Wells Fargo‘s (NYSE: WFC) co-branded credit card partnership with fintech startup Bilt Technologies is facing difficulties, with the bank allegedly bleeding up to $10 million monthly on the program according to a report from the Wall Street Journal on Sunday.
The report, citing current and former employees, suggests that Wells Fargo’s revenue projections, such as customers carrying balances, were inaccurate. Consequently, the bank has reportedly stopped bidding on new co-branded card initiatives and is negotiating its arrangement with Bilt, threatening not to renew the contract unless changes are made in its favor.
However, both Wells Fargo and Bilt have denied the claims, with a Wells Fargo spokesperson saying that there have been no discussions among decision-makers to exit the agreement and that the partnership is typical of new card launches, requiring multiple years to pay off.
“You can’t believe everything you read in the news,” Bilt CEO Ankur Jain said on X, responding to a tweet about the story. “Wells Fargo went on the record with the WSJ stating: ‘There has been no conversation among decision makers to exit the BILT agreement. To suggest otherwise is false.’ The WSJ chose not to run this.”
The Bilt credit card, launched in 2022, allows users to pay their rent while earning rewards points without incurring fees from their landlords. The card has attracted over one million accounts, many of which belong to young adults. The reports of the partnership’s troubles come at a time when Wells Fargo’s CEO, Charlie Scharf, has prioritized expanding the bank’s credit card business. The bank has invested at least $20 million in Bilt, an unusual arrangement in the credit card industry.
Information for this story was found via WSJ, PYMNTS.com, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
