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.

TL;DR

The FTC is suing Dave for misleading consumers about its cash advance services and hidden fees, a claim the company disputes while reporting strong Q3 revenue gains. Meanwhile, Marqeta's stock tumbled after a weak Q4 forecast despite increased processing volume, and NerdWallet made a strategic mortgage market entry by acquiring Next Door Lending. Affirm launches in the United Kingdom. LendingTree saw a significant revenue boost thanks to insurance gains, Mastercard reported strong Q3 growth amid digital payment expansion, and Experian launched an AI tool for financial data tasks. Plaid's CEO foresees pay-by-bank growth for bills but not everyday purchases, and Upstart wants to attract super prime borrowers with an AI-driven model.

News

(11/5) The FTC is suing Dave, an online cash advance app, for allegedly misleading its users with claims of easy access to up to $500 in cash advances and charging hidden fees disguised as "tips." The app reportedly only delivers the promised $500 advance in rare cases. Moreover, consumers face undisclosed "Express Fees" for instant transfers and ongoing membership fees that are hard to cancel. The FTC claims Dave’s conduct violates consumer protection laws and has taken the issue to court. [FTC]

(11/5) Dave reported strong preliminary Q3 2024 results, with a 41% revenue increase to $92.5 million and a profit of $0.5 million. CEO Jason Wilk highlighted the company's momentum, adding they plan to raise full-year revenue guidance. Addressing the ongoing FTC suit, Wilk stated, “We believe this case is another example of regulatory overreach by the FTC, and we intend to vigorously defend ourselves.” He clarified that the FTC’s action, “for which we believe we have strong defenses, is related to consumer disclosures and consent, not our ability to charge subscription fees and optional tips and express fees moving forward.” [Dave]

(11/4) Marqeta’s stock plunged over 30% after hours as the company issued a weaker-than-expected forecast for the fourth quarter. Despite a 30% jump in processing volume and gains in net revenue and gross profit, Marqeta's projected 10-12% revenue growth fell short of analysts’ hopes for 17% growth. The company attributes the miss to a challenging banking environment and specific customer shifts, a stark contrast to the upbeat ambitions it held after going public in 2021. [CNBC] [Marqeta]

(11/3) Affirm is stepping into the U.K. market, marking its first expansion outside North America amid impending regulatory changes for the buy now, pay later (BNPL) sector. While the U.K. government plans to introduce stricter rules by 2026, Affirm aims to differentiate itself with fixed interest rates, no late fees, and a focus on transparent borrowing. Despite challenges faced by the BNPL industry, including sharp valuation drops for rivals like Klarna, Affirm’s stock has rebounded in 2024 due to strong revenue growth and a narrowing of losses. The U.K. launch starts with smaller partners, but Affirm’s existing ties with Amazon, Shopify, and Apple hint at potential future partnerships. [TechCrunch]

(11/1) NerdWallet just made a strategic entry into the mortgage world, snapping up Michigan-based brokerage Next Door Lending for $1 million. “We also opportunistically entered the mortgage brokering market during a cyclical trough with the acquisition of Next Door Lending,” CEO Tim Chen announced in the Q3 earnings call, aiming to “provide mortgage shoppers with more hands-on guidance.” With this move, NerdWallet plans to strengthen customer relationships and boost revenue growth by 1-2% in Q4, while Next Door’s founders, who are sticking around, aim to make mortgages easier to navigate for homebuyers nationwide. [National Mortgage Professional]

(10/31) LendingTree's Q3 2024 hit the high end of expectations, with revenue jumping 68% year-over-year to $261 million, led by a 210% surge in insurance revenue. The Consumer segment brought in $59.5 million, down 12% year-over-year, with a profit of $28 million and a margin decrease to 47% from 51% last year. Growth in small business loans (up 32%) and a 5% increase in personal loans, reaching $27.8 million, were offset by a decline in credit card revenue. To boost consumer engagement, LendingTree continues marketing campaigns, especially in personal loans, and recent talks with lenders suggest a willingness to relax credit criteria—a potential boon if the Fed continues lowering interest rates. CFO Jason Bengel underscored LendingTree’s commitment to expense control and debt reduction to optimize cash flow, setting up for anticipated growth in 2025​​. [LendingTree, LendingTree]

(10/31) In its Q3 2024 earnings call, Mastercard reported a strong 14% increase in net revenue and a 13% rise in adjusted net income (non-GAAP currency-neutral basis) thanks to robust consumer spending, especially cross-border transactions. CEO Michael Miebach highlighted strategic expansions, including two new acquisitions—Recorded Future and Minna Technologies—to boost cybersecurity and subscription management services. Mastercard is making big strides in digital and contactless payments, expanding tap-to-pay and QR code payment options globally, particularly in Latin America and Africa. Executives remained upbeat about the company’s growth trajectory, noting strong demand for its value-added services and solutions. [Mastercard, Earnings Transcript via The Motley Fool]

(10/30) Experian launched Experian Assistant, an AI-powered suite that streamlines data modeling and analytics for financial institutions. Leveraging Generative AI, the tool cuts model development time from months to days, simplifying complex data tasks and empowering analysts to work more easily with data. Early adopter, Continental Finance, cut data-building time by 75%, underscoring Experian Assistant’s potential for cost savings and productivity gains. Built in collaboration with major financial firms, the tool emphasizes responsible AI use and plans to expand soon into areas like regulatory compliance and marketing. [promotional piece from American Banker ]

(10/28) Plaid CEO Zach Perret predicts pay-by-bank options will gain traction for paying bills like mortgages and utilities, but he’s skeptical they’ll replace credit cards for everyday purchases like groceries or a Starbucks run anytime soon. “Realistically, pay-by-bank is focused on a much broader swath of things, and I think it’s going to take a long time, if ever, to get to that Starbucks purchase,” Perret explained. While consumers find card payments convenient, retailers are eager for alternatives to dodge steep card swipe fees. This push aligns with recent open banking regulations from the CFPB, which retailers hope will encourage the spread of credit card alternatives. [Payments Dive]

(10/24) Upstart, known for subprime lending, is now targeting super prime borrowers with T-Prime, allowing banks and credit unions to reach high-quality applicants using Upstart's marketing channels and automated system. Unlike traditional FICO-based models, Upstart’s AI-driven approach considers a wider range of data, allowing for “a much more thoughtful decision around the risk” of repayment, says Alliant Credit Union CEO Dennis Devine. The model also incorporates economic forecasts, and with 90% of loans instantly verified, Upstart provides a streamlined, digital-friendly experience that appeals to both consumers and banks.[American Banker]

Other stuff we’re reading and listening to

(11/5) Key takeaways from Money20/20 include the growing role of AI in fintech, embedded finance, stablecoins advancing cross-border payments, emerging climate fintech, and IPOs on the horizon [Forbes]

(11/4) Ned secures $4.2 million in seed funding led by Impression Ventures to enhance cash flow lending technology for scalable, transparent underwriting and capital solutions [Pulse 2.0, Ned]

(10/31) Banks criticize CFPB’s open banking rule for lacking clear safeguards and liability guidelines amid concerns over data security and fraud risks [Bloomberg Law]

(10/30) Array acquires Payitoff to expand its debt management capabilities within its embedded finance product suite [Fintech Futures]

(10/30) PowerPay secures $60 million in corporate bond funding with KeyBank to fuel technology upgrades and expand its digital lending solutions for home improvement and healthcare financing [FinTech Global]

(10/29) AWS and Plaid advance the business case for open banking and pay by bank (video) [PYMNTS]

(10/28) Pipe launches a business card embedded in SaaS platforms to enhance small business capital access, supported by First Internet Bank and tailored for micro-business needs (video) [PYMNTS].

(10/28) FairPlay AI CEO Kareem Saleh discusses the potential of "Fairness-as-a-Service" to reduce bias in AI underwriting and transform lending practices (podcast) [22 minutes in lending]

Jobs

• Director of Search Engine Marketing (QuinStreet)

• Director of Product & Partner Marketing (Mercury)

• Head of Marketing - Accounting (Mercury)

• Head of Marketing (Northern Trust Asset Management)

• Head of Brand Marketing (Rho)

• Director, Partnerships (Pismo)

• Director, Product Marketing (PayPal)

• Product Marketing Director, Credit (PayPal)

• VP of Marketing (Gesa Credit Union)

• Director, Marketing, North America (Airwallex)

• Director/Senior Director Growth Team (Embedded Finance) (Serent Capital)

• Director, Product Marketing (Pagaya)

• Head of Institutional & Growth Marketing (FalconX)

• Director of Product Marketing (Pontera)

• Head of Brand Marketing (Unlock Technologies)

• Product Marketing Director - Optimization (FICO)

• Director, Digital Media (Growth Marketing) (Chime)

• VP of Marketing (Corvee)

• Growth Marketing Manager (LendingTree)

Quick note from our sponsors

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Premium Data

🚧 currently under construction 🚧

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

For a glimpse into what we’re thinking, check out this post from Carlos Caro