Credit card startup Imprint beats big banks for Rakuten co-brand deal

Im, the 5-year-old credit card startup, beat out banks in a competitive bidding cess for a new co-branded card from online shopping platform Rakuten, CNBC has learned

Moreover, The deal, to be announced later Tuesday, is the most recent sign that Im is gaining traction in the co-branded credit card industry

The New York-based startup also just raised $70 million in additional capital, boosting its valuation by 50% to $900 million less than a year from its previous round, according to Im CEO Daragh Murphy

Staff | ReutersThere's a new player making waves in an industry dominated by big banks

On the other hand, Im, the 5-year-old credit card startup, beat out banks in a competitive bidding cess for a new co-branded card from online shopping platform Rakuten, CNBC has learned

Market analysis shows deal is the most recent sign that Im is gaining traction in the co-branded credit card industry

The New York-based startup also just raised $70 million in additional capital, boosting its valuation by 50% to $900 million less than a year from its previous round, according to Im CEO Daragh Murphy

Credit card partnerships with retailers, airlines and hotels are some of the most hotly contested deals in finance

The industry's largest players include JPMorgan Chase, Capital One, Citigroup and Synchrony

Additionally, "We're talking to Fortune 500 companies being their partner and them choosing us over Synchrony, over Barclays, over U (an important development)

However, Bank," Murphy said in an interview

Furthermore, "We have to kind of walk and talk we're a big, important company, even though we still have a startup ethos

On the other hand, "That's why the company recently raised capital, bringing its total to $330 million, most of which is held on the firm's balance sheet, according to Murphy, amid market uncertainty

Those funds help show potential partners that Im has staying power, he said, in this volatile climate

However, Im also has $1 (noteworthy indeed). 5 billion in credit lines from banks including Citigroup, Truist and Mizuho, which it uses to extend loans to card customers, Murphy said

What the re reveals is startup is behind the cards from brands including Eddie Bauer, Brooks Brothers and Turkish Airlines

Moreover, 'Banks are in trouble'To offer its credit cards, Im usually partners with one of two small banks, First Electronic Bank or First Bank and Trust (an important development), considering recent developments

Im handles the customer experience, including the nology and credit decisions, while using the credit card rails of regulated banks

Furthermore, In the case of the Rakuten card, Im is relying on the American Express network, which allows users to get Amex purchase tections and other perks

It's using First Electronic Bank to help issue the cards

At the same time, "Though we're not a regulated bank, we're effectively building a bank," Murphy said, in today's financial world. "We have to do all the same things as a bank (an important development)

We're a capital company; we're a compliance company; we're a risk and credit and fraud company; we're a nology company (an important development)

Additionally, "To gain a toehold in the market for co-branded cards, which can be used anywhere credit cards are accepted, Im decided it would focus on a seamless digital experience for customers, Murphy said (this bears monitoring)

That requires nology integration that is difficult for established players who rely on third-party companies including Fiserv to complete transactions, he said. "The banks are in trouble because they don't own the nology that the credit card runs on," Murphy said. "Every credit card in your wallet, whether it's Chase … or from Citi or Synchrony, they rely on two or three different third parties to power the nology. "Fees & rewardsIm also decided to set itself apart by making it easy for customers to pay off their loans, Murphy said

Additionally, Card companies including Bread Financial and Synchrony make a far larger percentage of revenue from late fees than Im does, he said (an important development)

At the same time, "You shouldn't have all these regressive late fees, and you shouldn't make it hard to pay," Murphy said. "The easier we make it to pay, the more ly you are to use the card, and the more ly you are to use the card, the better it is for everybody. "Finally, Murphy said the company's low customer acquisition costs allow it to fund more rewards for card users (something worth watching), given current economic conditions

Here's what we knowMoney MoversCorrection: This article has been d to correct s made by the Im CEO on credit card partners, in this volatile climate.