Public policy is somewhat schizophrenic about credit. On one hand, we want people to be able to get it. On the other hand, we don’t want them to get too much – to get into too much debt, or to be tricked by pricing and terms they don’t understand. On credit cards, we worry about borrowers who pay the minimum amount required each month, racking up rising interest costs over months and years.
My guest today is trying to create a healthier credit card – a card, as he puts it, that’s good for you. He is Renaud Laplanche, CEO and Cofounder of Upgrade, back on the show for the third time.
In our conversation, Renaud explains how the Upgrade card works, by converting the debt to an installment loan that the customer pays back on a set schedule, with no fees and a lower rate than would be the case with a traditional card.
A lot of fintech founders have searched for a consumer credit product design that’s both profitable and healthier for the customer. It seems possible that Upgrade has found one – Renaud tells us that it is now the fastest growing credit card in the United States and that Upgrade ranks among the top 25 largest U.S. issuers – and the only fintech in the top 50. He also explains their recent addition of a mobile banking feature, and how they see the interplay between credit and debit products.
In our conversation, we talk about the profile of their borrowers, about regulators’ recent expressions of concern over bank/fintech partnerships, and about his overall advice for regulators. I also ask him how he views the recent turbulence in the fintech sector and the outlook going forward. And we discuss whether embedded finance – and super apps – will ultimately reinvent finance and commerce as we know them.
Plus, he updates us on his world records for sailing.
My talk with Renaud made me remember something I heard from a senior executive at one of the major credit card companies, years ago, before the CARD Act passed. He said they had experimented with adjusting their disclosures and terms to be more transparent and to encourage customers to pay back faster, but had reverted to their prior practices because the changes had made consumers choose other cards. Fast-forwarding to today, Renaud says it’s a “leap of faith” to compete by offering a card whose appeal is that it, as he puts it, comes with “discipline.” It will be fascinating to watch it grow.
Renaud Laplanche is the co-founder and CEO of Upgrade, Inc., a neobank that offers affordable and responsible credit to everyday consumers. Under his leadership, Upgrade has delivered over $18 billion in affordable consumer credit to consumers in just over 5 years and launched Upgrade Card, which has been named the fastest growing credit card in America by Nilson Report in 2021 and 2022. This has made Upgrade the only fintech company ranked in the top 25 U.S. card issuers. Upgrade was ranked the fastest growing company in the Americas by the Financial Times in 2021. The company was valued at $6.3 billion in its latest financing round in November 2021.
Prior to Upgrade, Renaud founded and ran Lending Club for 10 years, taking the company public and reaching a market capitalization of over $10 billion. At Lending Club, Renaud pioneered consumer fintech and grew the company to become the largest provider of personal loans in America.
Renaud was ranked #23 in Bloomberg Markets’ 2015 Most Influential List, an annual ranking of the World’s top 50 most influential leaders across technology, finance, and politics. He was recognized by the Clinton Global Initiative by President Clinton for expanding access to affordable and responsible credit. He was also named “Fintech Executive of the Year” by Finovate in 2020.
Renaud holds the Newport-Bermuda sailing record with a time of 23 hours, 9 minutes and 52 seconds at an average speed of 27 knots. He is a frequent guest lecturer at Columbia Business School.
More for our Listeners
We have great shows in the pipeline. Up next is Deborah Young, CEO of the Regtech Association. Then we’ll have Ed Guerra, Chief Compliance & Bank Secrecy Officer at Zero Hash. We’ll have Jai Ramaswami, from Andreesen Horowitz. I’m going to talk with Simon Taylor of Sardine, on all things crypto and DeFi. And we’ll have a fourth visit with Circle CEO Jeremy Allaire back again, along with Tomicah Tomilson of Haun Ventures.
Recently, Nick Cook and I spoke at the wonderful Toronto Centre on regulatory innovation. David Ehrich recently spoke at #HousingDC22 and will be at the upcoming RegTech Insight Summit in New York. Yesterday, I spoke at the NCRC conference – that’s the National Community Reinvestment Coalition – on how banking will be different in the year 2030. It was a panel with Sila’s Shamir Karkal and the OCC’s Donna Murphy. And of course I’ll be at Money 20/20 in October, and at the Singapore Fintech Festival in November – back in person again!
AIR continues to grow! We’re hiring for multiple roles to join our small but mighty, mission-driven team. We need a lead crypto person, a TechSprint project manager, an events manager, and two roles for our new initiative on Minority Depository Institutions — MDI ConnectTech. In the near future we’ll also be recruiting for an executive to lead delivery of our TechSprints and educational offerings. Visit our careers page to learn more and apply.
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