Even before The Points Guy launched his website in 2010, credit cards were being repositioned as reward earners rather than spending enablers. As the card ecosystem has become more competitive and intensely segmented, and as financial technology has evolved as one of the most innovative sectors of the IT space, the next frontier for credit cards has become clear: gamification. This is according to financial industry veteran Chris Bridges, founder and CEO of a soon-to-be-launched gamified fintech platform called VITAL.
What is gamification?
The website gamify.com defines gamification as “the application of game-design elements and game principles in non-game contexts.” In practice, gamification involves three major elements — objectives, rewards, and competition — combined on a platform where users earn, share and spend points. Badges and a leaderboard are also common.
Gamification’s purpose is twofold: to increase user engagement, as well as user loyalty — particularly in tasks that might otherwise be considered academic and/or technical. A rudimentary example would be a competition where whoever spent the most money in a set time period won a reward.
Sweepstakes and raffles are not new, but digital gamification is creating unprecedented success for personal finance products. Finances Online published a comprehensive report last year showing just how impressive the results from gamification in the financial technology space, or fintech, can be. The journal found that companies that added gamification elements to their financial products witnessed up to a 700% increase in conversion rates. In addition, employees who trained in gamification were also far more motivated, creating a powerful win/win.
Gamifying credit cards
The most familiar “gamification” of credit cards is co-branding with airlines and other travel companies; simply put, as customers spend on their card, they receive points for doing so. The more points they receive, the greater their status and/or their rewards. Hotel and airline-branded cards often run promotions that allow users to earn bonus points for crossing certain thresholds or traveling to certain places during certain times of the year. Ultimately, this type of gamification is meant to influence behavior in order to increase incremental revenues. An airline or hotel, for example, might give out double points during a slow travel period, or offer additional perks based on tiers.
According to Bridges, VITAL works on a similar principle, but its mission is very different. Rather than manipulate cardholder behavior to create brand loyalty or juice a merchant’s profits, VITAL is flipping the script by focusing on the member instead.
“Gamification can get people to make better financial decisions, not just spend more,” Bridges observes. “And by making better decisions, our cardholders’ credit improves. This gains them access to more credit on better terms, which improves their finances even more. We’re creating a virtuous cycle.”
VITAL’s “credit score” game works by linking members’ bank accounts and other credit cards with the VITAL card and app. As they spend, cardholders receive suggestions on how to improve their credit scores based on their patterns, while receiving 1.5% cash back on all purchases.
“The way that credit scores are calculated is pretty opaque and can change at any time,” Bridges says. “But we can stay on top of it all for our members, and then give them actionable information in real-time without them having to do any research.” Services provided by VITAL include optimizing payment schedules, tracking spending habits, monitoring credit health and checking what the company cheekily calls its members’ “VITAL signs.”
The referring game
But VITAL is going one step further, with a community revenue share model that reserves 1% of the total community spend each month and gives it back in the form of a second “referral” game. “Your referral score determines how much cash you get every month,” Bridges explains. “The more you share, the higher your score gets and the larger piece of the 1% cash back pie you get.” Through this model, everyone wins (though some more than others).
Bridges says that referral rewards will be deposited automatically into the member’s account every month. Even if a member has no additional shares in a particular month, they can still accrue rewards because the platform rewards members based on how many friends they have signed up. They also receive credit for everyone their friends bring in, and even their friends’ friends. It’s another virtuous cycle that brings in the social element of a multi-player game while generating that holy grail of personal finance: passive income.
Mission: VITAL
While VITAL’s games are designed to both reward members and grow the community as a whole, Bridges says that its mission goes beyond just building another credit card. “We’re building a financial community,” he says, “and not of people who happen to live in the same neighborhood, or shop at the same stores. It’s a community in the realest sense of the word — where members lift each other up while expanding their own financial horizons and raising their own credit scores.”
One of the benefits of such a community is that members do not see their status or bank account diminished because they made a late payment, for example, or because they haven’t had a chance to build credit. Bridges envisions a community of friendly competitors, where the nicer things in life are within reach for all. That includes a sleek metal card made of anodized aluminum — a perk long reserved for holders of prestige cards like the American Express Centurion, which carries an annual fee in excess of five thousand dollars.
But VITAL’s members should not expect high membership fees — if any at all. Bridges says he wants to build an inclusive community.
“If we can’t knock down every barrier that blocks people from building up credit, we’ll do our best to help folks scale the wall,” he says. “If you have a credit score, we’ll look at it. If you don’t, we’ll ask you questions and assess real indicators of your creditworthiness. Are you earning money? Reliably paying your bills? If a blank credit history is the only barrier standing between you and credit-building, we’ll work to welcome you to the VITAL community.”
The platform is currently in its beta phase, and Bridges expects the VITAL community to be fully operational soon. For now, future members can sign in to be notified as soon as the launch countdown begins.
