Recently I sat across from a popular fintech creator/Podcaster (episode drops in December), and he asked me about the SEO Apocalypse article I wrote for The Free Toaster a couple of months ago.

In that article, I shared that publishers like NerdWallet and Bankrate are seeing their organic traffic evaporate like venture capital in a rising rate environment.

While pontificating about why the SEO Apocalypse happened and what publishers should do about it, it hit me:

Most of the fintech lending industry has only been playing 50% of the marketing game.

Let me back up and explain before you close this tab to go optimize your Facebook campaigns.

What Became Clear While Trying Not to Sound Like an Idiot on a Podcast

Here's what I realized mid-conversation (and then spent all evening refining because apparently I can't help myself):

There are only two ways to arbitrage attention in fintech marketing. That's it. Two. Not seventeen different growth hacks or forty-three channels in your attribution model. Just two.

Media Arbitrage: Buying attention for less than you can monetize it for. Clicks costs $1, but I can monetize them at $2, so I pocket the difference and update my LinkedIn to say "Growth Hacker Extraordinaire." This is asking for the close. Direct response. The instant gratification that makes VCs nod approvingly during board meetings and makes your CFO high-five you at the water cooler.

Brand Arbitrage: Giving so much value that people actually remember you exist when they're not actively shopping for financial products. This is the long game. The patient game. The game that makes your performance marketing team break out in hives. This “arb” is less popular with VCs and CFOs, at least in fintech lending.

Asking and giving. The only two ways to arbitrage attention.

And here's the thing that made me pause mid-sentence on this podcast:

Many fintech companies don’t invest at all in the second one (brand arbitrage / giving), and many aren’t aware of the liability that creates.

Why Your "Organic" Traffic Is Neither Organic Nor Yours

Let me drop a little bomb that the host's question made painfully clear:

—> There's no such thing as organic traffic.

I know, I know. You're looking at your Google Analytics right now, pointing at that beautiful green "Organic Search" segment. But that traffic? It's either:

• The compound interest from years of content creation (that you probably stopped investing in because "it doesn't scale")

• Brand spillover from your paid campaigns (people Googling you after seeing your TV or Credit Karma ads 47 times)

• A temporary algorithm blessing that's about as stable as the newest meme-coin’s stock ticker

The host asked me if SEO traffic would come back for these publishers. You know what I should have said? "Sure, right after WeWork becomes profitable and crypto becomes boring."

A Confession About My Own Business (That Should Scare You)

Here's something vulnerable I realized (but didn’t share on the Podcast):

If LinkedIn banned me tomorrow – just completely nuked my account – my consulting business might survive for six months to a year. And then poof it would be gone (unless I really hustled to regain the brand marketing I get done there elsewhere).

Why?

Because I've been accidentally building brand equity this whole time. The content I've been pushing out, the newsletter you're reading right now, the podcast appearance that led to the content here – it's all compound interest in the brand bank.

But if 95% of my business came from paid channels and five competitors showed up tomorrow willing to outbid me? I'd go to zero faster than you can say "CAC payback period."

That's the difference between media and brand arbitrage. One dies instantly when you turn off the faucet. The other has momentum. Durability. The marketing equivalent of a cockroach surviving nuclear winter.

The Two Types of Brand Arbitrage (Because Of Course There Are Subtypes)

During the conversation, I realized brand arbitrage isn't just one thing. It's actually two distinct plays:

Attention Arbitrage: People seek you out because you've provided so much value they actually like you. Crazy concept in fintech lending, I know. This is when someone tells their friend about your product at brunch without being incentivized. Without a referral code. Just because they want to.

Conversion Arbitrage: You've made yourself so familiar that when someone sees you in a sea of options, they pick you. This is why Chase runs those feel-good commercials with absolutely zero product information. They're not selling; they're familiarizing.

When I’m at my best (I’m often not), my content strategy should do both.

People find me AND they convert at higher rates because they've been marinating in my content. But here's the kicker – I didn't plan this. I stumbled into it.

I’m worried many fintechs won't stumble into because they're too busy optimizing their Google Ads or affiliate programs, and haven’t even contemplated their brand or “giving” strategy.

The Prescription I'm Writing for Every Fintech Marketer (Including Myself)

After sleeping on this conversation, I’ve distilled down some actionable advice for your marketing org (so that you can avoid a major distribution disruption some of your publisher partners are experiencing right now):

1. Crank Up Your Give To Ask Ratio - For long-term growth, many expert suggest a 3(give):1(ask) ratio. Even better at 10:1 if you can afford to do it. For every time you ask for something (email, signup, purchase), give value at least three times over. Yes, this means creating educational, entertaining, or inspiring content without a CTA. I can feel your CFO’s anxiety already.

2. Diversification Isn't Just for Investment Portfolios - If one platform can destroy your business with an algorithm change, you don't have a durable marketing strategy – you have a single point of failure. This one won’t be controversial with your C-suite.

3. Own Your Channels Like Your Life Depends on It - Because it does. Email lists, SMS, push notifications, carrier pigeons trained to deliver QR codes – do whatever you can to reach your audience directly without permission from the Platform Overlords.

4. Build A Duel-Threat Team - You might be amazing at performance marketing, analytics, and credit (and clueless at brand building). Many fintechs teams are constructed this way. There's no shame in admitting it. There IS shame in ignoring it until your CAC explodes and your investors start asking uncomfortable questions.

Closing Thoughts

I hope this article doesn’t read like I'm asking you to stop running paid campaigns. That would be like telling you to stop breathing.

But if you're building a fintech to grow for the next 10 to 20 years, I’d suggest playing both games (media + brand arbs). Now. Not next quarter. Not after your Series B. Now.

Because here's what I didn't say on the podcast but should have: The companies that win in fintech won't be the ones with the best unit economics or the slickest apps. They'll be the ones that figured out how to build a brand in an industry that thinks brand is just a logo and a color scheme.

The great SEO apocalypse wasn't just about search engines.

It's about what happens when any single channel decides they’re not that into you anymore. And if you're not building brand equity alongside your performance marketing machine, you're just one algorithm update away from becoming a case study in someone else's newsletter.

Maybe even this one 🙂 

🎧 Get More Color on the Podcast

We go into more details on this topic on The Free Toaster Podcast.

E034 – Media Arbitrage vs. Brand Arbitrage

Listen on Apple Podcasts or Spotify.

Want the full picture?

This article pairs with The SEO Apocalypse Has Arrived, our breakdown of how Google’s AI updates reshaped organic discovery.

Support The Free Toaster

Need to improve application page conversions? Chat with Spinwheel

Need an affiliate marketing platform/network? Chat with Fintel Connect

Need help hiring key roles? Email Connie Buehler and mention TOASTER

Need to accelerate your affiliate marketing? Chat with New Market Growth

Need to win on other growth channels? Chat with FIAT Growth

None of the above? Share our Newsletter in your favorite Slack channel

About Us

Welcome to The Free Toaster! The newsletter for marketing pros at fintechs, banks, and lenders. 

Inspired by the free toasters banks used to give to each new customer, we’re here to help you acquire more customers at scale. We deliver fresh news, data, and insights to help you acquire more customers, minus the breadcrumbs.

Want to follow the authors on social media?

Carlos Caro is the founder of NMG, an agency that helps lenders build affiliate programs.

Nick Madrid is the co-founder of Uncovered Media and a co-founder of Ghostmode (a media company that builds Newsletters, Podcasts, and communities in high-value B2B niches).

Source: https://www.svb.com/trends-insights/reports/fintech-industry-report/

TL;DR - We summarize SVB's October 2025 fintech report. The Fed is expected to cut rates by 100-125 basis points over the next year, potentially boosting consumer demand for loans. However, student loan delinquencies have surged above pre-COVID levels, with borrowers under 49 holding more student debt ($1.2T) than mortgages ($1.0T), signaling caution for lenders. The regulatory environment has become more favorable for fintechs with a trimmed-down CFPB, while companies have shifted focus from growth to profitability. Meanwhile, VC funding requirements have increased, with Series A companies now needing $4MM in revenue versus $1MM in 2020-2021.

1. The market expects the Fed Funds Rate to drop, but by how much?

SVB’s The Future Of Fintech Report, Oct 2025

This charts tell us what been circulating in the news for months - the Fed is going to cut rates.

But, by how much?

To measure this, we looked at CME FedWatch.

There, we learned two things.

CME FedWatch

First, it’s a near certainly (97.8%) that the Fed will cut rates by 25 bps at its next meeting on October 29th, 2025 (that’s tomorrow!).

CME FedWatch

Second, it seems like rates will decrease by 100-125 bps one year from today, with a 57.6% probability.

Additionally, CME FedWatch shows a 19.7% chance of a greater than 150 bps reduction, and a 22.7% chance of a reduction of 75 bps or less.

This could drive consumer demand to rate-sensitive lending businesses like personal loans, auto refinances, and mortgages, assuming macro credit health (delinquencies and losses) don’t change.

So what does SVB’s report suggest about that?

2. Delinquency rates look healthy (with one big exception)

SVB’s The Future Of Fintech Report, Oct 2025

The CFPB’s survey, though a little dated, is showing increasing financial strain among households less than 61 years old.

SVB’s The Future Of Fintech Report, Oct 2025

With that color from the CFPB survey, we look to the delinquency rate. There we see DQs more or less steady in the credit card, auto, and “other” categories, with mortgages showing an increase from 2024 to 2025.

What jumps off the page is the student loan data.

We’re now above pre-COVID era delinquency rates in student loans, with people under 49 (according to this chart) holding more student loan debt ($1.2T) than mortgage debt ($1.0T)! ¹

This implies lenders should be cautious, and the chart below supports that:

SVB’s The Future Of Fintech Report, Oct 2025

Lenders I speak with comment that the credit expansion that started in 2021 led to higher than expected losses in some cases.

Today, we’re seeing a more prudent approach reflected, which likely bakes in macro uncertainties (what will the Fed do?, will the consumer stay strong?) with a cool-off that you’d expect following a period of major expansion.

3. A more favorable regulatory environment for Fintechs

Setting aside your views about the current administration, investors have voted clearly in favor of the current environment for Fintechs:

SVB’s The Future Of Fintech Report, Oct 2025

For lenders specifically, a reduced-staff CFPB and a repeal of bank rate fee caps presents a more favorable operating environment.

SVB’s The Future Of Fintech Report, Oct 2025

4. Fintechs are prioritizing profitability over top-line revenue growth

SVB’s The Future Of Fintech Report, Oct 2025

I’ve heard it in board rooms for years. Profitability over growth. Profitability over growth.

SVB’s public fintech cohort data shows revenue growth notably down from the ZIRP era, and profitability notably up.

Looks like CEOs have been taking those boardroom conversations to heart.

5. The bar to raise VC money has increased

This chart says it all:

SVB’s The Future Of Fintech Report, Oct 2025

The median fintech raising a Series A in 2020-2021 had $1MM in the nearest monthly or quarterly financial statement. In the last 24 months, that number has increased to $4MM.

That chart above shows a similar pattern of increasing revenue bars for Series B and Series C companies.

With advances in technology and profitability/sustainability valued at a premium, investors can be pickier about which companies they fund.

Recap: Takeaways for Lenders

1. The market expects Fed rates to decline by 100-125 bps in the next 12 months, potentially boosting consumer demand for loans.

2. High delinquency rates (12%+) in the student category is a reason for lenders to be cautious with new originations.

3. The current government administration is creating a favorable regulatory environment for lenders.

4. Fintechs are trading lower growth for higher margins to meet investor demands.

5. The revenue bar for raising VC has increased, and may continue to increase as founding teams learn how to do more with less headcount (with AI and improvements in the fintech technology stack).

Footnotes:

1. Note that the SVB reports commentary said “Americans younger than 40 owe $1.2T in student debt, more than any other debt category.” Since this commentary is inconsistent with the chart we included that shows student debt outstanding, it is unclear which data point is accurate. In this article, we assumed was shown in the chart was correct.

Please support our Newsletter by recommending us to one of your colleagues!

And, please check out our sponsors:

Need an affiliate marketing platform/network? Chat with Fintel Connect
Need to improve application page conversions? Chat with Spinwheel
Need to accelerate your affiliate marketing? Chat with New Market Growth
Need to win on other growth channels? Chat with FIAT Growth

About Us

Welcome to The Free Toaster! The newsletter for marketing pros at fintechs, banks, and lenders.

Inspired by the free toasters banks used to give to each new customer, we’re here to help you acquire more customers at scale. We deliver fresh news, data, and insights, minus the breadcrumbs.

Want to follow the authors on social media?

Carlos Caro is the founder of New Market Growth, an agency that helps lenders build affiliate programs.

Nick Madrid is the co-founder of Ghostmode, a media company that builds Newsletters, Podcasts, and communities in high-value B2B niches.

For more than a decade, the digital economy operated on a beautifully simple premise: rank high on Google, get customers, and (hopefully) print money. Companies dumped billions into SEO like it was a reliable annuity.

Well, that annuity is past due and the foreclosure notice just arrived. It’s written in AI.

The most recent example?

In NerdWallet’s Q2 2025 earnings report, they shared that their credit card business is down 25% year over year, while the card category at large and competitors like Credit Karma have been growing.

Their explanation? "…more pronounced organic traffic challenges."

Source: NerdWallet’s Q2 2025 Shareholder Letter (highlighted text is the author’s emphasis)

The carnage is everywhere.

What many are calling an "extinction-level event" for content-driven businesses is a reality seen in traffic dashboards and earnings reports across Wall Street.¹

This doesn’t feel like another algo update that will blow over. This is structural.

Google is systematically burning down (and rebuilding) the ecosystem that made digital content marketing initially viable, and they're doing it on two fronts.

The "Helpful Content" Ground-Clearing

Starting in September 2023, Google launched its "Helpful Content Update" (HCU)—a series of algorithm changes supposedly designed to reward content that's "helpful, satisfying and original".² The stated goal was to reduce low-quality content visibility by up to 45%.²

Sounds reasonable, right? Except this wasn't just a spring cleaning. It was a strategic ground-clearing operation. The HCU introduced a brutal, site-wide penalty that could suppress a domain's entire visibility if Google deemed it had too much "unhelpful" content.³ This was Google curating the web for its true new customer: its own AI.

The move devastated independent publishers, with some losing up to 95% of their traffic.² SEO strategist Lily Ray put it bluntly: "Google's just committing war on publisher websites. It's almost as if Google designed an algorithm update to specifically go after small bloggers".²

The subsequent June 2025 Core Update only accelerated the chaos, introducing "widespread volatility" and further cementing the shift toward an AI-first world.⁷

The Birth of Zero-Click

With the web prepped for machine consumption, Google unleashed its endgame: AI Overviews.

These AI-generated summaries now appear at the top of search results, answering user questions directly on the page.¹ Why send users to your website when Google can just scrape your content, synthesize it, and present it as its own?

This is the "Great Decoupling"—the severing of the economic link between creating content and getting traffic.²³

Let’s check out the stats:

• Zero-click searches for news queries have surged from 56% to nearly 69% since AI Overviews launched.²⁴

• A Pew Research Center study found that when an AI summary appears, users are half as likely to click a traditional link, with the click rate collapsing from 15% to just 8%.¹

• One lifestyle publisher watched their click-through rate for a page-one ranking collapse from 5.1% to 0.6% in a year.²⁶

• An automotive publisher saw a 25% traffic drop despite ranking first in organic search.²⁶

It’s almost like Google is saying: "Thanks for creating all this content we can train our AI on. OK thanks, bye."

The Damage Report: Nobody's Safe

The SEO changes are hitting everyone from small blogs to publicly traded companies.

For smaller publishers, it has been an extinction event.

• The popular travel blog The Planet D was forced to shut down entirely after its traffic dropped by 90%.¹

• UK entertainment site Ready Steady Cut lost 50% of its traffic overnight and had to lay off its entire writing team.²

Even the giants are bleeding.

• CNN's website traffic has dropped by approximately 30% year-over-year.¹

• OprahDaily.com lost 58% of its search traffic.²

• New York Magazine dropped 32%.²

• GQ.com fell 26%.²

It’s showing up in the Q2 2025 earnings reports, too:

• NerdWallet (NASDAQ: NRDS)—a company that literally built a financial empire on search traffic—reported a brutal 25% year-over-year revenue decline in its Credit Cards vertical. Management didn't mince words, blaming “…more pronounced organic traffic challenges”. When an SEO-driven business tells Wall Street that SEO isn’t working anymore, you pay attention.

• HubSpot (NYSE: HUBS)—the company that wrote the playbook on content marketing—is now executing a massive strategic pivot. On their Q2 earnings call, the CEO revealed that a staggering 90% of the company's leads now originate from non-blog sources like social media and podcasts.²⁹

Source: Hubspot Q2 2025 Investor Presentation

That last point is worth repeating.

The company that taught everyone else how to do content marketing is actively de-risking its business away from the very search engine it helped everyone optimize for.

If HubSpot can't rely on SEO anymore, should you?

Where We Go From Here

Chasing Google's algorithm is like trying to solve a Rubik's cube that changes colors every time you touch it. The companies that survive this transition will be the ones that stop treating Google like a landlord and start building their own (media) real estate.

Action Item #1: Shift from SEO to GEO

Search isn't disappearing, but the optimization game has changed. The new discipline is Generative Engine Optimization (GEO)—making your content discoverable and valuable to AI models.³⁰ The goal is no longer to rank #1 in a list of links; it's to become the trusted source cited within the AI's answer.

This means:

• Directly answering questions with structured data (think Q&As, bullet points, and schema markup) so AI crawlers can parse your stuff easily.³⁶

• Doubling down on E-E-A-T (Experience, Expertise, Authoritativeness, Trust). In an AI world, verifiable authority is the ultimate currency.⁶

• Building brand authority as a trust signal. When AI can't tell what's real, it will default to brands it trusts.³⁸

Action Item #2: Build Natively, Everywhere

Google isn't the only game in town anymore. People search on YouTube, Reddit, TikTok, and Instagram²⁶ . A shocking 40% of Gen Z now prefers searching on TikTok or Instagram over Google⁴² . The smartest companies are optimizing for "Search Everywhere" instead of putting all their eggs in one increasingly fragile basket.⁴³

This requires platform-native content strategies:

• YouTube for personality-driven education and tutorials.⁴⁰

• Reddit for authentic community discussions and earning trust.⁴⁵

• TikTok and Instagram for visual discovery and reaching younger audiences.⁴²

Different platforms, different strategies. But all aimed at the same goal: reaching your audience where they actually are, not where Google used to send them.

Source: SEO.com

Action Item #3: Build On Your Own Land

The ultimate defense against algorithmic chaos is a direct relationship with your audience. The future belongs to companies that own their customer connections, building assets that Google can't devalue overnight.

• Email lists that can't be algorithm-nuked.

• User accounts that create switching costs.

• Mobile apps that bypass search entirely.

• First-party data that allows you to build resilient, personalized experiences without relying on a middleman.⁴⁶

The Bottom Line

SEO is changing quickly. The age of algorithmic dependence is ending. And that might be a good thing.

This painful moment is forcing companies to do what they should have been doing all along: building their brands, creating genuine value, and forging direct relationships with their customers.

The brands that survive this upheaval will be more resilient, more defensible, and less vulnerable to the whims of a single platform.

Support The Free Toaster

Need an affiliate marketing platform/network? Chat with Fintel Connect

Need help hiring key roles? Email Connie Buehler and mention TOASTER

Need to improve application page conversions? Chat with Spinwheel

Need to accelerate your affiliate marketing? Chat with New Market Growth

Need to win on other growth channels? Chat with FIAT Growth

None of the above? Share our Newsletter in your favorite Slack channel

About Us

Welcome to The Free Toaster! The newsletter for marketing pros at fintechs, banks, and lenders. 

Inspired by the free toasters banks used to give to each new customer, we’re here to help you acquire more customers at scale. We deliver fresh news, data, and insights to help you acquire more customers, minus the breadcrumbs.

Want to follow the authors on social media?

Carlos Caro is the founder of NMG, an agency that helps lenders build affiliate programs.

Nick Madrid is the co-founder of Ghostmode, a media company that builds Newsletters, Podcasts, and communities in high-value B2B niches.

Works cited

If you want a look into marketing-geek anxiety, go grab a coffee with a fintech lending CMO and ask about their distribution channels. Listen long enough, and many will quietly admit their growth is closely tied to the affiliate marketplace category. They mean sites like Credit Karma, Experian, NerdWallet, Bankrate, and a few others.

These channels have been great for growth, but concentration has been an unintended side-effect.

Our informal convos with U.S. fintech lenders suggest that anywhere from 30% to 70% of their new customer volume comes from affiliate marketplaces, with the remainder coming through direct mail, paid search, paid social, and some first party channels.

The global affiliate marketing industry (all categories, not just lending) is expected to reach $18.5B in 2025, while global affiliate revenues are set to hit nearly $32B by 2031. In U.S. consumer lending specifically, we estimate brands spent $4B-$6B per year on affiliate marketing.

As the category grows, lenders are left hoping they remain in good standing as marketplace platforms tinker with rankings, increase product/competitive density, and perfect their algorithms.

In parallel, lender innovation is accelerating.

Take Yendo’s vehicle-secured credit card, which lets subprime consumers unlock up to $10,000 in credit, by backing the card with an auto title. Or consider the upcoming Coinbase One Credit Card, which plans to pay a full 4% on every purchase for consumers that hold enough assets in their Coinbase accounts.

Product innovation will lead to more competition. And more competition will put increasing pressure on consumer lending brands to find new (and growing) sources of customer acquisition.

The Setup: Finfluencers Are Under-Monetizing

The global creator economy—spanning from YouTube to TikTok—has minted its own crop of “Finfluencers” who have established a level of trust with their audiences that lenders would kill for.

In 2024, the influencer marketing industry hit an estimated $24B, almost doubling since 2019. Influencers over-index on audience trust and engagement, yet only about 13% of them (across all categories) earn more than $100,000 per year in 2023.

With more than 400,000 followers and posts that average 100,000 views, Clint Brantley is a big creator. But he only made $58,084 in 2023 (less than the U.S. median pay for full-time workers).

Huge financial creators like Vivian Tu (aka Your Rich BFF) had an audience of over 5MM viewers in 2022, and pulled in over $3MM in revenue that year (paying herself $300,000).

Influencers have mastered getting attention, but are still in the infancy of monetization.

Social platforms own the rails, fintechs own the product, and creators are monetizing with one-off sponsorships or course sales rather than ongoing affiliate partnerships that pay them a percentage of the value they create for their brands.

How Much Money Could Vivian Tu (Your Rich BFF) Be Making?

Let’s study the $3MM in revenue Vivian made in 2022 from her 5MM audience. That’s 60 cents per audience member per year.

To make the analysis simple, we’ll look at Credit Karma and NerdWallet, two publishers who report their revenues and audience sizes publicly.

Credit Karma made $1.6B in revenue in fiscal 2023, with a member base of 130MM. That’s $12.31 per audience member per year—20X better monetization than Vivian.

NerdWallet made nearly $600MM in revenue in fiscal 2023, with an average of 24MM monthly unique users (MUUs). That’s $25 per MUU. That’s difficult to compare to Vivian’s performance since we only know her total audience, and not her MUUs.

If Vivian monetized at Karma’s $12.31 per audience member per year rate, she would have pulled in $61.5MM in revenue in what’s probably a 2 or 3 person operation.

Now she’d be Your Even Richer BFF.

And to make it crazier, I can think of reasons why Vivian’s monetization could be better than Karma’s (with the right infrastructure behind her). But that’s a rabbit hole for another day.

What I want you to take away is that even the best Finfluencers are severely underpaid, when you compare them to best-in-class monetization benchmarks in the traditional financial media space.

Lenders Will Continue To Funnel Advertising Dollars To Finfluencers

Consumer demand for trusted, direct financial advice keeps climbing. And the influencer channel is producing strong returns for the brands already investing.

How do we know that?

Businesses see an average of $6.50 in revenue for every $1 spent on influencer marketing, highlighting the yield influencers can drive as performance marketers.

The above data isn’t specific to the lending industry.

But our analysis above—showing how Finfluencers like Vivian Tu are severely under-monetizing relative to traditional publishers—help paint the picture that 2025 Finfluencer media could be an exceptionally good deal for lenders.

The Rise Of The Digital Twin

A technological wave is forming that will drag both lenders and creators—willing or not—into the future.

The global AI chatbot market is exploding, growing from under $14B in 2025 to a projected $46–47B by 2029. In financial services alone, AI-powered agents are expected to save the industry $80B in customer service costs by 2026, with chatbots automating between 30% and 80% of interactions depending on the institution.

But it’s not just big orgs that will benefit from this tech.

What’s coming is that any Finfluencer can deploy a “digital twin” at unlimited scale.

These “twins” will be 24/7 personal finance assistants that answer questions in the creator’s voice, recommend products from a curated affiliate catalog, and provide compliant, personalized advice.

And these twins won’t be just chatbots. They’ll be voice agents you can call and video agents you can chat with on Zoom. They’ll have the image, voice, and likeness of the creator. It’s going to be wild.

Imagine a creator with 250,000 followers who’s never been able to scale 1:1 advice suddenly mobilizing an army of “digital twins” that matches individual audience members with lending products, explains APRs, terms, fees, and handles application handoffs—with bank-approved compliance and reporting built-in.

This is what will get Vivian to $61.5MM in revenue per year (in practice it’ll be even more revenue, because she’ll have more resources to reinvest in content, distribution, and technology).

The Skeptics May Be Losing Sight of Consumer Behavior

When I chat informally with friends in the industry I hear:

“Lenders will never delegate distribution to creators and AI.” “Creators won’t trust bots to speak for them.” “No one really wants advice from an AI, right?”

But the facts are telling another story:

• Lenders are actively exploring how to diversify customer acquisition; the white space for new origination channels (especially B2B and embedded distribution) is a top boardroom topic. [CAIS Group]

• AI chatbots now resolve up to 80% of customer service inquiries without human intervention, with customer satisfaction scores increasing as implementation matures. [Kayako]

• Consumers are acclimatizing to AI-powered advice as trustworthy in their digital finance lives [CFP.net]

Early-mover lenders who figure out compliance and content governance will lead the next distribution land grab.

The Next Billion Dollar Distribution Platform

A platform is going to emerge—and fast—where Finfluencers can launch always-on AI assistants, seamlessly integrating with affiliate partners and full-stack compliance engines. Creators focus on building trust and content; the platform takes care of product matching, disclosures, compliance, and payments; lenders gain access to performance-based, customer origination at scale in a channel their competitors are ignoring.

The VCs and operators that power Finfluencer Monetization for the ecosystem at large will be drinking Cristal and flying private to the Maldives for their off-sites.

How Fintech Lenders Should Prepare

If you’re a fintech lender reading this, the playbook is coming into focus:

As reasonable as the above preparations sound, many lenders won’t take any action at all. Because combining AI with social media will be viewed with skepticism.

It will feel like a nightmare from a compliance perspective, and it will feel overwhelming from a partnership perspective (who’s going to go find, sign, and manage all these Finfluencers?)

But guess what?

Lenders were skeptical of internet-sourced loan applications in the early 2000s.

Lenders were skeptical of paid search in the mid 2000s.

Lenders weren’t sure if consumers would bank on mobile devices when the iPhone shipped in 2007.

Lenders weren’t sure Credit Karma was going anywhere in 2010.

Lenders weren’t sure social media ads would produce a return in 2012.

And, the list goes on.

By design, lenders are paid to worry and be skeptical. They manage risk for a living.

So you might be skeptical that AI Influencers will have any impact on your distribution strategy. And that’s OK. But what bets can you place today to keep a pulse on the market, so that you can lean in when it starts working?

Enjoyed this piece? Sign up for The Free Toaster Newsletter at www.thefreetoaster.com. We cover news, research, and insights at the intersection of marketing & consumer lending.

Support The Free Toaster

Need an affiliate marketing platform/network? Chat with Fintel Connect

Need help hiring key roles? Email Connie Buehler and mention TOASTER

Need to improve application page conversions? Chat with Spinwheel

Need to accelerate your affiliate marketing? Chat with New Market Growth

Need to win on other growth channels? Chat with FIAT Growth

None of the above? Share our Newsletter in your favorite Slack channel

About Us

Welcome to The Free Toaster! The newsletter for marketing pros at fintechs, banks, and lenders.

Inspired by the free toasters banks used to give to each new customer, we’re here to help you acquire more customers at scale. We deliver fresh news, data, and insights to help you acquire more customers, minus the breadcrumbs.

Want to follow the authors on social media?

Carlos Caro is the founder of NMG, an agency that helps lenders build affiliate programs.

Nick Madrid is the co-founder of Ghostmode, a media company that builds Newsletters, Podcasts, and communities in high-value B2B niches.

Income verification might not be the sexiest part of fintech, but it's arguably one of the most important. What's the point of having a slick lending app if you can't tell whether borrowers have the means to pay you back?

I recently caught up with Kirill Klokov, CEO of Truv, to get his take on how lenders should think about income verification in 2025. He shared his hard-earned lessons that every lender should internalize.

1/ The Waterfall Strategy Is Everything

Here's a stat that should make every lender's product team nervous: 35% of borrowers drop off when presented with bank credential verification (like Plaid).

The worst part? Those dropoffs might actually be your best customers – the ones with other options who leave at the first sign of friction.

Kirill's solution is elegant: the waterfall approach. Start with consumer-permissioned data (lowest cost option), then fall back to instant databases (more expensive, but lower friction), then finally manual document review (the failsafe). As he explains, "You want to subsidize the instant database cost with a very cheap solution upfront."

The key insight: present the low cost option first, but always give borrowers an escape hatch. A simple "skip verification" button can dramatically reduce funnel dropoff while still capturing the data you need from willing participants.

2/ Most Verification Vendors Are Selling the Same Commodity

This one might sting for vendors in the space, but Kirill doesn't mince words: "If you actually go ask five aggregators who they're using, you would realize that everybody under the hood is using roughly the same dataset."

The differentiation isn't in the underlying data – it's in the intelligence layer on top. Can you rebuild pay stubs from bank statements using machine learning? Can you spot expense patterns that indicate risk? Can you handle the complexity of gig workers, multiple income streams, and variable compensation?

For financial institutions evaluating vendors, this means looking beyond coverage statistics and focusing on the analytical capabilities that turn raw data into actionable insights.

3/ Fraud Is Everywhere (And Getting Worse)

Want to buy a fake pay stub? Google "pay stub" and add "$7.99" to your search. You'll find plenty of options that look completely legitimate. And you’ll find them on the first page of Google, not the dark web!

This is the reality lenders are operating in, and it's only getting worse with AI-generated documents. As Kirill notes, "If you run risk scores on your existing documents, most likely you'll find a bunch of fraud."

The solution isn't better document analysis – it's getting data directly from the source. Payroll data is much harder to fake because "you have to go through multiple cycles of somebody paying taxes on your behalf. No fraudster would do that."

Check out the full conversation with Kirill Klokov on The Free Toaster Podcast.

4/ Pressure Test the Sales Pitch

Sophisticated lenders don't just take vendor claims at face value – they demand proof.

Kirill's advice: "You want to actually ask to run the back test analysis on your own data." Give vendors your last 10,000 transactions and see how they perform. Then verify those results using their API.

This data-driven approach cuts through marketing fluff and gives you real insight into which vendor will actually improve your business metrics. Too many lenders skip this step and regret it later.

5/ The Complete Product Wins

The future belongs to vendors who can handle 100% of your traffic, regardless of employment type. W2 employees, 1099 contractors, government workers, gig economy participants, self-employed borrowers – each requires different approaches and data sources.

As Kirill explains, building a complete product is like airlines beating railroads: "Airlines were in the business of transportation. Railroads were always in the railroad business."

Lenders don't want to piece together five different vendors for different borrower types. They want one partner who abstracts away all that complexity and just delivers clean risk signals.

6/ Financial Alignment Matters More Than You Think

Here's the most interesting development in the space: some vendors are moving away from per-transaction pricing toward success-based models.

Truv's "per closed loan" pricing means they only get paid when loans actually fund. This creates economic alignment – the vendor's success is directly tied to the lender's success.

For lenders, this eliminates the anxiety around verification costs eating into margins on low-conversion funnels. For vendors, it requires much tighter integration and partnership, but also demonstrates real confidence in their value proposition.

The Bottom Line

Income verification is quietly changing.

The vendors that survive won't be the ones with the best coverage statistics or the lowest per-transaction costs. They'll be the ones that best understand the core problem: helping lenders make better underwriting decisions while minimizing friction and fraud.

For lenders, the message is clear: think bigger than just verifying income. Look for partners who can help you understand borrowers holistically, handle the full complexity of modern income sources, and align their success with yours.

With AI making document fraud easier and the gig economy making income patterns more complex, the problem just got harder. And with vendor prices rising in the category (so we hear in the industry rumor mill), the stakes involved in getting this right may be higher than ever.

Support The Free Toaster

Need an affiliate marketing platform/network? Chat with Fintel Connect

Need help hiring key roles? Email Connie Buehler and mention TOASTER

Need to improve application page conversions? Chat with Spinwheel

Need to accelerate your affiliate marketing? Chat with New Market Growth

Need to win on other growth channels? Chat with FIAT Growth

None of the above? Share our Newsletter in your favorite Slack channel

About Us

Welcome to The Free Toaster! The newsletter for marketing pros at fintechs, banks, and lenders. 

Inspired by the free toasters banks used to give to each new customer, we’re here to help you acquire more customers at scale. We deliver fresh news, data, and insights to help you acquire more customers, minus the breadcrumbs.

Want to follow the authors on social media?

Carlos Caro is the founder of NMG, an agency that helps lenders build affiliate programs.

Nick Madrid the co-founder of Ghostmode, a media company that builds Newsletters, Podcasts, and communities in high-value B2B niches.

As the Chief Revenue Officer at Fintel Connect, Alana Levine lives in the trenches.

That’s the reason we invited her for a chat on The Free Toaster Podcast.

She’s often the first call when a lender or financial institution wants to “turn on” the affiliate marketing channel—and the first to spot when they’re about to step on a rake. In our 1-hour conversation, she pulled back the curtain on what FIs get wrong in the early days (and how to actually get it right).

In today’s Newsletter, we share Alana’s unfiltered pre-launch checklist.

The Strategic Foundation

Alana looks for five key indicators that signal strategic readiness, and understanding these upfront can save you months of frustration.

Geographic Reach: If your product serves a limited geographic area, affiliate marketing might not be your best first move. "We find anything that's too narrow—if they serve five counties in their area, affiliate just isn't for you at that point," Alana notes. This isn't a permanent limitation, but it's worth addressing before investing heavily in affiliate partnerships.

Product Differentiation: This is where many regional banks and newer fintechs struggle, and that's completely understandable. "Me Too products are a challenge," Alana explains. The question isn't whether your product is good—it's whether publishers have compelling reasons to promote it over established alternatives. If you're offering a standard 2% cashback card, think about what makes your particular version special.

Application Experience: Your conversion funnel becomes everyone's problem in affiliate marketing. "If you’re paying your partner at the bottom of the funnel and the conversion is way off, it doesn't matter how much you pay them, no one's winning," Alana notes. The encouraging news? Most conversion issues are fixable with some focused attention.

Budget Alignment: Let's talk numbers honestly. Alana suggests "$50,000 in spend is pretty healthy" as a starting point. This might sound daunting, but remember—this isn't money you're throwing away. It's an investment in data and relationships that will inform your strategy going forward.

Realistic Expectations: Particularly for fintechs, CPA expectations often need calibration. "Fintechs often cite CPA as a sticking point, whereas on the regional bank side, geographic coverage tends to be the issue," Alana observes. Understanding market rates helps set realistic goals.

The Operational Foundation

The operational requirements might seem basic, but they're the foundation everything else builds on. Think of this as your pre-game prep. You need to make sure your team understands the rules, brings the right equipment, and understands the playing field, so when the whistle blows they’re ready to play ball!

Digital Marketing Experience: "Affiliates work best when they're not operating in isolation," Alana explains. If you've successfully run other digital marketing channels, you already have much of what you need. If not, consider getting some paid search or display experience first—it'll make everything else easier.

Dedicated Landing Pages: Your existing application page probably won't work as-is for affiliate traffic. "The end customer and what experience you're wanting to take them through [should be] the focal point," Alana notes. This means creating pages specifically designed for affiliate traffic, with clear calls to action and minimal distractions.

Tracking and Attribution: This is often the most technically challenging piece, but it's absolutely critical. "Sending them a spreadsheet at the end of the month with how many conversions they've driven, is unfortunately not going to cut it," Alana explains. Publishers need real-time, granular reporting to optimize their efforts. If this feels overwhelming, know that there are partners and vendors who can help you set this up properly.

Written Publisher Guidelines: "It's almost meant to serve as a way for your legal and risk team to kind of buy into what this engagement looks like with the partners," Alana explains. This includes everything from content approval processes to competitive restrictions. Having these documented upfront prevents confusion later.

Performance Reporting: Beyond basic conversion tracking, the real value comes from understanding long-term customer quality. "What that allows you to do is optimize your spend towards the partners that are delivering you really high quality customers," Alana notes. This can help transform the affiliate channel from just another source of leads to a fine-tuned profit engine.

A Common Stumbling Block, Defining Success

Here's where many organizations stumble, and it's completely understandable why. "Defining your success metrics is the biggest one," Alana emphasizes. "I want to know really clearly what success looks like."

This isn't about setting unrealistic expectations—it's about alignment. When everyone understands what you're trying to achieve, decision-making becomes much clearer. Consider these dimensions:

• Volume goals: What does meaningful scale look like for your business?

• Quality standards: How do you define a valuable customer beyond just conversion?

• Channel contribution: What percentage of your overall acquisition should this represent?

One of Alana's clients recently gave her something very clear and actionable: "affiliate we've experimented with and it really hasn't worked and it's been 2% of our acquisitions. I want it to be 15 to 20%."

Test your success criteria on an external party. If you handed them that one-line description of success, would it be obvious to them in a year whether or not they achieved it?

Making A 6 Month Commitment

Unlike other performance channels, affiliate partners require a significant “warm up” period.

"If you aren't willing to at least keep it running for 6 months, anything less than that, is a waste of everyone’s time," Alana warns. But this isn't meant to discourage you—it's meant to help you plan properly.

The typical journey looks like this: Month 1 involves program setup and initial partner outreach. Months 2 through four see campaigns launching and initial optimization. Around month 6, successful programs typically hit their stride. "One account turns into a thousand really quickly, but zero to one feels like an eternity," Alana explains.

For organizations that really commit to excellence, Alana notes that "18 to 24 months is how long this really takes if you really want to hit your potential." This assumes you're treating affiliate marketing as a priority rather than a side project.

The Scale Of The Affiliate Marketing Channel

Before you feel overwhelmed, remember that affiliate marketing represents a massive opportunity in financial services. Alana notes that for many successful fintech lenders, "affiliates [are] 45% or more of their acquisition funnel." The channel works because it creates value for everyone involved—consumers get better products, publishers get fair compensation, and lenders get quality customers.

[And according to The Free Toaster’s research, consumer lenders spend $4B - $6B per year advertising in affiliate channels, presenting an enormous opportunity for most lenders].

The preparation might seem extensive, but each element serves a purpose. As Alana puts it, "The more that we can dispel the myths of how this channel works, the more we can focus on doing the hard work that drives wins for the partner, the lender, and the consumer."

Your Next Steps

If this checklist feels manageable, you're probably closer to ready than you think. If it feels overwhelming, that's completely normal—and it's better to know now than discover major gaps in the middle of an important campaign.

Remember, you don't have to figure this out alone. There are experienced partners (like Fintel Connect and New Market Growth) who've seen these challenges before and can help you navigate them.

If you’re honest about where you are and are committed to doing the foundational work that sets you up for long-term success, you’re playing the game the right way.

Questions about how to get started? You can find Alana Levine on LinkedIn.

Support The Free Toaster

Need an affiliate marketing platform/network? Chat with Fintel Connect

Need a way to accelerate your affiliate marketing? Chat with New Market Growth

About Us

Welcome to The Free Toaster! The newsletter for marketing pros at fintechs, banks, and lenders. 

Inspired by the free toasters banks used to give to each new customer, we’re here to help you acquire more customers at scale. We deliver fresh news, data, and insights to help you acquire more customers, minus the breadcrumbs.

Want to follow the authors on social media?

Carlos Caro is the founder of NMG, an agency that helps lenders build affiliate programs.

Nick Madrid the co-founder of Ghostmode, a media company that builds Newsletters, Podcasts, and communities in high-value B2B niches.

Hey Toaster Readers,

Our regular weekly news edition will be a day or two late this week. We got completely absorbed in a developing story: a proxy fight unfolding at Oportun.

We found the situation so compelling that we decided to dedicate a special deep-dive edition to it. We'd love to hear what you think of this!

Nick + Carlos

Inside the Oportun Proxy Battle: A Deep Dive into Strategy, Performance, and the Fight for Control

Oportun Financial (NASDAQ: OPRT), a publicly-traded lender with a social mission, is facing a notable challenge—not from regulators or competitors, but from an activist shareholder. Findell Capital launched a public campaign to overhaul Oportun's Board of Directors, claiming the current board has presided over a period of considerable loss in value and strategic missteps.

The situation presents two clear viewpoints. On one side, Findell argues that Oportun's leadership has underperformed through a failed attempt to become a diversified "neobank," culminating in a costly acquisition and deteriorating financial performance. On the other hand, Oportun’s management insists it already pivoted, is executing a "back to basics" turnaround, and that Findell’s campaign is a distraction that puts this progress at risk.

The central question for investors, employees, and the fintech community is this: Is Findell Capital a necessary catalyst for change at an underperforming company, or is Oportun's management already steering the ship back on course? This report lays out the facts for you to decide.

What is Oportun? The Mission and the Model

At its core, Oportun is a certified Community Development Financial Institution (CDFI), a designation from the U.S. Treasury awarded to institutions with a primary mission of serving low-to-moderate-income communities. It provides personal loans to individuals who are often "credit invisible," meaning they have little to no credit history and are shut out of the mainstream financial system.

Investor Presentation - June 2025

Today, Oportun's lending business is concentrated on two core products:

Unsecured Personal Loans: This is the company's foundational product and constitutes most of its revenue and profitability. These are simple, fully amortizing installment loans with fixed interest rates and an annual percentage rate (APR) capped at 36%.

Secured Personal Loans: Launched in April 2020, this product is secured by an automobile, allowing members to access larger loan sizes than they could with an unsecured loan. The company views this as a growth area due to its lower credit losses.

Investor Presentation - June 2025

Oportun 2024 10-K

The company makes money primarily through the interest earned on this loan portfolio. But the "mission-driven" angle is what truly defines the brand. Oportun targets hardworking, underserved consumers and has helped over 1.2 million people establish a FICO® score, providing a critical on-ramp to the formal financial system.

This mission is also a core part of its value proposition. Oportun claims its loans are, on average, "7 times less expensive" than alternatives like payday or pawn loans. This is based on a study commissioned by the Financial Health Network, which estimated that Oportun's members saved over $478 million in interest and fees in 2023 alone by choosing Oportun over those higher-cost options.

This model appears to resonate with its customer base, creating a competitive advantage built on loyalty. The company has a Net Promoter Score (NPS) of 76 for its personal loans. More impressively, the business is built on retention. As of the end of 2023, 82% of Oportun's entire loan portfolio value came from repeat customers. This isn't just a financial services company; for many of its members, it's a trusted financial partner.

The Pathward Partnership: A Critical Artery

A key to Oportun's national scale is its partnership with Pathward, N.A. Through this "Lending as a Service" model, Pathward, a bank, originates the loans that Oportun designs and services. This allows Oportun to operate in 38 states without needing to secure individual state-by-state licenses, a costly and time-consuming process.

The importance of this single partnership cannot be overstated. Pathward's share of Oportun's loan originations has grown from ~5% in 2022 to ~92% in 2024. While this represents a strategic success in achieving national scale, it also highlights a concentration risk, a point not lost on its critics.

The Omni-Channel Acquisition Machine

Oportun acquires its members through a diverse, multi-channel strategy that blends modern digital marketing with IRL community outreach.

Digital Channels: The Oportun Mobile App and website are the primary funnels, supported by paid and organic online advertising. A key digital channel has been its lead generation partnership with Credit Karma. This relationship highlights the interconnected nature of the fintech ecosystem, as Oportun's CEO, Raul Vazquez, also sits on the board of Intuit, Credit Karma's parent company. However, the scale of this partnership appears to have shifted. Payments from Oportun to Credit Karma have declined, from $8.9 million in 2022 to $1.6 million in 2023, and further to just $126,000 in 2024, indicating a de-emphasis of this channel as part of the company's evolving strategy.

Oportun’s 2023 10-K/A

Oportun’s 2024 10-K/A

Direct Marketing: The company actively uses direct mail, email, and SMS campaigns, and increased its spending on the direct mail channel by $3.5 million in 2024.

Physical Presence: Unlike many digital-only fintechs, Oportun maintains 128 retail locations for community-based outreach.

LaaS Partnerships: Beyond Pathward, Oportun has a lead generation program with partners like DolFinTech (at 491 retail locations) and has announced a new collaboration with Western Union, embedding itself in trusted community financial hubs.

This acquisition engine has become more efficient. Despite a decrease in total sales and marketing spend (from $75.3 million in 2023 to $67.0 million in 2024), Oportun’s Customer Acquisition Cost (CAC) fell 22.4% to just $125 in 2024.

The Activist's Case - Findell Capital's Accusations

Findell Capital’s case against the Oportun board is a direct criticism of its record, performance, and strategic judgment. The activist investor argues that the current board is responsible for the company’s poor stock performance, which has seen a -93% Total Shareholder Return (TSR) since its 2019 IPO. Findell believes the board has overseen financial performance and strategic blunders that have “led to a loss of more than $1.4 billion of stockholder value.” They assert that this outcome is the direct result of a "failed 'neobank' strategy" and a "lack of accountability" in the boardroom.

Here are Findell's key points:

Financial Underperformance: Findell points to three consecutive years of net losses.

• 2022 Net Loss: $77.7 million

• 2023 Net Loss: $180.0 million

• 2024 Net Loss: $78.7 million

Decrease in Value: The stock price has fallen under the current board's tenure. The market capitalization of stock held by non-affiliates decreased from approximately $137.7 million in mid-2023 to $72.1 million by mid-2024.

A Flawed "Fintech" Strategy: Findell’s central critique is that the board chased a strategy to transform Oportun from a focused lender into a diversified "neobank." The main example cited is the acquisition of the savings app, Digit.

• The Digit Acquisition: In what Findell calls a "costly strategic misstep," Oportun acquired Digit in November 2021 for approximately $212.9 million.

• The Impairment: Just a year later, in 2022, Oportun recorded a $108.5 million goodwill impairment charge on Digit, an admission that the asset was valued at less than half of what the company had paid for it.

Deteriorating Credit Quality: Findell argues that while management was focused on its fintech ambitions, discipline in the core lending business declined. They point to the company's Annualized Net Charge-Off Rate, which rose from 10.1% in 2022 to 12.2% in 2023, before ticking down to 12.0% in 2024.

A Controversial Strategic Recommendation: Remove the 36% Rate Cap: Perhaps Findell's most contentious argument is that Oportun should abandon its long-standing policy of capping all loan interest rates at 36% APR. Findell claims that "By capping their interest rates at 36%, OPRT has been unable to serve large swaths of customers who are forced to use more expensive alternatives." They point out that Oportun itself highlights that its competitors are substantially more expensive, implying Oportun could charge more and still be a better option.

Findell Capital - Opportunity at Oportun

However, this argument conflicts with a widely held view among regulators and consumer advocates. An APR of 36% is broadly considered the dividing line between affordable credit and predatory lending. The Military Lending Act (MLA), a cornerstone of federal consumer protection, codifies this by capping loans to service members at 36%. Leading advocacy groups like the National Consumer Law Center (NCLC) and the Center for Responsible Lending (CRL) define loans above this threshold as high-cost and harmful, trapping borrowers in cycles of debt. This standard is also reflected in the market; on Credit Karma, one of the largest loan marketplaces, it is difficult to find personal loan offers with APRs exceeding 35.99%. For Findell to advocate for crossing this line is a direct challenge to Oportun’s brand as a "responsible" lender.

Findell's goal is to reconstitute the Board of Directors with new, independent members who will provide effective oversight and refocus the company on its core lending business to "right the ship."

Oportun's Defense - The Turnaround is Working

Oportun's management doesn't deny the past challenges. Instead, they argue that they have recognized the issues, made the necessary decisions, and are executing a strategic turnaround that is yielding results. In their view, Findell’s campaign is a distraction that could derail this progress.

Management’s defense rests on a "Back to Basics" strategy with two main pillars:

Simplifying the Business: In an implicit admission that the diversification strategy was not successful, Oportun has unwound its non-core ventures.

• It sold its credit card portfolio in November 2024, describing it as a "key milestone towards our initiative to enhance profitability by simplifying the business."

• It has sunset other non-core products, including investing tools and partnerships like its arrangement with Sezzle.

"Workforce Optimization": The company has undertaken cost-cutting measures to right-size the organization and improve profitability.

• Corporate staff was reduced by approximately 40% in 2023 and another 12% in 2024.

• The total U.S.-based corporate headcount has been reduced from 875 employees at the end of 2022 to 361 at the end of 2024.

Management argues that these changes are already bearing fruit, pointing to several "bright spots" as proof that the turnaround is working.

Improved 2024 Performance:

• The net loss shrank from $180.0 million in 2023 to $78.7 million in 2024.

• Marketing efficiency improved, with the Customer Acquisition Cost (CAC) falling 22.4% to just $125.

Improving Credit Quality:

• The 30+ Day Delinquency Rate—a leading indicator of future loan losses—improved from 5.9% at the end of 2023 to 4.8% at the end of 2024.

You Be the Judge

The fight for Oportun's future presents two distinct narratives.

Findell's View: A board that presided over a decrease in value from a failed strategy and poor oversight cannot be trusted to fix the company. The recent "turnaround" is simply an admission of their prior failures. New, experienced oversight is required to restore discipline and shareholder trust.

Oportun's View: We have acknowledged the challenges, made a decisive strategic pivot back to our core strengths, and the positive results are now clear. Our customer loyalty remains strong, and our financial and credit metrics are moving in the right direction. A disruptive proxy fight now puts this progress at risk.

This leaves stakeholders with a difficult choice and several critical questions:

• Does Oportun's recent progress and strategic realignment prove the current board has learned from its mistakes and deserves the chance to see its plan through?

• Or, does the scale of past value destruction and the Digit misstep suggest that new oversight, as demanded by Findell, is essential to ensure future discipline?

• What is the right path forward for a company with a strong social mission but a troubled financial history?

The answer will determine not only the composition of Oportun's board but the very future of a company at the crossroads of mission and margin.

Appendix (Additional Sources)

6/23/25 - Oportun Issues Letter to Stockholders Detailing CEO Raul Vazquez’s Record of Proven Leadership - https://www.sec.gov/Archives/edgar/data/1538716/000119312525144755/d38779ddefa14a.htm

6/25/25 - Findell Capital Issues Rebuttal Presentation on Oportun Financial - https://www.sec.gov/Archives/edgar/data/1538716/000092189525001826/dfan14a13982002_06232025.htm

https://findell.s3.us-west-1.amazonaws.com/OPRT+Response+Presentation.pdf

6/18/25 - Oportun Releases Investor Presentation Highlighting Strategic Progress - https://cdn.prod.website-files.com/682f1c8d9e64348bd764a613/6852ea765b71cd9af49750ed_Oportun%20Financial%20Investor%20Presentation.pdf

6/16/25 - Findell Capital Releases Presentation on Oportun Financial - https://cdn.prod.website-files.com/6811d78a81ecf5002c312bfc/685060f9ad8c07f0328ac2c6_Findell-OPRT-Investor%20Presentation%20-%20FINAL.pdf

6/13/25 - Findell Capital Provides Facts in Response to Oportun’s Misleading Narrative - https://www.sec.gov/Archives/edgar/data/1538716/000092189525001760/dfan14a13982002_06132025.htm

6/12/25 - Oportun Lead Independent Director Neil Williams Issues Letter to Stockholders - https://www.sec.gov/Archives/edgar/data/1538716/000119312525140057/d65310ddefa14a.htm

6/5/25 - Findell Capital Management Spotlights Why Ginny Lee Should Not be Appointed Oportun's Next Lead Independent Director - https://www.sec.gov/Archives/edgar/data/1538716/000092189525001709/dfan14a13982002_06042025.htm

6/2/25 - Oportun Issues Letter to Stockholders and Mails Definitive Proxy Materials - https://www.sec.gov/Archives/edgar/data/1538716/000119312525133321/d19925ddefa14a.htm

6/2/25 - Important Update Regarding Annual Stockholder Meeting - https://www.sec.gov/Archives/edgar/data/1538716/000119312525133318/d900373ddefa14a.htm

5/29/25 - FINDELL CAPITAL PARTNERS, LP - https://www.sec.gov/Archives/edgar/data/1538716/000092189525001637/defc14a13982002_05292025.htm

5/28/25 - FORM l0-K - https://www.sec.gov/Archives/edgar/data/1538716/000119312525129577/d869078dars.pdf

Upstart, the AI-powered lending marketplace, hosted its first-ever “AI Day” on May 14 to outline how it's using machine learning to rethink credit underwriting. Executives highlighted Upstart’s vertically integrated AI model—trained on over 90 million datapoints—and emphasized its ability to deliver faster approvals and more accurate risk assessments. CEO Dave Girouard set ambitious 2025 goals, including a “10X” improvement in AI, a return to GAAP profitability, and building toward becoming the “everything store for credit.” The company also pointed to future revenue streams like subscriptions, revolving credit, and servicing. [Business Wire] [Upstart AI Day Presentation and Webcast]

A quick note from the Toaster Team:
As we get into Upstart's AI Day, we want to acknowledge something upfront. Some of you might approach Upstart's claims with a bit of healthy skepticism, perhaps based on past industry discussions or a feeling that their announcements can sometimes stretch enthusiasm. That’s an understandable perspective.

All that said, we're still intrigued by the scope of their aim and their willingness to put these details out there. That's why it's getting the spotlight in Toaster today.

A Look at Upstart’s AI Day: Insights for Fintech Marketers

Many company "AI Days" can often feel like marketing exercises, focusing more on potential than current demonstrable impact. Upstart's recent AI Day, however, offered a more detailed look into their strategy and operational metrics. Executives, including CEO Dave Girouard, CTO Paul Gu, CMO Chantal Rapport, and CFO Sanjay Datta, presented their approach, supported by specific figures that warrant attention from those involved in customer acquisition and building growth engines in the fintech space.

The core message wasn't just about future possibilities, but about how Upstart is currently applying AI to what they see as fundamental business levers: price, process, and distribution. Analysts from Bank of America, for instance, noted they "came away with a better understanding of [Upstart’s] differentiated model and its long-term vision."

Price and Process: Core Tenets of Upstart's Value Proposition

Upstart CEO Dave Girouard stated that consumers prioritize two main factors: the price of a loan and the ease of obtaining it. According to the company, AI allows them to address both. Chantal Rapport, SVP of Growth and CMO, reinforced this, stating Upstart's goal is to offer a "radically better product," defined as "best rates, it means best process, and it means a product that is available to everyone."

Upstart AI Day Presentation and Webcast

Price: Upstart indicates its underwriting models aim to reduce costs and credit losses. The company claims these models can result in a 36% reduction in APRs at comparable approval rates versus traditional methods. Rapport suggested that such differentiation can lead to "pricing power" and "positive selection," attracting lower-risk borrowers by offering competitive rates.

Process: Upstart reports that over 90% of its loans are fully automated. Girouard highlighted a statistic: each additional document requested can decrease the applicant pool by 15%. Streamlining these points, he suggested, can positively impact customer acquisition cost (CAC). Rapport described the Upstart borrowing experience as aiming to be simple, personalized, and "very, very fast," citing the "Upstart FastTrack" where 90% of personal loans are reportedly approved automatically without requiring paperwork.

Upstart AI Day Presentation and Webcast

Girouard characterized Upstart's approach as "improving access to credit" with a system less "archaic and dated" than traditional lending. Rapport added that the traditional lending space "hadn't been innovated on in decades" because effective lending is "extremely difficult to do it well."

AI's Role in Customer Acquisition Cost (CAC) Efficiency

Upstart claims a 50% reduction in CAC since 2019, alongside a 5x growth in customer numbers. The company attributes this not to increased marketing spend, but to improved funnel efficiency driven by AI. Factors cited include higher approval rates, reduced drop-offs due to a streamlined process, and more precise targeting. Girouard stated, “We’re not aiming for $0 CAC, we’re aiming for a bigger borrower base.” This suggests a strategy of investing where efficiency gains compound, referencing conversion improvements that reduced CAC despite significant growth (Q1'25 vs Q1'19). Rapport emphasized that "AI isn't just our moat, but it's also a constant accelerant for our business," contributing to efficiency, cost reduction, and margin improvement.

Upstart AI Day Presentation and Webcast

The Significance of Approval Rates

A key statistic highlighted by Upstart is that instantly approved loans convert three times more effectively than those requiring manual review. This suggests that delays in the approval process can significantly impact conversion volume. Upstart claims that a 1% improvement in model accuracy can lead to a 13% gain in conversion, a figure Rapport described as an "incredible return on our accuracy gains." Their reported conversion rate was trending upwards as of Q1 2025.

Cross-Selling as a Central Strategy

Upstart’s stated ambition is to become a comprehensive platform for various credit products, including personal loans, automotive retail and refinance loans, home equity lines of credit (HELOCs), and small-dollar "relief" loans.

Rapport provided insights into their existing user base relevant to this strategy:

• 76% of Upstart applicants own a car.

• 40% of applicants own homes.

• 30% of borrowers are likely to take out "a second personal loan" within 5 years.

Upstart AI Day Presentation and Webcast

The company notes that the CAC for a second loan to an existing customer is effectively $0. Rapport cited the "Fran" example: a customer who took a personal loan and subsequently refinanced her car through a personalized offer, saving $420 annually. This second loan was reportedly originated at "0% CAC." This product-led growth strategy focusing on existing users contributed to "almost 20X growth year over year" in auto refi, according to Rapport. Auto refinance volume was up 19x year-over-year as of Q1 2025, and their HELOC product is reportedly more than twice as fast as the industry average.

Rapport mentioned their home lending product is "twice as fast as the industry standard." She explained their auto refi strategy shifted from broad marketing to focusing on existing customers, allocating marketing budget "into the product, passed the savings onto the consumer."

Upstart AI Day Presentation and Webcast

Upstart AI Day Presentation and Webcast

Brand Building Through Product Delivery

Chantal Rapport discussed Upstart's aim to build a “category of one” business. She argued this is achievable if a company can consistently deliver better rates and a frictionless process. Rapport attributes this potential status to:

Proprietary AI and Deep Technology: Aiming for demonstrably better risk separation (what Paul Gu called an "incredible moat").

A Productized Marketplace for Capital: Described as an efficient, resilient, "many-to-many marketplace" with numerous diverse capital providers, intended to allow Upstart to be "scalable," "efficient," and "flexible."

A Strong Consumer Brand Built on Product Experience: Based on the trust of millions of users.

“And we believe that building a great brand doesn't come from just having a great Super Bowl commercial. Awareness is important, we'll also do that as we continue to build our brand. But ultimately, we believe a great brand, a generational brand, comes from having a fundamentally better product.”

  Chantal Rapport, SVP of Growth and CMO of Upstart

To Rapport, "a great brand, a generational brand, comes from having a fundamentally better product." This involves delivering "best rates," "best process," and making credit "available to everyone." The perceived ease of the process is presented as a key differentiator. Examples included the "Upstart FastTrack," being the only instant auto refinance product on the market ("a product that typically takes weeks to close"), and a home lending process "twice as fast as the industry standard." This speed, she noted, is "radically different" from common consumer expectations.

Upstart AI Day Presentation and Webcast

Upstart points to over 3 million borrowers served and tens of thousands of five-star reviews as evidence of product performance. Rapport highlighted that reviews often praise the speed, low rates, and competitiveness, suggesting this delivery builds brand trust.

Underlying Technology

CTO Paul Gu detailed the development of Upstart's vertically integrated AI model, trained on over 90 million datapoints (up from 65.7 million noted for 2024 and 43.8 million for 2023). He explained that the models incorporate techniques like proprietary loss functions, embeddings, and dynamic macro modeling to adapt to economic shifts and user behavior. Upstart claims its AI achieves 8x better risk separation than traditional models.

Funding, Partnerships, and Scalability

CFO Sanjay Datta highlighted improvements in funding resilience, with 65% of funding reportedly committed for 2025, compared to 0% in 2022. A new $1.2 billion forward flow agreement with Fortress was also mentioned as a factor in enabling scaling and preparing funding supply for growth, a stated priority for 2025. Rapport contrasted Upstart’s "many-to-many marketplace for our capital" with fintechs reliant on "one capital source," suggesting Upstart's model offers greater scalability, efficiency, and flexibility.

Partnerships, such as with Walmart’s OnePay to market lending products, are positioned as distribution engines.

And expanding these partnerships is particularly important to Upstart. As of March 31, 2025, there were two customers (Customer “A” and “B”) that accounted for 48% of their revenue. A material improvement from the year before, where 74% of revenue came from just 3 customers.

Upstart 10-Q

Future Outlook: Personalized, Always-On Credit

CEO Dave Girouard reiterated Upstart's vision to become the "'everything store for credit' in the 21st century," offering "always-on credit" for all Americans. Chantal Rapport described a similar future where credit for Upstart members is "always on, always available at the lowest cost of capital, for any loan you need...always available to you as an Upstart member in your pocket, and always priced with precision." CFO Sanjay Datta also indicated potential future revenue streams beyond fees, such as ratable fee revenue, subscriptions, revolving credit, and servicing.

Girouard’s stated goals for 2025 include making "giant leaps toward best rates, best process for all" and returning to GAAP profitability in the second half of the year. This signals a shift from primarily transactional conversions to building long-term customer relationships.

Key Takeaways for Marketers from Upstart's Presentation:

Funnel Efficiency: Emphasis was placed on how process friction (e.g., requesting an unnecessary document potentially causing a 15% drop-off) can compound CAC. Streamlining the user experience is key.

Approval Rate Impact: The claim that instantly approved loans convert 3x better highlights the importance of rapid, accurate decisioning. The metric of a 1% accuracy lift potentially yielding a 13% conversion gain was noted.

Cross-Sell Focus: Targeting existing customers for new products (like the $0 CAC example for a second loan) was presented as a highly efficient growth strategy.

Brand as a Product Outcome: The argument made was that brand strength is primarily derived from delivering on product promises (e.g., faster processes, competitive rates) rather than just marketing campaigns.

Strategic Distribution: Building scalable distribution, including via partnerships and a flexible capital model, is considered crucial.

Upstart's AI Day provided a look into their playbook. While their specific AI infrastructure (trained on over 90 million datapoints) and capital marketplace model may be unique, their strategic focus on the interplay of AI, capital structure, and brand built on product differentiation offers points for consideration. The discussion suggests a focus on marketing that is deeply integrated with operational realities and efficiency gains, rather than solely on surface-level campaign metrics.

We couldn’t produce this newsletter without our sponsor (and friends) at Spinwheel (a QED-backed fintech)

Reduce friction in your lending application with only two required fields: phone number and birthdate! Seamlessly access real-time credit data and payment processing, and watch your application rates jump by 20-30%. Get started today!

Click here to learn more

Housekeeping Note
We send a separate jobs edition every 1-2 weeks. You can always view it at thefreetoaster.com or, click here if you want to receive the jobs edition via email

Support The Free Toaster

About Us

Welcome to The Free Toaster! The newsletter for marketing pros at fintechs, banks, and lenders. 

Inspired by the free toasters banks used to give to each new customer, we’re here to help you acquire more customers at scale. We deliver fresh news, data, and insights to help you acquire more customers, minus the breadcrumbs.

Want to follow the authors on social media? Find Nick Madrid and Carlos Caro on LinkedIn.

Housekeeping Note
We send a separate jobs edition at the end of the week. You can always view it at thefreetoaster.com or, click here if you want to receive the jobs edition via email

Chime, the digital bank known for its no-fee consumer financial products, officially filed its IPO paperwork, revealing strong growth. Revenue soared to $1.67 billion in 2024, while losses shrank to just $25 million—down from $203 million in 2023. With $519 million already banked in Q1 2025, Chime looks poised to hit $2 billion this year and flirt with profitability. Investors may be circling, but the S-1 still leaves plenty of blanks, including share pricing and insider sell-offs. [TechCrunch] [BusinessWire] [S1 Filing]

/

Chime’s ARPAM Machine

Chime is not just a “neobank” or a slick app for the underbanked. It’s a $115 billion purchase volume engine (as of 2024), quietly eating the lunch of incumbent and regional banks, one direct deposit at a time. In fact, its 2024 purchase volume was surpassed by only five other U.S. debit card issuers.

But here’s the real play: Chime isn’t just winning on acquisition. They’re building a flywheel that systematically increases Average Revenue per Active Member (ARPAM)—and it’s not an accident. It’s the result of distribution-first thinking, relentless product attach, and a willingness to do the unsexy work that most fintechs ignore.

Let’s break down how the machine works—and why every fintech marketer should be taking notes.

The Chime Business: Facts and Figures

Chime’s core business is simple: capture your direct deposit, become your “top-of-wallet” card, and monetize the hell out of your everyday spend.

Interchange is the engine, at least for now.

In 2024, Chime processed $115.2 billion in purchase volume with 8.6 million active members. This payment-driven revenue, primarily interchange fees, accounted for 76% of total revenue in 2024 and 72% in Q1 2025. While debit cards drove the bulk of this volume (84% of Purchase Volume in Q1 2025), their strategic push for products like Credit Builder (its secured credit card) is critical.

S1 Filing

Although a smaller portion of volume (16% in Q1 2025), credit card transactions generate higher interchange rates and significantly impact revenue, with credit interchange (Credit Builder) making up 21% of revenue in Q1 2025. To put Credit Builder's impact in perspective, in 2024 alone, it generated $18.4 billion in Purchase Volume and $358.4 million in revenue.

Platform-related revenue is also growing, from 24% of total revenue in 2024 to 28% in Q1 2025.

S1 Filing

Data from S1 Filing

Data from S1 Filing

But the real story isn’t just the volume. It’s the depth of relationship with members.

Chime’s ARPAM hit $251 in Q1 2025—up a 6% average annualized growth rate (CAGR) since Q1 2022. Members who use six or more Chime products? They generate 1.8x the ARPAM and significantly higher purchase volume compared to the average member (as seen in Q1 2025).

This is the compounding effect of funnel efficiency and product attachment. Every step multiplies the next. Chime isn’t just acquiring users—they’re stacking products, data, and engagement to drive up ARPAM cohort after cohort.

S1 Filing

Customer Acquisition: The Referral Flywheel

Here’s where most fintechs get stuck: they spend a fortune on paid channels, then watch CAC spiral as they chase the same Google/Facebook audience as everyone else.

Chime’s approach is different. Since 2022, over half of new Active Members are acquired through organic and member-driven channels—word of mouth, referrals, and peer-to-peer payments via Pay Anyone. In 2024, referrals became Chime’s single largest acquisition channel. This organic pull is powerful: a 2024 survey showed Chime captured 17% of new or switching direct deposit relationships among adults earning up to $100,000.

Why does this work? Because Chime’s core product actually delivers on its promise: faster paychecks, no hidden fees, and real liquidity when you need it. 85% of new members who set up direct deposit came from an existing bank. 97% of members say Chime “unlocked their financial progress.” That’s not just marketing fluff—it’s the foundation of a viral loop.

And the economics show it. Acquisition cost per new Active Member was $109 in 2024 (just $91 excluding broader brand marketing), with payback in about 7 quarters for 2022 cohorts, and even faster for Q1 and Q2 2023 cohorts.

The kicker: members who use more products refer more new members. Those with six or more products referred 1.6x as many friends as the average. The product flywheel drives the referral flywheel, and vice versa.

Retention: The Compounding Game

Chime’s retention stats are the envy of the fintech world. Approximately 50% of Active Members are retained through their first year (for those active 2016-2023), and around 90% of those remaining Active Members continue each year thereafter. But the real magic is in the dollar retention: approximately 97% net dollar Purchase Volume retention and, crucially, an astounding ~104% net dollar transaction profit retention for the year ended March 31, 2025. This means retained customers are becoming more profitable over time.

Why so sticky? Because Chime is not a “sidecar” account. Once they get your direct deposit, they’re your primary bank. That means recurring, non-discretionary spend—food, gas, utilities—making up 70% of transactions. This isn’t the “cherry-picking” problem that kills most challenger banks. Chime is the hub, further evidenced by high engagement: Active Members interacted with the app 141 times per month in Q1 2025.

And as members stick around, they adopt more products. In March 2025, the average Active Member had 3.3 Chime products. The product attach rates speak volumes (as of March 2025): Debit Card at 90%, High Yield Savings at 69%, Pay Anyone at 54%, SpotMe at 49%, Credit Builder at 37%, and MyPay at 26%. The more products, the better the economics: higher ARPAM, higher retention, higher referral rates.

The ARPAM Engine: MyPay, SpotMe, Instant Loans

Let’s talk about how Chime actually drives ARPAM up and to the right.

MyPay 

Launched fully in July 2024, MyPay is instant earned wage access—get paid as soon as you clock out. By March 31, 2025, members had accessed $8.8 billion via MyPay. The attach rate hit 26% of Active Members using it monthly by March 2025. MyPay is a platform revenue monster, contributing $106 million to Chime's platform-related revenue growth in 2024. The economics? MyPay advances are typically repaid in under 14 days. While risk losses were below 1.75% of total dollars advanced from launch through Q1 2025, Chime noted that transaction and risk losses increased in Q3/Q4 2024 and Q1 2025 due to the full launch, contributing $54.2 million to this increase in Q1 2025 – a factor they are actively managing. Chime’s privileged repayment position (they see your paycheck first) lets them offer liquidity with minimal relative risk. That’s a moat.

SpotMe 

SpotMe is Chime’s “no fee overdraft”—but really, it’s a short-term liquidity product dressed up as a feature. Since its 2019 launch through March 31, 2025, members have accessed $43.3 billion through SpotMe. 49% of Active Members used it monthly in March 2025. It even includes "SpotMe Boosts," a community feature allowing members to temporarily increase each other's limits. SpotMe advances are typically repaid in under 7 days, with risk losses impressively held below 0.40% of total dollars overdrawn (from 2022 through Q1 2025). Members can even “tip” Chime for the service, which shows up as platform revenue. The kicker: SpotMe and MyPay aren’t just features—they’re ARPAM accelerators. They increase engagement, retention, and cross-sell. And because Chime sits on top of the paycheck, they can price risk tighter than almost anyone.

Instant Loans 

This is the next frontier. Instant Loans are small-dollar, short-term credit—think $100–$500, repaid on your next deposit. It’s asset-light (Chime’s bank partner, Bancorp, committed to retaining receivables and funding the loans), data-rich (Chime sees your income and spend in real time), and risk-managed (privileged repayment, short duration). As Chime scales Instant Loans, expect ARPAM to ratchet up even further. These products monetize the core distribution advantage—direct deposit—by layering on high-margin, high-attach products that competitors can’t easily copy.

Why Chime’s Model Works (and Most Don’t)

Chime is playing a different game than most fintechs. Here’s what sets them apart:

Distribution-first product design. They build for the channel (direct deposit, top-of-wallet), not for hypothetical “features.”

Funnel efficiency compounds. Every product attaches to the next, driving up ARPAM and lowering CAC via referrals. This is clear with an average of 3.3 products per active member and engagement like 141 app interactions per month.

Privileged data and repayment. Chime sees your paycheck, your spend, and your network. They can underwrite and cross-sell with an edge.

Unit economics at scale. 88% gross margin, 67% transaction margin, and the critical ~104% net dollar transaction profit retention. These are numbers most fintechs can only dream of.

Flywheel in motion. More products = higher ARPAM, higher retention, more referrals, more data, more products. The loop gets stronger every year.

The Takeaway for Fintech Marketers

If you’re building in fintech and you’re not thinking about ARPAM, you’re missing the plot. Chime’s model shows what happens when you align distribution, product, and data, then use that foundation to launch products that actually matter to your members.

The lesson isn’t “build another neobank.” It’s this: treat your acquisition channel like a living organism, build for deep product attach, and design every new feature to increase ARPAM, not just usage.

Chime’s not perfect, but they’re running the playbook at a level most fintechs haven’t even attempted. The opportunity is still huge—Chime targets an estimated $86 billion annual revenue opportunity with its current products for the 196 million Americans earning up to $100,000 annually, and they estimate they've penetrated less than 3% of this market. The product roadmap is just getting started.

If you’re not reverse engineering your ARPAM flywheel, you’re playing the wrong game.

Note: We’ve narrowed our analysis to things we know are important to fintech marketers. The newsletter Cautious Optimism also published a good piece on Chime today.

2nd note: A member of the Toaster team was a former Chime employee and owns equity in the company.

We couldn’t produce this newsletter without our sponsor (and friends) at Spinwheel (a QED-backed fintech)

Reduce friction in your lending application with only two required fields: phone number and birthdate! Seamlessly access real-time credit data and payment processing, and watch your application rates jump by 20-30%. Get started today!

Click here to learn more

Support The Free Toaster

• Need to improve application page conversions? Chat with Spinwheel

• Need to accelerate your affiliate marketing? Chat with New Market Growth

• Need to win on other growth channels? Chat with FIAT Growth

• None of the above? Share our Newsletter in your favorite Slack channel

About Us

Welcome to The Free Toaster! The newsletter for marketing pros at fintechs, banks, and lenders. 

Inspired by the free toasters banks used to give to each new customer, we’re here to help you acquire more customers at scale. We deliver fresh news, data, and insights to help you acquire more customers—minus the breadcrumbs.

Want to follow the authors on social media? Find Nick Madrid and Carlos Caro on LinkedIn.

Important: We are changing how we distribute our weekly jobs edition.

You can expect two editions per week.

There is no change to the news edition (what you’re reading now)

There is a change to our end-of-week Jobs edition.

1. Readers will need to opt in to receive the jobs edition via email.

2. Those who opt in will receive the edition a day before it’s published online.

Click here if you want to receive the jobs edition via email

Capital One is sticking to its growth game plan, even as economic clouds loom. The financial heavyweight reported a strong Q1 2025, with adjusted EPS of $4.06 beating J.P. Morgan’s estimate by a healthy margin. The quarter was buoyed by improved credit performance across the board—delinquencies (DQs) came in better than seasonal expectations, revolve rates remained below pre-pandemic levels, and payment behavior improved. Management flagged the consumer as a continued "source of strength," pointing to healthy job creation, real wage growth, and manageable debt servicing burdens. Still, the uptick in customers making minimum payments signals some stress brewing at the margins due to inflation and high interest rates​.

Spending trends added a bit of intrigue to the outlook. While card spending stayed stable through Q1, management highlighted a recent "uptick" in per-customer growth, fueled by seasonal factors like Easter and a run on electronics ahead of anticipated tariffs. Interestingly, this spending boost didn’t extend to Capital One’s small business portfolio, suggesting consumer resilience is more pronounced than business momentum right now. Management also reaffirmed its confidence in achieving synergies from the Discover merger, though the closing may now take six months longer than planned due to regulatory and integration timelines​.

On the credit side, improved metrics enabled Capital One to release reserves—$473 million from credit cards alone—although a more cautious macro outlook partially offset the impact. The baseline forecast, which assumes unemployment peaking at 4.3% and inflation hovering in the high 2% range, remains stable. However, the company has placed greater weight on a downside scenario involving higher unemployment and persistent inflation. Meanwhile, tariffs are already affecting behavior: consumers are rushing to buy autos before new duties hit, pushing up auction prices and prompting the company to stay aggressive in auto originations. Overall, the tone is clear—Capital One is still “leaning in,” but with a cautious eye on economic volatility​. [J.P. Morgan’s Research] [Capital One]

J.P. Morgan’s Research

The Capital One-Discover Merger

We tend to skip over payment news in this newsletter, but we felt this one was too important not to share. Erin McCune, a payments expert, notably pointed out two facts that are likely lost on most people:

• The acquisition unlocks the potential to leverage Discover's hidden global debit partnerships (like UnionPay, RuPay) into a more unified international payment system.

• Capital One gains the ability to create its own unique payment products and rules directly on the Discover network, offering a competitive advantage over issuers dependent on Visa/Mastercard.

For a readable background on the Capital One-Discover deal, Erin also cites two reports published by the International Center for Law & Economics.

• The Capital One-Discover Merger: A Law and Economics Analysis (July 2024)

• An Update on the Capital One-Discover Merger: Is There a Subprime Market for Credit Cards?

Both are worth reading, and it’s important to note that the combined Capital One-Discover entity would hold approximately 30% of subprime credit card balances. And the merger could actually benefit consumers with lower credit scores. This is because Capital One's sophisticated analytics can identify lower-risk individuals within this expanded group, potentially leading to better terms being offered.

Erin McCune on LinkedIn

We couldn’t produce this newsletter without our sponsor (and friends) at Spinwheel (a QED-backed fintech)

Reduce friction in your lending application with only two required fields: phone number and birthdate! Seamlessly access real-time credit data and payment processing, and watch your application rates jump by 20-30%. Get started today!

Click here to learn more

Simon Owens, a media industry expert, shares his thoughts on why “AI Overviews Reduce Clicks by 34.5%”

Linking to an Ahrefs article, AI Overviews Reduce Clicks by 34.5%, Simon shares why he’s not surprised by this fact.

Simon Owens on LinkedIn

And, for what it’s worth, Google’s AI Overview definitely hits home. A simple search of “what is the best credit card for travel” returns the Capital One Venture X Rewards Card. I’m sure some members of the Toaster community will have very strong views for and against this. Either way, apparently that’s what Google’s AI thinks, and if the Ahrefs article is true, it might not be as big of a deal as some would think.

Earnings

Brian Moynihan, Bank of America CEO: "We have a multifarious loan book across types of clients, geographies, and various asset classes. That holds us in good stead. In total, our consumer loans are down more than $200 billion, as home equity loans are down more than $125 billion and credit card loans -- unsecured credit card loans are down by more than $60 billion. This reflected a concentrated effort on us to focus on our relationship loans rather than loans as a product and deepen those relationships with the highest-quality prime credit customers." [Bank of America - Q1 2025]

Charlie Scharf, Wells Fargo CEO commented, “We produced solid results with diluted earnings per share increasing 16% from a year ago reflecting fee-based revenue growth across many of our core businesses, continued expense discipline, improved credit results, and an 8% reduction in diluted common shares as we continued to return capital to shareholders. I am excited about the momentum we are building across our businesses as we work to build one of the most respected financial institutions in the country.” [Wells Fargo - Q1 2025]

Jane Fraser, Citi CEO said, “With net income of $4.1 billion we delivered a strong quarter, marked by continued momentum, positive operating leverage and improved returns in each of our five businesses. [...] USPB was up 2%, driven mainly by growth in Branded Cards, and also saw improved returns. [...] We remain intently focused on executing our strategy, which is based on a diversified business mix and will perform in a wide variety of macro scenarios. When all is said and done, and longstanding trade imbalances and other structural shifts are behind us, the U.S. will still be the world’s leading economy, and the dollar will remain the reserve currency." [Citi - Q1 2025]

Michael Rhodes, Ally CEO: “Ally delivered solid first quarter results, reflecting continued momentum across our market-leading franchises – Dealer Financial Services, Deposits, and Corporate Finance.” [Ally - Q1 2025]

Brian Doubles, Synchrony President and CEO: “Synchrony delivered a strong first quarter 2025 performance, which reflected the inherent resilience of our diversified portfolio of products and spend categories and our differentiated approach to serving our customers and partners” [Synchrony - Q1 2025]

If this kind of stuff interests you, be sure to follow our friend Cole Gottlieb at Cross River who always does a great time at summarizing earnings as they come out.

Cole Gottlieb on LinkedIn

Exclusive Deal for Toaster Subscribers

Are you thinking about attending CardCon in May? Use promo code TOASTER to get $50 off the conference ticket.

Podcast: Colin Gardiner, Yonder Ventures

Carlos interviews Colin about the impact of AI on marketplaces, particularly those used by fintech lenders like Credit Karma and NerdWallet. Colin argues that agentic AI will shift marketplaces from a user-driven selection model to a proactive, AI-driven matching model, where the platform synthesizes vast data to make personalized recommendations and even execute transactions. While acknowledging the complexities in financial services due to eligibility and personalized pricing, Colin believes AI's ability to handle structured data and understand user context (like specific needs beyond just financial rewards) will overcome these hurdles.

They discuss how this shift disrupts traditional affiliate marketing, which relies on clicks and views, and favors authoritative brands and content creators who build trust and unique audiences. Colin advises niche brands to focus on building authority, creating unique structured data for LLMs, and developing targeted content strategies (like video for younger demographics) rather than relying solely on outdated performance marketing playbooks.

Colin stresses the need for organizational agility and investing in building unique assets or audiences, seeing "Marketplace Plus" models (combining marketplaces with SaaS, fintech, etc.) and embedded finance/insurance as key trends, while cautioning that aggregators without unique defensible assets are vulnerable to disruption by powerful LLMs like OpenAI's, which he believes will ultimately become proficient across various domains due to their scale and recursive learning.

Find the show here:

Spotify // Apple // Audible // Podbean // iHeart

Other stuff we’re reading and listening to

Support The Free Toaster

• Need to improve application page conversions? Chat with Spinwheel

• Need to accelerate your affiliate marketing? Chat with New Market Growth

• Need to win on other growth channels? Chat with FIAT Growth

• Attend CardCon (May 6-8) with discount code TOASTER. Register here

• None of the above? Share our Newsletter in your favorite Slack channel

About Us

Welcome to The Free Toaster! The newsletter for marketing pros at fintechs, banks, and lenders. 

Inspired by the free toasters banks used to give to each new customer, we’re here to help you acquire more customers at scale. We deliver fresh news, data, and insights to help you acquire more customers—minus the breadcrumbs.

Want to follow the authors on social media? Find Nick Madrid and Carlos Caro on LinkedIn.

Introduction

Klarna filed its F-1 late last week for its upcoming IPO, offering insights into one of the world's most recognizable fintech companies. This breakdown examines Klarna's business (with particular emphasis on the Klarna Card), market strategy, customer economics, financial performance, and future vision.

The Core Business

Key Numbers

• 93 million active consumers

• 675,000+ merchants across 26 countries

• $105 billion in gross merchandise volume (GMV) in 2024

• 99% of transactions were interest-free

• 76% of 2024 revenue came from Transaction and Service revenue

• 24% of 2024 revenue came from Interest Income

Klarna F1

“Our over 675,000 merchants include some of the largest global brands—on average, 44% of the top 100 merchants in each of the major markets we serve, which include the United States, the U.K., the Nordics, Germany, Austria, Belgium, Spain, France, Italy, the Netherlands and Switzerland (based on data from eCommDB and Digital Commerce 360) used Klarna in December 2024 to facilitate payments, while an even greater percentage (66%) advertised on our network in 2024.”

Klarna F1

Business Model

Klarna operates a hybrid network combining features of both open and closed payment systems. Like Visa and Mastercard, it connects a broad ecosystem of consumers and merchants. However, it also maintains a proprietary closed-loop network where it issues, funds, processes, and settles payments while maintaining direct relationships with consumers and merchants.

No single merchant represents more than 10% of Klarna's GMV in any major market, demonstrating their diversified revenue stream. In Sweden, their most mature market, approximately 82% of adults used Klarna in 2024.

Klarna F1

Payment Options

Klarna offers three main payment options:

1. Pay in Full: Settles transactions instantly

2. Pay Later: Allows consumers to defer payment to a later date or pay in installments

3. Fair Financing: Enables consumers to settle payments over longer periods

Klarna F1

Market Opportunity

Klarna estimates its serviceable addressable market (SAM) at $450 billion in payment revenue opportunities from $18 trillion in annual consumer retail and travel spending across its current markets. Global retail and travel spending, excluding China, was $30 trillion in 2023, offering significant expansion potential.

The company grew its advertising revenue from $13 million in 2020 to $180 million in 2024, tapping into the approximately $475 billion global digital advertising market (excluding China).

Klarna, a licensed bank in the EEA since 2017, held $9.5 billion in consumer deposits as of December 2024. This position positions it well with highly stable and lower-cost funds relative to other non-bank funding strategies, such as asset-backed financing.

Klarna Card Strategy

Vision

"Klarna Card in Every Wallet"

Klarna aims to become the default payment method for its millions of active consumers by offering flexible payment options both online and offline.

Competitive Advantages

1. Broad Acceptance: Klarna Card integrates with Apple Pay and Google Pay, expanding its reach without requiring direct merchant integration.

2. Banking License: With its banking license, 94% of Klarna's lending is funded through stable, low-cost consumer deposits, giving it an edge over traditional asset-backed funding models. Klarna also partners with to offer their Fair Financing product in the United States.

3. AI-Driven Underwriting: Klarna uses sophisticated AI to approve credit in real time, adjusting credit limits dynamically based on user behavior to minimize risk.

“Klarna enjoys powerful network effects. Our personalized, highly engaging consumer experiences drive consumers to our network. As more consumers engage at scale, more merchants join our network and grow their businesses. As more merchants join the network, consumers benefit from increased selection across verticals, channels and geographies, and can purchase more frequently using, and demonstrate preference for, our network. Klarna has established a high-utility, high-frequency model, enabling the purchase of everyday goods and services that benefits both our consumers and merchants.”

Klarna F1

Credit Underwriting Capabilities

Klarna's credit underwriting is powered by proprietary data from approximately 2.9 million daily transactions across its 93 million active consumers.

Key features include:

• Fully automated underwriting decisions made in seconds

• Real-time transaction assessment

• Gradual credit limit increases based on responsible spending

• Clear repayment terms encouraging on-time payments

This results in:

• The average balance per active consumer is just $87 (compared to $6,730 for U.S. credit cards)

• Average loan duration of 40 days (versus 5+ years for a typical Nordic bank loan and an average of 2.9 years for a typical US personal bank loan)

• Consumer credit losses were 0.47% of GMV in 2024, down from 0.66% in 2022 but up from 0.38% in 2023.

• Credit losses were lower in mature markets at less than 0.20% of GMV.

• The overall increase from 2023 to 2024 was due to a larger share of GMV from the earlier-stage U.S. market and an increased use of the Fair Financing product.

“In the second half of 2022, we implemented a strategic initiative to adjust our underwriting standards in an effort to improve the overall credit quality of our portfolio. The initiative was driven by our strategic recalibration to a more balanced growth and shift towards profitability. These changes included updates to our credit underwriting decision framework, such as launching new risk models to manage risk return trade-off in line with our profitability targets for 2023, including first-generation new-consumer-level risk models, targeted risk-based down-payment policies, updating decline thresholds following the new model implementation and adjusting our risk-based pricing policies for our consumer loans to drive a higher yield on the portfolio. In particular, we increased the number of consumers that were required to make a down payment in order to take advantage of our financing products. We also increased the average amount of such down payment based on our updated credit risk models, historical delinquency behavior and information from credit bureaus. As a result, in the fourth quarter of 2023, our credit portfolio comprised loans extended to consumers with either a well-established repayment history with Klarna or a repayment behavior similar to our existing well-performing customer base. Consequently, in 2024, our consumer credit losses represented 0.47% of total GMV.”

Klarna F1

Customer Acquisition Strategy

Klarna acquires users primarily through:

• Direct merchant integrations

• Partnerships with Payment Service Providers (PSPs), think Worldpay, Stripe, and Adyen

This approach significantly reduces customer acquisition costs compared to traditional financial institutions.

By the end of 2024, Klarna had built a global consumer base of 93 million active users and achieved 41% global brand awareness, outperforming peers with an average of 29%.

Klarna F1

Financial Performance

Revenue & Growth

Klarna's revenue comes primarily from merchant fees rather than consumer interest, aligning its incentives with merchant growth. The company periodically updates its risk model to align with strategic objectives.

In 2019, Klarna expanded into the US and 12 additional markets over the next three years. This higher risk appetite led to rapid GMV growth and increased credit losses.

In mid-2022, the company strategically shifted toward profitability by implementing stricter risk management measures, including risk-based down payments, tighter debt limits, and accelerated collections processes.

These changes and improved underwriting capabilities significantly reduced US market credit losses from 3.6% of GMV in 2021 to just 1% in 2024 while maintaining 15% GMV growth during this period.

2024 Results

• $105 billion GMV, up 14% year-over-year

• $2.8 billion revenue, up 24% year-over-year

• $181 million adjusted operating profit, a 466% improvement

• $1.22 billion in transaction margin dollars up 12% year-over-year

  • Transaction margin dollars are defined as total revenue less total transaction costs, which consist of processing and servicing costs, consumer credit losses and funding costs

• $21 million net profit, a 109% improvement from a $244 million loss in 2023

Klarna F1

Klarna F1

Network Structure

Klarna has built a network that directly connects consumers and merchants, reducing reliance on traditional card networks and issuing banks. This provides:

1. Better data collection (2.5 billion SKU-level data points in 2024)

2. Improved understanding of consumer preferences

3. More accurate credit underwriting

4. Clearer insights into consumer purchasing power

5. Cost advantages compared to traditional providers

Future Vision

Klarna aims to expand its card business to become the default payment choice for consumers in both online and offline transactions. Key strategies include:

1. Deepening integration with Payment Service Providers

2. Expanding into new verticals like groceries, travel, and entertainment

3. Increasing everyday spending capture

4. Enhancing consumer engagement through AI-driven personalized financial services

Key Risks

Payment Ecosystem Dependencies

Klarna collaborates with card networks, PSPs, and other participants in the payment ecosystem. Any disruption in these relationships could adversely affect its business.

The company derives substantial merchant revenue through Merchant of Record (MoR) partners like Adyen and Stripe. These partnerships allow Klarna to reach many merchants without direct integration but create dependency risks.

Funding Model Challenges

While Klarna funded 94% of its lending through consumer deposits in 2024, it faces potential risks:

1. Market volatility affecting deposit stability

2. Increasing funding costs due to rising interest rates

3. Dependency on maintaining an investment-grade credit rating

4. Potential difficulties in renewing or replacing existing funding arrangements

Competitive Landscape

Klarna faces intense competition from multiple fronts:

• Traditional credit and debit card issuers (JP Morgan, Citibank, HSBC)

• Payment networks (Visa, Mastercard, American Express)

• Digital-focused banks (Revolut, NuBank)

• "Buy now, pay later" solutions (Affirm, AfterPay)

• E-commerce platforms with integrated payment capabilities (Shopify, Amazon, Walmart)

Many competitors have advantages, including:

• More diversified product offerings

• Broader consumer and merchant bases

• Ability to cross-sell products

• Operational synergies

• Cross-subsidization capabilities

• Lower funding costs

Conclusion

Klarna is positioning itself as more than just a payment option. It's building a comprehensive platform connecting consumers and merchants through a data-driven, AI-enhanced commerce network. The Klarna Card is central to this vision, serving as a core growth driver and a primary means of deepening consumer engagement.

Will Klarna's unique blend of banking, payments, and AI redefine fintech—or is it too dependent on favorable market conditions? Only time will tell. Until then, congrats to the Klarna team!

If you’ve spent any time in the fintech lending space, you already know that affiliate marketing is one of the biggest growth levers out there. Lenders are spending $4B-$6B per year acquiring customers through Credit Karma, LendingTree, Experian, and others. It’s efficient. It’s targeted. It scales.

But what if I told you that the only other marketing channel that consistently rivals affiliate marketing for customer acquisition volume is…direct mail?

Sounds counterintuitive, right? Especially if you’re coming from the digital world, where campaigns are launched in hours, A/B tests are run in real-time, and data flows in instantly. Meanwhile, direct mail is old-school, slow, and operationally complex.

And yet—lenders keep sending billions of pieces of mail every year (they do it because it works).

Some claim direct mail is a dying channel. But, the important question is whether it can drive ROI for your business today at scale. And the answer to that is yes (even if it might be slowly declining YoY).

The Scale of Direct Mail in Lending

Let’s start with some numbers:

• Last year, consumer lenders sent 6 billion pieces of direct mail

• About half of that (3 billion pieces) was for credit cards. Another 1.5 billion was for personal loans

• In total, lenders spent $3 billion on direct mail campaigns

Lenders like Capital One, Chase, and Amex are pumping money into this channel because it delivers incremental customers. And if it can deliver incrementally for them - on top of a broad mix of other channels - it can deliver for your fintech, too.

Direct Mail vs. Affiliate Marketing

Here’s what makes direct mail a perfect complement to affiliate marketing:

• Affiliate marketing focuses on demand capture. It finds the hand-raisers, consumers actively searching for credit products, clicking on offers, and comparing options.

• Direct mail focuses on demand generation. Lenders use credit bureau data to pre-screen and target the highest-intent customers, even if they weren’t actively on the market.

When done right, these two channels can work together in a powerful way.

I’ve had more than one lender tell me their affiliate volumes went up when their direct mail campaigns were in market. That’s because the mail piece created a memorable impression of the product (or the brand) which led to higher response rates for the mail-sender when the consumer shopped in the affiliate marketplaces.

Source: The Free Toaster, based on our Podcast with Rich Walker

Why More Digital Marketers Should Pay Attention to Direct Mail

If direct mail is so effective, why don’t more fintech lenders start there? Simple:

1. It’s expensive. A single piece of direct mail costs around $0.50 to produce and send. That’s a $500 CPM—far higher than digital channels.

2. It’s slow. Unlike digital campaigns that launch in minutes, direct mail takes weeks to produce, send, and analyze.

3. It’s operationally complex. You need to work with letter shops, navigate USPS logistics, and comply with strict regulatory requirements (thanks to the Fair Credit Reporting Act).

But here’s the thing: once a lender gets direct mail working, it scales like nothing else.

For early-stage fintechs, the playbook usually looks like this:

1. Kickoff affiliate marketing—the largest digital channel for lenders.

2. Expand to search and social—fast, easy, and familiar, but limited in scale.

3. Layer in direct mail—high initial friction, but once optimized, it becomes a workhorse for long-term, efficient customer growth.

This is why you see fintech lenders—companies that started as digital-first—eventually adopting direct mail as a core channel. It’s not about replacing digital, but about stacking channels together for maximum efficiency.

The Economics of Direct Mail

Let’s break it down:

• The cost of a direct mail piece is ~$0.50.

• A high-performing lender can expect a 1% response rate (i.e., 1 out of 100 recipients will respond).

• Approval rates are closer to 70%, meaning for every 10,000 pieces mailed ($5,000 spend), they’ll book 70 new loans.

Now, let’s compare that to an affiliate campaign:

• Affiliate cost-per-funded-loan (CPFL) often ranges between $100-$300.

• Direct mail CPFL can be in that same ballpark—sometimes lower, sometimes higher, depending on the lender’s underwriting and pricing strategy.

This is why lenders love direct mail—it’s predictable. Once they’ve optimized their models, they can pour money into it at scale with very little incremental lift required.

What This Means for Fintech Lenders

If you’re running growth at a fintech lender and you’re not exploring direct mail, you’re leaving money on the table.

Yes, it’s hard to setup initially. Yes, it’s expensive. Yes, it’s slow.

But guess what? It drives the right CAC at scale and that’s exactly why the biggest players keep using it.

Direct mail isn’t a channel where a half-baked attempt will unlock the channel. You have to commit to iterating and spending 9-18 months heads down before it “works”.

Once you crack the code, ramp up to millions of pieces per month.

And if you’re already deep in affiliate marketing? Even better. You’ve likely got the credit-based targeting skills needed to win in direct mail.

Smart fintech lenders are playing both sides of the game—capturing demand with affiliates while creating demand with direct mail. That’s a winning formula.

Ready to Get Direct Mail Into Market?

Email carlos@ghostmode.co with subject line “Direct Mail” and we’ll send you a (proven) 6-step guide on how to launch a Direct Mail program (based on Rich Walker’s suggestions from the Podcast).

Or, check out the conversation on The Free Toaster Podcast: Spotify // Apple // Audible // Podbean // iHeart

About Us

Welcome to The Free Toaster! The newsletter for marketing pros at fintechs, banks, and lenders. 

Inspired by the free toasters banks used to give to each new customer, we’re here to help you acquire more customers at scale. We deliver fresh news, data, and insights to help you acquire more customers—minus the breadcrumbs.

Want to follow the authors on social media? Find Nick Madrid and Carlos Caro on LinkedIn.

Rich Walker is a 35-year industry vet who’s been responsible for over 10 billion pieces of Direct Mail.

Rich has led direct marketing teams at Capital One, the Winterberry Group, Deluxe Corporation, and 2nd Order Solutions. Currently, he works on growth at Aven.

So we jumped at the opportunity to get his take on how lenders can leverage Direct Mail to grow their customer acquisition programs.

Find the show here:

Spotify // Apple // Audible // Podbean // iHeart

1/ Why Direct Mail still matters 

Consumer lenders spend $3B per year on 6B mail pieces, and the power of pre-screened marketing. Thanks to the Fair Credit Reporting Act (FCRA), you can “pull” certain consumers’ credit data at the marketing stage (without permission) and decide exactly who qualifies before you send the offer.

You’re hitting people who are not actively shopping, but who are already qualified for a loan. That’s key. It’s the opposite of affiliate. In affiliate, they’re in-market and raising their hand. With mail, you can find them first.

  Rich Walker

2/ Who should explore Direct Mail

Rich sees two broad categories of lenders that should be investing in direct mail:

1. Lenders with low LTV, but high response (low dollar subprime)

2. Lender with high LTC, but low response (high end prime cards, mortgages, etc)

If you’re new to lending altogether, direct mail might be a challenging first step. The best scenario is a lender who already has an underwriting model—something that sets FICO or risk thresholds, clarifies who is profitable to serve, and codifies that knowledge into a function or an algorithm.

You’d be surprised how many times I meet a fintech that wants to do direct mail but doesn’t really have a risk model. You need one. Mail is so expensive, you have to cut precisely—only the pockets that make you money.

  Rich Walker

3/ Direct Mail vs. affiliate marketing

Affiliate marketing captures consumers who are already in-market. They go to aggregator or comparison sites, raise their hand, and say, “I want a loan.” That allows lenders to pay on a cost-per-acquisition (CPA) basis, without knowing who might respond.

But the trade-off is control.

In direct mail, you decide exactly who gets your offer—and you can hit them before they start shopping on aggregator sites. But, if your response model isn’t calibrated, your CACs could go much higher than expected.

4/ Unit economics

A piece of consumer-lending direct mail (one envelope, one letter) costs about 50 cents end-to-end:

• Postage (~60%): Typically in the low 30-cent range, depending on volume and where it’s injected into the USPS system. There’s no vendor markup on postage—just a pass-through from the printer to the Postal Service.

• Data (~20%): You purchase the list from a credit bureau (or a reseller). Pricing varies based on volume, the specific data you request, and the bureau’s own fee structure.

• Printing/Inserting (~20%): Your “letter shop” or “mail house” charges you for the paper, ink, equipment run time, and finishing.

Naturally, if you’re testing small volumes early on—say 50,000 pieces vs. a million—you might see costs creep from 50 cents closer to 70–75 cents. But once you surpass a quarter-million pieces per run, unit costs begin leveling out.

5/ The mechanics of a campaign

A typical GTM motion:

1. Assemble Targeting Criteria: You define broad credit criteria (states, FICO range, existing tradelines, etc.).

2. Pull Bureau List: The bureau or reseller sends you the list of names that pass your risk and response criteria.

3. Develop Creative: Envelope design, letter copy, brand touches, invitation codes, vanity URLs, or QR codes.

4. Letter Shop Fulfillment: The printer physically prints letters and envelopes, personalizes them with your list’s PII (name, address, invitation code), then sorts them in ZIP order or deeper.

5. USPS Delivery: Typically 1–2 weeks from final print to the consumer’s mailbox, plus an additional 1–2 weeks of response tail to see final performance.

All told, one “test and learn” cycle can span 6–8 weeks. Compare that to the near-instant feedback loops of digital marketing, and you’ll see why mail requires a different cultural mindset.

6/ In-source or outsource?

• In-House: Large lenders often keep the analytics, risk modeling, and segmentations in house. They may have direct relationships with bureaus and letter shops, and dedicated staff who handle each monthly “drop.”

• Full-Service Outsource: For smaller or newer lenders, it may be easier to rely on specialized consultants who already have established bureau relationships, letter shop partners, and prebuilt campaign management tools.

Mail runs in cycles. You’ll have a super-busy ‘hell week’ where you finalize your drop. Then you’ll have downtime while results roll in. For a lot of organizations, that’s easier to outsource.

  Rich Walker

7/ Optimizing the 3 big levers

The mailing list, the offer, and the creative. Rich discusses the big questions you need to think about to nail all 3.

Mail is the ultimate test of your underwriting. You can push as hard or as soft as you want on your credit model. Want more volume at higher CAC? Loosen your thresholds. Need to tighten up? Move the cutoff the other way.

  Rich Walker

Additionally, we cover attribution, the future of direct mail, and much more.

Find the show here:

Spotify // Apple // Audible // Podbean // iHeart

About Us

Welcome to The Free Toaster! The newsletter for marketing pros at fintechs, banks, and lenders. 

Inspired by the free toasters banks used to give to each new customer, we’re here to help you acquire more customers at scale. We deliver fresh news, data, and insights to help you acquire more customers—minus the breadcrumbs.

Want to follow the authors on social media? Find Nick Madrid and Carlos Caro on LinkedIn.

Support us by sharing our content with your colleagues or on social media.

NerdWallet announced earnings on Tuesday. In Wednesday’s trading, their stock (NRDS) was up 33%. Clearly investors liked what they heard.

Here’s how they summarized their quarter:

Source: Q3 2024 Shareholder Letter

They unpacked their revenues by business unit:

Source: Q3 2024 Shareholder Letter

Credit Cards

The NerdWallet team pointed to tighter lender conditions as the source of their 16% YoY decline.

Data from the St. Louis Fed confirms that story.

Source: St. Louis Fed

While the St. Louis Fed hasn't posted Q3 2024 numbers yet, their data shows that Q2 2023 origination volume (for large banks) was 19.65MM cards, while Q2 2024 was 17.63MM cards. That’s a 10% decline, roughly in line with NerdWallet’s YoY drop.

NerdWallet’s best Q3 for credit card (on public record) is Q3 2022, when they delivered $57.4MM in revenue. So this most recent quarter is a 21% decline from their 2-year ago peak in cards. That’s a bigger decline than what we’d expect from the St. Louis’ Fed macro data, which shows a 10% decline in large bank origination volume from Q2 2022 to Q2 2024.

Zooming up for a second, if you’re an affiliate marketer, you probably care about two things:

1. Is the channel growing?

2. What percentage of new cards originate through this channel?

Based on the data above, it seems like in the last two years the channel has been slightly lagging the pace of account origination in the industry, per the St. Louis Fed data.

To answer the second question, we have to make an assumption about NerdWallet’s revenue per transaction.

Their business skews upmarket, so I’d guess their average revenue per transaction (RPT) in the $200 - $350 range. Based on their Q3 2024 revenues, here’s a range of possible origination volumes per month:

Implied Transactions For $45.3MM / Qtr Card Business

Assumed RPT

Originations in Q3 ‘24

Originations / Month

$200

226,500

75,500

$250

181,200

60,400

$300

151,000

50,333

$350

129,429

43,143

So, on the high end of this range (226K originations per quarter), NerdWallet has a more than 1% market share of all large bank credit card originations (assuming their partner base is mostly large banks).

If we further assume that 5%-10% of new large bank credit card originations come from affiliate channels like NerdWallet (Credit Karma, Experian, Bankrate, The Points Guy, etc), that suggests that NerdWallet captures 10%-20% of the affiliate channel market.

With this kind of scale, it makes sense for prime card issuers to fight for their piece of this marketplace.

Other Facts And Figures

• Q3 ‘24 Monthly Unique Users are at 22MM, down 7% YoY due to “broad organic traffic pressure.”

• “Personal loans declined 49% year-over-year, as high loan rates continued to depress consumer demand and underwriting remained tight.”

• “Emerging verticals revenue increased 129% year-over-year to $94 million in Q3”, led by auto insurance.

• Closed the acquisition of Next Door Lending, a mortgage brokerage. Leadership expects the deal to “contribute approximately 1 to 2 percentage points of growth to our Q4 2024 revenue outlook.”

• NerdWallet’s Podcast — Smart Money — has scaled to 250,000 average downloads per month.

• CFO Lauren StClair who joined NerdWallet in November 2020 to lead the IPO, will be leaving the company in March 2025.

Closing Thoughts

NerdWallet’s great quarter (per the NRDS stock’s reaction) was driven by a material increase in their (auto) insurance business.

From a bank marketer’s perspective, the credit card and loans performance makes me wonder how they’ll re-establish a growth position in these businesses. They didn’t articulate (in my opinion) a clear strategy on how they’ll address the organic search headwinds they’re seeing.

Additionally, I don’t see NerdWallet as active in targeted marketing (like Credit Karma’s Lightbox, Experian’s Activate, and MoneyLion’s Spark), making me wonder how efficient their ads business will be over time relative to other affiliates marketplaces.

Zooming up, they have a terrific consumer brand and the “content DNA” to be able to navigate their way through the organic search headwinds, by leaning into other media properties like their Smart Money Podcast.

Given their scale in prime lending, bank marketers who compete in affiliates can’t ignore this channel, but their growth prospects (in the consumer lending category) are less certain given their organic search challenges and competitors that are doubling down on targeting platforms that make their ads more efficient.

One last note: You may be wondering if this article is an endorsement of NerdWallet as an affiliate marketing channel for lenders. The best way to answer that is with my actions: I recommend NerdWallet to my prime lender clients at New Market Growth because of (1) their scale in the market, (2) the strength of their brand and quality of their content, and (3) their consumer-first mission of “Provid[ing] clarity for all of life’s financial decisions.”

Disclosure: This article is for informational purposes only. Nothing contained herein constitutes business or investment advice, or the recommendation of or an offer to sell, or the solicitation of an offer to buy or invest in any investment product, vehicle, service or instrument.

Welcome to The Free Toaster!
We’re dishing out a free newsletter for marketing pros at banks and lenders. Inspired by the free toasters banks used to hand out to each new customer, we’re here to help you acquire more customers at scale. We deliver fresh news, data, and insights to help you acquire more customers—minus the breadcrumbs.

The One Takeaway

In this edition, we dive into a podcast that demystifies affiliate marketing—a high-stakes but complex channel banks and lenders use to supercharge customer growth. It’s a bit like direct mail with a twist, requiring deep analytics and a responsive team to succeed. With billions moving through affiliate networks annually, execs need a nimble, metrics-driven strategy to stay ahead. The bottom line is that affiliate marketing can be a goldmine if you play it smart and know how to adapt.

News

(10/14) SoFi signed a $2 billion agreement with Fortress Investment Group to expand its loan platform business, which connects pre-qualified borrowers with lenders and originates loans for third parties. CEO Anthony Noto highlighted SoFi's strategy, saying, “SoFi’s loan platform business is an important part of our strategy to serve the financial needs of more members and diversify toward less capital-intensive and more fee-based sources of revenue.” Fortress sees this as a prime investment opportunity, building on its extensive experience in consumer credit financing. [Business Wire]

(10/14) Barclays will take over from Goldman Sachs as the exclusive U.S. issuer of General Motors’ credit cards next summer. The new GM Rewards Mastercard and GM Business Mastercard will offer perks redeemable across the automaker’s vehicle lineup, including its EV portfolio. As Goldman pulls back from consumer banking, Barclays aims to grow its U.S. credit card market presence through this deal. GM, the top U.S. automaker, plans to use these cards to strengthen customer loyalty with unique rewards and boost engagement as it advances its EV strategy. [Business Wire] [BankingDive]

(10/10) Blue Owl Capital is partnering with Upstart to boost consumer credit access, committing to buy up to $2 billion in loans through the AI-driven Upstart platform over the next 18 months. The partnership launched with an initial $290 million loan purchase in September, making it one of Upstart’s largest agreements. “Blue Owl’s ambitious vision and long-term focus will accelerate our efforts to expand access to affordable credit,” said Sanjay Datta, Upstart’s CFO.[Upstart]

(10/9) LendingClub and Pagaya jointly acquired the intellectual property of Tally Technologies, a now-defunct fintech that developed tools for managing credit card debt. LendingClub aims to integrate Tally’s technology into its member platform to help consumers tackle debt amid high interest rates, while Pagaya plans to enhance its credit management solutions for B2B partners. This acquisition came after Tally closed in August after struggling to secure more funding. [Pymnts]

(10/9) SoFi launched two new credit cards to broaden its appeal: the SoFi Everyday Cash Rewards Card and SoFi Essential Credit Card. The Everyday Cash Rewards Card offers up to 3% cash back on dining and 2% on groceries, while the Essential Card is designed for people looking to build credit, with no surprise fees. SoFi aims to provide flexible, member-focused options that enhance financial independence and loyalty across its nearly 9 million members. In July, the company announced they were only piloting these cards by invitation. [Business Wire]

(10/7) Plaid has introduced a new cash flow underwriting tool that pairs its Layer onboarding platform with Consumer Report, allowing lenders to get a fuller picture of applicants’ financial health by incorporating real-time cash flow data. This setup lets lenders review verified income, expenses, and bank balances right from the start of loan applications, simplifying the process. Partnering with MoneyLion, Plaid’s tool supports loan pre-qualification for 17 million users, giving underserved consumers with limited credit histories a chance to be considered. This approach streamlines lending and opens doors to more inclusive financial opportunities. [Plaid Blog]
note: we wrote about our concerns with Cash Flow Underwriting here

(10/7) In a podcast interview, Supriya Gupta, Credit Karma’s VP of Product, discussed how the company leverages AI-driven personalization to tailor financial advice to individual users. Credit Karma aims to use generative AI and predictive analytics as a proactive "financial assistant," helping members anticipate issues like cash flow shortfalls and make better financial decisions. Focusing on each user as a “segment of one,” Credit Karma aims to build trust and provide hyper-personalized guidance based on comprehensive data. [AI in Financial Services Podcast]

(10/1) With the Fed’s recent rate cut, CFO Michael Linford noted that Affirm might pass along savings to consumers through more 0% interest offers or lower APRs—though these perks will likely take one to two years to materialize. Affirm plans to leverage these rate cuts to boost spending, benefiting consumers and merchants while being cautious in response to ongoing economic uncertainties, particularly around employment. Analysts are optimistic, predicting improved profitability as Affirm’s transaction costs decline. [Payments Dive]

Interviews of Interest

Depending on the week, we’ll publish our own interviews with industry experts or spotlight other interviews we find interesting.

Carlos breaks down the complexities of this often complicated and high-stakes channel. He emphasizes that affiliate marketing can be a successful way to acquire profitable customers at scale.

It’s often compared to the direct mail channel for its precise targeting capabilities.

It’s a must-listen for marketing heads, product managers, and execs looking to harness affiliate channels for sustainable growth.

Carlos aims to answer the following core questions in the first nine episodes:

E1 - Why is affiliate marketing a smart move for lenders?
E2 - What’s the secret to success in competitive affiliate marketplaces?
E3 - Why is affiliate marketing a scalable way to acquire customers?
E4 - How can lenders expand affiliate reach for serious growth?
E5 - What are the key levers for optimizing affiliate performance?
E6 - How can lenders assess and boost their affiliate program’s maturity?
E7 - What does a fully mature affiliate program look like?
E8 - What obstacles hold back affiliate growth, and how can lenders overcome them?
E9 - How should lenders measure success to maximize affiliate value?

For anyone new to affiliate marketing, the big question is: how big is this opportunity, and is it really worth it?

And Carlos gets this question all the time.

$3B to $4B per year - That’s the amount of money consumer lenders are spending across the largest six affiliate marketplaces.

Carlos estimates that six major consumer lending affiliates, including Credit Karma, Experian, and NerdWallet, generate approximately $6 billion in annual revenue. He estimates a majority of that total revenue comes from the affiliate program: “consumer lenders are spending around $3B to $4B billion per year across just these six affiliate marketing channels.”

He suggests this figure is considerably higher when the smaller affiliate players are included: "I wouldn’t be surprised if you end up landing in $5, $6, $7 billion per year in affiliate marketing spend going to these publishers... But I think $5 to $7 billion is a conservative take on what the real answer is."​

Of course, one newsletter can’t capture all the insights packed into these episodes—but we’re here to spotlight some important takeaways.

Seven Levers Framework: Carlos introduces a structured framework for optimizing affiliate marketing channels by managing seven critical performance levers: eligibility, impressions, click-through rate (CTR), application rate, approval rate, funding rate, and Cost Per Acquisition (CPA). He explains that each lever represents a distinct step in the funnel, and collectively, they impact overall program efficiency and growth. By actively monitoring and improving each category, lenders can better control conversion quality, adjust strategies to partner needs, and enhance program outcomes.

Affiliate Economics and Priorities: Affiliates rank and distribute ads in multiple ways. And their approach could vary by placements on their sites. However, the most actionable assumption is that they optimize revenue per impression or click. That keeps lenders focused on product appeal, application flow, and overall conversion rates to maintain a competitive position on affiliate sites.

Performance-Based Model: Affiliate marketing for lenders is structured on performance, where payments are tied directly to approved conversions rather than impressions or clicks alone. While this is not universally true, it applies in the majority of cases.

Advanced Targeting Models: He discusses targeting models like Credit Karma’s Lightbox and Experian’s Activate, which help lenders segment high-approval customers early in the funnel, enhancing conversion rates and ad efficiency.

Effective Targeting Strategies: Digital affiliates have created ecosystems similar to credit bureau targeting in direct mail. Diving into best practices for setting up targeting models in digital affiliates may reveal significant efficiencies for lenders.

Operational Maturity: Winning in affiliate marketing requires more than just partnerships; it necessitates a robust marketing funnel, precise targeting, and cross-functional team alignment to respond dynamically to the market.

Challenges in Predicting Affiliate Outcomes: Carlos cautions that affiliate channels offer less predictability than direct marketing channels. The results can be more volatile since affiliates control many variables, such as impressions and targeting.

Fraud Mitigation and Quality Control: Many affiliate platforms offer a pre-login step for users, which verifies identities and screens out fraudulent applications. This security layer helps ensure that applicants are genuine, reducing application fraud relative to other direct marketing channels.

All nine episodes are your ultimate playbook for affiliate marketing success—covering everything from basics to advanced growth strategies for lenders. Tune in to learn more about the affiliate game, boost customer acquisition, and fuel sustainable growth for your lending business!

Be sure to checkout the podcast

Quick note from our sponsors

NMG and Fiat Growth are excited to sponsor this newsletter, delivering fintech marketers actionable insights and strategies to drive efficient, cost-effective growth. We’re committed to supporting companies as they navigate data-backed decision-making, strategic partnerships, and marketplace success.

NMG helps lenders succeed on Credit Karma, Experian, Lending Tree, and other credit marketplaces.

Learn more about NMG

Fiat Growth is a strategic marketing consultancy dedicated to data-driven decisions, innovation, and execution. We work with leading fintech, insurtech, and rewards brands to build partnerships that scale growth and optimize client KPIs.

Learn more about Fiat Growth

Premium Data

🚧 currently under construction 🚧

We're actively developing this feature, and the first 50 subscribers to The Free Toaster will receive lifetime free access to the dataset. 

We intend to track the ads the biggest banks and lenders display across customer acquisition channels like Meta, Credit Karma, Google, Experian, and NerdWallet.

Subscribe now to stay updated on the launch and snag this exclusive access!

Share The Free Toaster

{{rp_personalized_text}}

Click to Share

Or copy and paste this link to others: {{rp_refer_url_no_params}}