Westwood-based fintech company Sunbit has entered the payment card industry with the launch of its own no-fee credit card, which competes primarily with purchasing-to-pay firms such as Klarna, Affirm and Sizzz.
In addition to standard credit card features, the Sunbit Card offers authorized users a personalized APR and allows individual transactions to be paid in full or with three, six or 12 month payment plans. There are no annual fees, application fees, late fees or penalty fees – and no fees to withdraw or withdraw a transaction from a payment plan at any time. The card is managed through the company’s MySunbit app.
“I think what we’re trying to accomplish is to get the best of all these different[payment solutions]into one card and mobile app without any fees,” Sunbit chief customer Bill Walsh said. Officer, he said. The card is issued under VISA authorization by TAB Bank in Utah.
To date, Sunbit Card has clocked over 65,000 early access cardholders and has 400,000 more consumers on its invitation list.
Sunbit has access to over 14,000 points of sale locations across the country, including businesses such as car dealership service centers, radiology practices, dentist offices, veterinary clinics and specialty healthcare services.
However, CEO Arad Levertov said Sunbit’s aim is to expand adoption of the card, but there are several reasons for the company’s cover. According to a report by financial analysis website pymnts.com, the United States business market will consist of approximately 29 million small and medium-sized businesses in 2020.
“There is a large merchant base and Sunbit has a small market share,” said Dave Maddox, payment industry consultant with independent payment consulting firm Thinkpayments and retired business development leader at IBM. “They’re targeting the lower market, which is an underserved market, no doubt.”
Maddox added that buy-now-pay-later (BNPL) services and companies have gained a lot of attention during the pandemic when cardholders are out of work and ineligible for credit cards. Since then, BNPL’s trading volumes have come down, with companies like Affirm losing more than 75% of its value this February. Affirm’s stock currently trades around $35, a far cry from late last year, when the stock was trading at more than $160 per share.
“(Sunbit’s) targeting seems good to me, at least because they’re focused on individual segments where sub-consumers are in trouble and need to finance something,” Maddox said, citing auto dealerships as an example. Place.
Filling the gaps
It took more than two years to develop the Sunday card, Walsh said, adding that the company spent a significant amount of time researching what gaps in personal finance could be filled with the card.
One issue found in Sunbit’s research is that more than half of the customers in the study have multiple checking accounts that are used to handle various purchases.
“I think when we started seeing these common themes with the personal finance life hacks that clients were all making work, it inspired us to go down that path and feel like we were on to something,” Walsh said.
However, Walsh added, a bigger challenge awaits Sunbit in growing the card’s user base: figuring out how a card will work in an industry with older card-based technology that consumers are familiar with.
“They have to find consumer interest, educate consumers and make sure people are comfortable with the app,” Maddox said. “And they’re competing with PayPal, they’re competing with real name[companies]like Klarna.”
Persuading consumers is only one piece of a larger puzzle, Maddox says. He explained that successfully pushing the product to dealers over competitors will be a challenge, because dealers are looking for a single financial solution in assembling multiple platforms from different companies.
Sunbit will structure its merchant agreements, which are extensive and detailed documents, that will determine how successful the company is in persuading merchants to accept the service, Maddox said.
Maddox said if he were to invest in the company, he would want to better understand Sunbit’s estimated credit losses, current credit losses and how it plans to bring more traders on board. “They go after the top market with credit cards, which makes it more challenging to understand what[their]credit losses might be,” Maddox said.
Levertov said Sunday’s advantage is that it has gathered a lot of data over the past six years of business. “There’s always a challenge when you give credit, but we’re confident in our ability to measure it and overcome it, because that’s what we’ve been doing over the years,” Levertov said.