Summary

  • Cardless, a company founded in 2019, helps international airlines launch and scale credit cards in the US, partnering with First Electronic Bank for card issuance and management.
  • Cardless offers speed to market, direct integration into airline ecosystems, and unique underwriting methods to airlines.
  • The company has launched cards for LATAM Airlines, TAP Air Portugal, avianca, and Qatar Airways, with more airline partnerships expected in the future.

This summer has been significant for airline credit card launches in the United States. Qatar Airways released two Visa products, while Colombian Flag carrier avianca unveiled two new cards on the American Express network.

The same company, Cardless, was behind both launches, leading Simple Flying to sit down with Michael Spelfogel, the Co-Founder and President of Cardless, to discuss what is next for airline credit cards.

What is Cardless?

The company was founded in 2019 by Stanford graduates Spelfogel and Scott Kazmierowicz. Today, they help brands launch and scale credit cards in the US. Although it all started with sports teams, today, the company’s primary customers are all international airlines.

The program works by partnering with First Electronic Bank, which legally issues the cards and manages the program’s compliance and regulatory risks.

Ultimately, Cardless becomes the single point of accountability for a brand partner like Qatar Airways and for the customer, with cardholders using the Cardless app to manage their cards, pay bills, dispute transactions, see statements, and more.

Cardless and American Express

Credit: Cardless

Cardless then liaises directly with the airlines to add frequent flyer miles to the user’s account based on the card spending.

What does it take to launch an airline credit card?

According to Spelfogel, two primary motivators exist for an airline like TAP Air Portugal, Qatar Airways, or avianca to work with Cardless.

First, the United States is often an airline’s most important international airport market. This is due to many factors, including the number of travelers originating in the US and the amount of commerce that occurs here.

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Qatar Airway To Introduce Two Avios-Earning Visa Credit Cards In The US

The oneworld Alliance carrier is offering up to 10,000 bonus Avios for early applicants.

Secondly, airlines always look for ways to grow and expand their business. Many airlines either did not have a card before in the US market (as was the case with Qatar Airways), or they did, but the cards did not meet the needs of the partner brand (like avianca’s previous offering).

These factors led to Cardless’s focus on helping brands like avianca launch and scale cards with innovative products from which customers can obtain value.

According to Spelfogel, Cardless has three distinct advantages compared to other airline credit card providers:

“The first is that our speed to market is really fast and speed to iteration. So we’ll launch cards in about 90 days, and it takes traditional banks about 18 months. So we can move forward revenue growth by at least a year for the brand.”

Qatar Airways Boeing 787 Accelerating In Prague

Photo: Jaromir Chalabala | Shutterstock

The second unique offering is that Cardless embeds its product infrastructure directly into the brand’s ecosystem. In a standard scenario, credit card applicants will mail in an application or submit a request online and then wait up to 10 days to get a physical card before they can use it.

The Cardless options are built with direct checkout integration, so applicants can see a credit card ad and a discount right on the page when buying a flight. If approved, they will get the credit card number immediately, which will autopopulate at checkout.

“We are basically taking the best-in-class Delta Amex experience and making that accessible to brands that are not doing 1% of US GDP.”

The third and final benefit is underwriting. According to Spelfogel, banks struggle to approve customers, especially those flying with international airlines who may be recent immigrants with thin credit files or lower scores.

Cardless considers brand data so that it can use the applicant’s frequent flyer level and spending history with the airline to help inform its ability to approve applicants – a unique aspect of the program.

Which airlines are already working with Cardless?

In addition to its initial offerings for sports teams, which no longer appear on its website, the company has an American Express card with Simon, the largest owner of shopping malls in the United States. The card provides buyers with 5% cashback at Simon malls and up to 10% cashback on gift cards.

On the airline side, with its most recent cards launch for Qatar Airways, the company now has seven cards across four airlines.

Avianca

The flag carrier of the country of Colombia is the latest airline to unveil a product with Cardless. Star Alliance carrier avianca has two cards at different price points, which significantly benefit anyone looking to obtain frequent flyer status without taking a flight.

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Avianca Unveils Two US American Express Cards That Come With Star Alliance Silver Status

The cards earn a bonus of up to 100,000 miles and include elite status benefits like lounge access and priority perks at the airport.

Matt Vincett, CEO of LifeMiles, noted how the new cards offer exceptional opportunities:

“Together with Cardless and American Express, we launched what we have designed to be the best credit card options for mileage enthusiasts.

“The Premium card, I believe, is especially compelling, but both of our offerings give cardholders the ability to earn miles quickly, and then enjoy discounts when their miles are redeemed. We’ve even packaged-in an Elite status to make reward travel more enjoyable.”

  • Avianca elite card

    avianca lifemiles American Express Elite Card

    The avianca Lifemiles American Express Elite Card from Cardless comes with a $249 annual fee and offers cardholders elite status and a complimentary monthly subscription to LifeMiles+ Lite.

    Sign-up Bonus

    60,000 lifemiles after spending $4,500 in the first 90 days + 40,000 lifemiles after spending a total of $25,000 in the first 365 days

    Earning Rate

    3x On all avianca airlines and lifemiles purchases
    2x On travel and restaurants
    1x On everything else

    Card Benefits

    Star Alliance Silver Status
    Lifemiles+ monthly membership, which includes a 25% redemption discount on avianca airlines flights and 10% discount on Star Alliance flights

Qatar Airways

In May, Cardless launched its first oneworld Alliance cards with two Qatar Airways Visa cards. According to Spelfogel, Qatar Airways Privilege Club’s usage of the popular Avios frequent flyer currency has made for great earning and redemption opportunities for US travelers.

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Qatar Airways Unveils US Credit Cards That Come With Oneworld Elite Status

The two new cards offer a simple way to earn elite airline status and collect Avios, which can be used for redemptions across airlines worldwide.

Speaking exclusively to Simple Flying, Thomas Vadakedath, Senior Vice President of Loyalty at Qatar Airways, detailed what it was like to work with the Cardless team for the airline’s record launch:

“The primary objective was speed to market. We needed a partner that was hungry enough, just like us, that we could launch a product in, say, 90 days.

“We had the first meeting with a few of the potential partners, and through the discussions we narrowed that down to Cardless. It just felt like a perfect fit. The team of Michael Scott and Fitz… they just were able to bring all of the things we were looking for in the product.”

TAP Air Portugal

At the beginning of the year, there were very few American Express airline cards in the US, primarily ones offered by Delta Air Lines. Cardless changed that earlier this year when it launched two cards for Star Alliance carrier TAP Air Portugal. Spelfogel notes that, as opposed to Visa or MasterCard products, cards issued on the American Express network come with various merchant-funded offers and exclusive opportunities for customers, such as Ticketmaster presales and additional travel benefits.

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TAP Air Portugal Launches A US Miles&Go American Express Credit Card

The card will get you closer to Star Alliance status as well.

The cards have also been performing well for the airline. In an exclusive interview with Simple Flying, TAP Air Portugal’s Director for the Americas, Carlos Antunes, spoke enthusiastically about the card’s reception:

“We are currently exceeding expectations for the first few months.”

LATAM Airlines

The first airline to partner with Cardless was LATAM Airlines. Part of the largest airline group in South America, the carrier released two cards on the Visa network that allowed US travelers to earn LATAM Pass miles, which can be redeemed on a range of airline partners, including Delta Air Lines.

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LATAM Partners With Cardless To Launch Co-Branded Rewards Credit Cards

Earn miles and rewards with LATAM’s new credit cards.

The reception at the airline and among its consumers so far has been positive. Speaking exclusively to Simple Flying this month, Cristian Ortiz, the CEO of LATAM Pass, highlighted how smooth the process of launching the new cards was:

“Since the launch of LATAM Airlines Group’s credit cards in the United States, Cardless has been a great ally for us, providing support and efficiency in developing a 100% digital product.

“At LATAM Pass, we have designed a very attractive value proposition for our members in the United States who travel to South America, and we look forward to announcing more news soon.”

  • LATAM Airlines World Elite Mastercard

    LATAM Airlines World Elite Mastercard

    The card offers LATAM Airlines Lounge passes, additional earning opportunities, cabin upgrades, more Qualifying Points, and other premium benefits.

    Sign-up Bonus

    40,000 Bonus Miles after spending $2,500 in the first 90 days

    Earning Rate

    4x on LATAM Airlines purchases

    3x on restaurants

    3x on rideshare, taxis, and public transit

    Card Benefits

    4x on LATAM Airlines purchases

    3x on restaurants

    3x on rideshare, taxis, and public transit

  • LATAM Airlines Mastercard

    LATAM Airlines Mastercard

    The LATAM Mastercard allows travelers to boos their LATAM Pass balance and access exclusive benefits without an annual fee.

    Sign-up Bonus

    15,000 LATAM Pass Miles after spending $1,000 in the first three months

    Earning Rate

    3x on LATAM Airlines purchases

    3x on Dining

    3x on Rideshares, taxis, and public transit

    1x on Everything else

    Card Benefits

    10% of mile earnings qualify towards Elite status within the LATAM Pass program.

As the market becomes increasingly saturated, airline and loyalty programs must innovate to stand out. What do you think cards will start offering to attract customers?

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