Railsbank: Why the Appetite for Crypto Reward Credit Cards is Growing

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Louisa Murray, COO, UK and Europe at Railsbank shares her thoughts on why the appetite for crypto reward credit cards is growing. 

Louisa Murray, COO, UK and Europe at Railsbank Louisa Murray, COO, UK and Europe at Railsbank 
Louisa Murray, COO, UK and Europe at Railsbank 

Cryptocurrency went mainstream in 2021. With that rise, we’re seeing financial and technology brands leveraging this trend to create new services for consumers. One big example we’re witnessing is the emergence of crypto reward credit cards. Rather than having a credit card that gives you travel rewards like an Amex, or regular cashback, crypto credit cards reward users by investing cashback returns into digital assets. 

Their popularity is unsurprising when you consider that loyalty rewards have been in desperate need of a makeover for some time now. In fact, we recently discovered that only 35% of British consumers are satisfied with the loyalty rewards they get from banks. And not to mention that the appeal of travel rewards have understandably stagnated at a time when travel has been restricted in the pandemic.

Against this backdrop, crypto credit cards are set to only grow in popularity. 

Crypto and the rise of the alternative loyalty reward

The rise of crypto rewards is part of a much bigger drive among consumers to seek out more meaningful rewards that align with their interests. In a similar fashion, we’re seeing an increasing desire among consumers, particularly younger generations, in credit cards that invest cash back into charities or environmental projects. It’s clear that younger consumers want a new type of loyalty experience; one which shows that they are understood. 

Our own research has found that 59% of British consumers like getting something back in return for their loyalty and 49% see a benefit in rewards helping their money go further. 

That last point nods to another big trend we’re witnessing among younger consumers: the desire to make money fast. It’s no surprise that investing in crypto is seen as more appealing than investing your cash in an ISA with near-zero interest rates.

There’s of course a vast number of young people who have not yet taken the plunge to invest in crypto, but who would be more than happy to earn loyalty in crypto and watch that cashback grow over time. Crypto credit cards offer consumers an opportunity to access these fast-growing assets in a low-risk way, and get them excited in a way that run-of-the-mill cashback can’t.

The brands leading the way

Traditional credit card providers are leveraging the crypto trend to provide more appealing incentives to customers. Last year Mastercard announced it is preparing to support different digital assets to give their customers more choice. However, it’s not only the incumbents that are getting in on the game. 

Last year, social budgeting app Status Money launched its own credit card that invests 2% unlimited cashback rewards into crypto by default. Members get the investment returns without having to deal with the headaches and tax burden of actually owning crypto. 

Traditionally a platform that gave members insight into their finances and access to advice, the segue into delivering financial products that build wealth was a natural move for the brand. It marks another big shift we’re seeing in the market, that it’s not just traditional financial brands that can offer financial products like credit cards. We’re going to see more and more non-financial brands looking to reimagine the credit card and loyalty reward experience in an effort to increase engagement with customers. Embedded finance plays a key role here. 

Creating loyalty with embedded finance experiences

Thanks to embedded finance, any brand can launch their own branded credit card. But until now, many of the cards developed fail to offer anything that differs from an average credit card. However, we’re now seeing a shift from brands simply launching a credit card just because, to offering a compelling and relevant credit card reward experience that is going to get customers excited. I call this the rise of embedded finance experiences. 

Forward-thinking brands like Status Money want to increase regular engagement with their customers to forge more meaningful relationships, and a relevant and innovative reward programme can ensure just that. 

We’re only scratching the surface of what is possible. Lots of brands should think about how embedded finance experiences can support loyalty and give customers better experiences. We know that consumers, especially younger generations, want more. More from their money, more of what they like and more from the brands they love. We also know that they’re more open to accessing these financial experiences from non-traditional brands. 

For as long as crypto is hot, the appetite for credit cards with crypto rewards is only going to grow stronger among consumers. The opportunity is ripe for brands to create compelling experiences that consumers really want and drive that all-important loyalty.

  • Polly is a journalist, content creator and general opinion holder from North Wales. She has written for a number of publications, usually hovering around the topics of fintech, tech, lifestyle and body positivity.

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