech companies so awful at Insta? And please don’t email me saying you’re an exception, I follow most fintech brands on IG and they’re terrible.)
Derek’s tweet pretty much says it all—e-comm has grown basically a percent a year, and grew 15% over the past month. Changes are happening at such a rapid pace now…it’ll be interesting to see where we end up.
Web Smith @webWow: eCommerce is now at 30% of all retail. Fall will see higher numbers, potentially reaching China's 37%. Why this should concern you: United States: 23.5 SQ. FT / capita China: 2.8 SQ FT / capita We are a landscape of suburban strip malls that won't be needed. Source: BAC https://t.co/VnwpeI8D7q
Funding of the Week
Treasury Prime raised a $9m Series A from QED (from by Amias Gerety), SaaStr (from by Jason Lemkin), and Nyca Partners (from Hans Morris.) Treasury Prime is an API company focused on helping banks on modernizing their legacy tech stack.
Stilt raised a $7.5m Series A from “Liron Petrushka; Hillsven Capital; Streamlined Ventures; Gokul Rajaram; Bragiel Brothers; Fundbox CEO Eyal Shinar; Next Insurance CEO Guy Goldstein; Charles Choi of SK Networks; and Y Combinator partners Dalton Caldwell and Kevin Hale,” according to TechCrunch.