Rove plans to be both a new credit card with transferable points, and a transfer currency itself that partners with several banks. The Y Combinator company outlines their card’s value proposition:
- No annual fee
- 2x on everything
- 3x on travel
- 4x for 30 days for referrals. Referral bonus spend is capped @ $2,500 per month per referral (each additional referral adds an additional month of 4x capped at $2,500 spend)
- extended warranty, trip cancellation and delay coverage
If you join the waitlist you can begin referring customers now, and the first approved customers are reported to get some additional benefits once the card application and product go live.
They tell me they have 13 transfer partners so far including a hotel chain. They mention Air France KLM, Aeromexico, and Accor but the rest remain under wraps until each one has signed off on use of their name.
Rewards value proposition aside, they’re attacking two basic problems:
- getting younger people without significant credit history into rewards credit cards
- making travel rewards accessible to mass consumers, given how complex using miles can be
How well they do this remains to be seen! And whether they can make money with a Capital One-style 2x value proposition plus enhanced earning beyond it, without Capital One’s scale, and skewed heavily towards travel redemptions without a preponderance of lower-cost redemption options remains so be seen!
Aim To Approve More Young Customers
They do the first using cashflow underwriting (connect your bank account, see actual spend pattern) in addition to FICO scores with the goal of reaching more young people with thin credit files. The most robust your credit history, the more they say they’ll rely on FICO. (For many fintechs, relying on underwriting without reference to credit score hasn’t been proven out yet in a downturn.)
Goal Of Seamless Redemption Of Points For Award Flights
While Rove says they have points transfers they see their killer app as the ability to search and book awards with their partners seamlessly.
- search for award space
- one click sign up for the transfer partner’s program within the app
- redeem your Rove miles instantly for travel (with instantaneous points transfer on the back end)
This apparently rolls out in stages with various partners. It’s not clear how much AI is involved in the process, but their investor pitch emphasizes that aspect of booking travel.
Pool Points From Cards Across Multiple Banks
They say they have a card issuer, and that they are going to be a transfer partner of several banks – their currency as a transfer partner is expected to come out before year-end, while their card they say should come out in winter 2025.
As a card this is interesting, especially the referral earn as well as 2x on unbonused spend transferable to at least 13 currencies. $2,500 per month for twelve months at 4x means 120,000 points.
As a rewards currency this is interesting. Depending on transfer ratios from different banks, it becomes possible not just to optimize the high-earning cards across categories from a single bank (think Sapphire Reserve plus Freedom Unlimited, or Strata Premier plus Double Cash) but across different banks that may not today have points that transfer to miles.
Could They Finally Solve Making Award Redemption Easy And Accessible?
The real potential as a business is that Rove has visions of cracking the complexity challenge in booking award travel. Point.me does a great job with tutorials walking members visually through the steps of signing up for a program, transferring points, and booking an award through an airline website. They claim to be able to automate all of that so it’s accessible to anyone without having to pay attention.
The snag, though, seems like the underlying airline technology. This relies on airline APIs for account signups, and instant points transfer (even transfers between Chase and United sometimes hit snags!) plus airline systems for showing availability can be unreliable. How will they handle false positives in availability where awards show up as available but ticket issuance fails?
That’s why I can’t wait to actually see and test this – since the concept sounds great but execution is really, really hard.
Could be interesting, but I’ll wait until we know the carc issuer and the rest of the transfer partners before I get too excited.
Where is the waitlist? Your link brings the page back to this page.
I’ll stop right there. Silicon Valley startups are notorious for saying they have anything just to get their foot in the door, such as a post on this blog.
@KimmieA – link fixed, sorry!
For anyone following Bilt, I think this pitch is going to evolve quickly. Bilt has integrated systems to make award travel more seamless (Expedia Portal, Point.me, Awayz), but they have also stopped emphasizing travel redemptions (they used to put out 2 videos a month on YouTube with Richard Kerr trying to educate the audience to use Bilt points for travel). Why? They need a redemption mix to make the economics work. They need some people to redeem for random household goods, some people to use Amazon, and smaller group that is sending the points to Hyatt and United. They added Hilton and Marriott lately — bad value redemptions, but recognizable programs for people. That also are doing more experience based redemptions (like monthly dining or the Portnoy pizza party) because people like that and it is probably much cheaper than buying Hyatt points.
In essence, you have to create paths for people to get big rewards value, but you also have to put a lot of options in there for people to take easy, sub-optimal redemptions in order to make money. In the name of choice, you have to make the value more obscure. The idea of a company making reward travel seamless is a disaster. If it works, that means there’s going to be much less inventory out there for the folks really pounding the pavement looking for awesome redemptions. Airline programs will adjust and reduce redemption value even more. If it doesn’t work, you will have a lot of disenchanted young people trapped in this weird rewards system and burned by the experience.
As for the underwriting standards stuff: I think C1 is the one that figured this out more than most with thin files, but they know there’s a lot of risk. The only way this works is grabbing a small subsection of young, soon-to-be-affluent professionals. It is a niche market, with Bilt already in the lead.
But I’m also interested in a 2x card with no annual fee. So we will see.
The 2-4x is certainly interesting, but I saw zero mention of 1:1 transfer redemptions with any partners, let alone most of them. Will be interested to see if they can do that, but with 2-3x (ignoring referrals) earning on no annual fee, I have a feeling it will be a lot of 3:2 and 2:1 transfer ratios where other banks would offer 1:1.
A 100,000 point intro bonus would get my attention
My sentiment is simlar to Brent’s. Travel redemption shouldn’t be an exclusive party, but the easier it becomes to redeem points, the higher redemption prices will go. This is a classic increase in money supply + increase in demand-> price inflation scenario.