Westwood-based fintech company Sunbit has entered the payment card industry by introducing its own fee-free credit card, which primarily competes with companies such as Klarna, Affirm and Sezle. We are advancing.
In addition to standard credit card functionality, the Sunbit card offers authorized users individual APRs, allowing individual transactions to be paid in full or in 3, 6, or 12 month payment plans. There are no annual fees, application fees, late fees, or penalties. There are also no fees for adding or removing transactions from your payment plan at any time. Cards are managed through the company’s MySunbit app.
“I think what we are trying to achieve is to have the best of all these different[payment solutions]in one card with no fees and a mobile app that does all the heavy lifting. ,” said Bill Walsh, a major Sunbit customer. Officer said. This card is issued by TAB Bank, based in Utah, under license from VISA.
So far, the Sunbit card has recorded over 65,000 early access cardholders, with another 400,000 consumers on the invite list.
Expansion
Sunbit also has POS financing options available at nearly 14,000 locations nationwide. This includes companies such as auto dealer service centers, eye clinics, dental offices, veterinary clinics, and specialty medical services.
But according to Chief Executive Arad Levertov, who said Sunbit’s goal is to expand card adoption, there’s a lot of room for the company to cover. The U.S. business market consisted of about 29 million small businesses in 2020, according to a report from financial analytics website pymnts.com.
Dave Maddox, payments industry consultant at independent payments consultancy Thinkpayments and former business development leader at IBM, said: “They are definitely targeting the underserved subprime market.”
Maddox said Buy-Now-Pay-Later (BNPL) services and businesses have grown significantly during the pandemic, when subprime category card users most likely lost their jobs and were unable to qualify for credit cards. Added that it gained traction. Since then, BNPL’s trading volume has declined, with companies such as Affirm losing more than 75% of its value as of February this year. Affirm’s stock is currently trading at about $35, a far cry from late last year when it was trading at over $160 per share.
“[Sunbit’s]targeting method, at least to me, in that it’s focused on individual segments where subprime consumers are in trouble and need to fund something. Sounds good.” This is where consumers can run into unexpected financial troubles, and Sunbit’s products can help.
fill the gap
According to Walsh, the Sunbit card took more than two years to develop. The company has spent considerable time researching what gaps the card could fill in personal finance, he said.
One problem Sunbit found in its research was that more than half of the surveyed customers used multiple checking accounts to process various purchases.
“When we started seeing these common themes about the personal finance lifehacks that our customers are doing to make it all work, we hit the road and started to feel like we had reached something.” says Walsh.
However, Walsh added that Sunbit faces significant challenges as it expands its card user base. It’s about rethinking how cards work in an industry with card-based legacy technology that consumers are accustomed to.
“They need to get consumer demand, educate consumers, and make sure people are comfortable with the application,” Maddox says. “And they’re competing with PayPal. They’re competing with some[companies]that are known by their real names, like Klarna.”
According to Maddox, convincing consumers is just one piece of a larger puzzle. Merchants are likely to stick to one financial solution instead of juggling multiple platforms from different companies, he said, making it harder to push products to merchants better than their competitors.
According to Maddox, the way Sunbit structures its merchant agreement is an extensive and detailed document that will determine how successful the company will be in persuading merchants to adopt its services. will be
Maddox said that if he were to invest in the company, he would want to better understand Sunbit’s projected credit losses, current credit losses, and plans to involve more merchants. “They are targeting the subprime market with their credit cards, which makes it even harder to understand what[their]potential loan losses will be,” Maddox said. increase.
Levertov says the advantage Sunbit has is that it has collected a lot of data over the past six years in business. “There are always challenges when giving credit, but we are confident in our ability to measure and overcome them because that is what we have been doing over the years.
