Prepaid credit cards and the corresponding data analytics—with this offering, the Munich-based fintech Xpay has won over investors such as Apeiron Investment Group, Grey Study Capital, and the Swiss 'unicorn hunter' Daniel Gutenberg. The Series A financing raised a total of €7 million.
As is often the case in retail, Amazon is leading the way: Consumers receive a Visa card through the online giant that not only entices them with a starting credit but also offers benefits in the form of bonus points. The points collected are then converted into credit when they shop on Amazon.de. This encourages customers to shop on the platform again in the future.
Prepaid credit cards as a bonus program for SMEs
To enable small and medium-sized businesses to offer such programs, Denis Raskopoljac launched Xpay in 2016. The company provides companies with Mastercard cards for free, which they then pass on to their customers in the form of a bonus program. The basis is a license from the Munich-based payment service provider Wirecard. Consumers receive various discounts and benefits when shopping with the branded prepaid credit cards. According to Xpay, 80,000 end customers are already using the card products, and this number is expected to rise to over 1 million by the end of the year.
The business model of the Fintechs However, only after the purchase. The company uses the data generated during shopping to later present suitable offers to the consumer — even in offline retail, as COO Markus Shanek explained:
“We are providing brick-and-mortar retailers and smaller online retailers with AI and machine learning-based tools that otherwise only Amazon and other large online companies have.”
Low costs, great potential
Christian Angermayer justifies the investment decision of the Apeiron Investment Group:
"What impressed us most about Xpay is that the company offers many of the features of so-called challenger banks, without their biggest problem: excessive customer acquisition costs. By partnering with established companies and accessing their existing end customers, Xpay has virtually no customer acquisition costs and can fully focus on providing the perfect service to both its partner companies and their end customers. At the same time, its end customers aren't just millennials—who often generate low sales—but customers from all age groups and demographics."
Among Xpay’s first customers is the specialist for electronic payment transactions as well as prepaid and voucher solutions Epay. They are also convinced of the solution, as Stephan Heintz, Senior Director Issuing Epay, explains:
“We have launched our Epay Card, a prepaid credit card, with Xpay and are successfully operating the program in Germany and Austria.”
