The Barclays Arrival Premier World Elite Mastercard just launched in April. It put Barclays into the transferable miles game alongside American Express, Chase, and Citibank. Update: it has now been withdrawn.

The play with this card was the unique earning structure — a bonus for spending on the card each year instead of an initial signup bonus.

How the card earned:

• 2 miles per dollar on all spend

• In addition every year you earn additional miles for hitting spending thresholds. Spend exactly $25,000 on the card in a year and you’ll earn 75,000 miles or 3 miles per dollar.
  
  • $15,000 spend earns 15,000 bonus miles
    
  • $25,000 (i.e. an additional $10,000 spend) spend earns an additional 10,000 bonus miles

The idea of no initial bonus didn’t resonate and Barclays didn’t get a lot of applications. Rachana Bhatt from Barclays tells me that “during the test phase we didn’t see great demand for the product.” And so they’re pulling the Arrival Premier from the market “at the end of the week” although it’s no clear when exactly that would be.

Existing cardmembers can continue to use the card. Ms. Bhatt assures that there are “no plans at this point to make any changes to the card.” They are going to continue to manage the portfolio, customers will continue to be awarded threshold bonuses for their spend, and they’ll continue to offer points-to-miles transfers.

Over time I have to think that could change, if only because they won’t be doing the volume of airline transfers they had anticipated and that could affect the cost of those transfers. Keeping this separate portfolio of cards has costs. So will it remain as-is a few years from now? Perhaps not, but they don’t have plans to alter the product or product change customers.

Anyone who has it is in some ways lucky. I do like the card for exactly $25,000 of spend which earns 75,000 points each year. And no one else will be able to get the card in the future.

We talked about taking the learning and capabilities from the product and looking to use it elsewhere. They built a capability to do airline mileage transfers, which is both airline relationships and contracts and technical. So I hope they’ll look at how to deploy that with other products. Ms. Bhatt offered, “Since we’ve built it, have experience with, can now think about where to take that next.”

Over the summer I spoke to Mastercard’s internal partner conference, a gathering of executives of the companies which offer Mastercard co-brand cards. One of the things that was a hot topic of discussion was what would happen with Arrival Premier. It’s one of the very few times that a card issuer’s competitors were hoping they’d succeed with a product because everyone is looking for an alternative to big up front bonuses. They’re expensive to offer, and banks wind up spending a lot of money both to acquire good long-term customers and not so good short-term customers. The hope was that they could offer value with customers doing the spending first, targeting their investment only in cardmembers who were using the product in a serious way.

Initial bonuses, though, serve two important functions:

1. To get consumers to prioritize the card. Everyone is busy with a long list of things to do. How do you move applying for a credit card to a top 5 position on someone’s to do list? Even if a card is good, applying may not be urgent.

2. Prove value. Consumers are skeptical that they’ll see value out of marketing promises. Big rewards are far off in the future, and require a lot of commitment to achieve. How do you bridge that trust gap which is necessary to convince consumers to make a long-term commitment to a product? Some loyalty programs prioritize offering low value rewards to consumers can redeem quickly — but then they’re getting low value out of the relationship. A big initial card bonus shows a customer big value up front, to get them on board with the card’s value proposition.

Thirty years ago American and Continental co-brand cards offered 5000 mile bonuses while United’s offered a $25 discount certificate. Back then though the very idea of earning airline miles for spending was new. Since then the market has become crowded with products and there’s been a big race for consumers and ever escalating war for their attention. There’s also a war to steal each other’s customers so the faster things escalate the less time a bank can expect to keep a customer (in general) and the harder it is to earn back that bonus.

Barclays hasn’t yet figured out the solution here, but they deserve some credit both for trying and for acknowledging quickly what didn’t work. Great entrepreneurship doesn’t eschew failure. It encourages failing quickly, learning, and iterating.