The following is an excerpt from today’s Global Newsletter.
It’s no secret that many traditional banks have relied on credit card late fees to bolster their bottom lines. It’s easy cash for them, but it’s an intensely punitive practice that can pressure consumers with crippling compounding debt.
After the CFPB proposed slashing credit card late fees to just $8 a month in February, the reaction has been swift and predictable — banks raged.
It’s time for them to rip off the late-fee Band-Aid and find new income streams. This would be an opportunity to adjust business models and determine how to drive value beyond late fees. Those banks that figure it out will be lightyears ahead.
A simple shift to subscriptions would replace the revenue and be much more palatable for consumers if they knew late fees were dusted in exchange for a modest monthly cost.
Banks also have to know there are many in Congress coming after these fees.
Fintechs have built their businesses on a no-fee subscription model for years, and if banks get it figured out, it would be interesting to see how it impacts competitiveness in the industry.
From Fintech Nexus
 USA Will fintech take over regional banking? By Isabelle Castro Margaroli Regional banks have taken a beating – fintechs’ customer-centric flexibility may provide an answer to their flawed system. |
| LatAm Competition on foreign currency products heats up in Brazil, unveiling a new niche By David Feliba Nomad, which offers dollar accounts to Brazilians, will now allow its customers to pay in installments for purchases made abroad. |
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- Global: Some challenger banks are challenged I’ve written quite a lot about Revolut and Monzo, as well as many other challenger banks. Now, as we hit hard times with rising inflation, interest rates, and a recession looming in so many markets, what’s the state of the fintech nation? Well, it’s challenging for challengers.
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- LatAm: Marriott signs industry-first collaboration with Rappi in LatAm Marriott International announced today that it has signed an industry-first agreement with Rappi, Inc., the multi-latina technology company. The collaboration aims to increase everyday earning opportunities and offer an elevated travel experience for both Marriott Bonvoy members and Rappi users.
- USA: Fintech Nexus 2023 – Fintech forever Rising interest rates, stubborn inflation, and the encroachment of AI were topics of discussion at Fintech Nexus. We find ourselves at a crossroads again, and the industry must find its footing to reinvent itself.
- USA: What an FTX reboot could look like and is it even viable? The crypto exchange that filed for bankruptcy last November would endure a long road to raise funds, clear debts, and gain trust, law pros say
