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Hello fintech friends,
The past 18 months have seen announcements on stablecoins and agentic payments take up many of the headlines. But a notable development, which has gone somewhat under the radar in the UK market, has been the return of rewards cards. I say cards in general and not specifically credit cards as interestingly many of the launches have actually been debit cards.
This week Currensea launched the Miles & More Debit Card in partnership with Lufthansa Group. Miles & More is the airline rewards programme that as well as Lufthansa, includes other major airlines such as SWISS International Airlines, Austrian Airlines, and Brussels Airlines.
By spending with the card users can earn miles, which can be redeemed across the Lufthansa Group, as well as other perks such as business class check-in at London's Heathrow Airport — even if flying in economy.
Currensea links to a user's existing bank account, which means no new account is needed and no need to top up the account before spending. The company has been on a roll. Earlier this year they launched a card with United Airlines (it's rare for a US airline to launch a card in Europe), and they also have cards in partnership with Hilton and Marriott that link to the hotel chains' respective loyalty schemes.
The company makes money through annual fees and FX spreads. Many legacy UK banks and card issuers still charge 2-3% FX spreads, Monzo and Revolut offer no FX spread, but Currensea sits in between with an FX mark-up of 0.5%-0.99% depending on the card.
We've also seen Revolut launch a debit card with a major hotel chain this year. Revolut's IHG debit card has both a free and paid version — the paid version offers a much better earning rate on rewards points as well as other perks. But you'll need to be spending substantial amounts on the card to make the monthly fee worth your while.
In terms of general rewards cards Revolut's various paid accounts offer RevPoints, an internal currency that can be converted to gift cards, air miles, or even used for match day experiences at Manchester City — the bank is the team's official "back of the shirt" partner.
So why is this the return of UK rewards cards?
In December 2015, UK consumer interchange was capped at 0.2% for debit and 0.3% for credit. Prior to the regulation, credit cards with the highest level of rewards saw interchange in the region of 1.8%. Interchange funds card rewards and with the new interchange rates in place, over time many rewards cards stopped accepting new members and were gradually withdrawn entirely.
Now rewards cards are back. Currensea, Revolut, and also fintechs such as Yonder are offering consumers the chance to build up points or miles. As interchange alone isn't enough to make the economics work, annual or monthly fees are now the norm for such cards.
With low interchange fees in the UK and EU, we will never have card rewards as good as the US. However, this new wave of card reward offerings is welcome. For brands it offers a chance to steer more spend to their hotels and airlines and for consumers more choice is a good thing, although before jumping in, each card's fees and rewards structure will need consideration — not every card will make sense for every consumer.
Please find another week of fintech news below!
— Matt Jones
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In the recent interview, Aleksei Belezeko (Vivid Money CTO) explains why an AI agent should never execute a payment alone, how his team went from AI-skeptical to AI-native in one year, and what regulation actually teaches about AI risk..
The Rundown
🏦 M&A
🚀 Product Launches
SIX and Twint joined a Swiss bank-led stablecoin project, expanding the initiative beyond its original group of six banks.
UK payments provider DNA Payments has embedded iwoca lending into its merchant portal, allowing merchants to apply directly for Flexi Loans ranging from £1,000 to £1m.
Paymentology is powering the UK launch of Maxim, a credit platform aimed at helping members of the African diaspora build credit histories and access a UK credit card.
Fidesmo has partnered with HONOR to bring Fidesmo Pay to the HONOR Watch 6, enabling contactless Visa and Mastercard payments through its network of more than 900 banks and financial institutions.
Revolut and Visa completed France’s first passkey-authenticated agentic card payment, with a Visa AI agent making a live purchase using a Revolut-issued card and customer authorisation through a Visa Payment Passkey.
💸 Fundraises
Outline raised $3m in a seed round led by Founders Future, with 100in and Newschool also participating — the company is building an AI-powered financial-planning platform for finance teams.
Tallinn-based Creditstar secured €4.6m from Kilde, structured as a convertible loan at a €130m pre-money valuation — the company will use the funding for product expansion.
Molten Ventures raised £175m at the first close of a new UK and European growth fund, with the British Business Bank providing a £75m cornerstone commitment and Molten committing £100m itself; the fund is targeting £350m overall.
While not strictly fintech, Paris-based Mistral raised €3bn in Europe’s largest-ever private technology fundraising. Led by Samsung, the round valued the company at €21bn. Europe's AI champion is one to watch given the level of AI/financial-services crossover ongoing.
🏛️ Policy & Regulation
The FCA is reportedly considering whether to lift the UK’s ban on retail prediction markets, as platforms such as Kalshi and Polymarket attract UK users despite being outside the domestic regulatory regime.
UK Finance has called for a coordinated national strategy for tokenised wholesale markets, arguing that the UK risks falling behind without clearer alignment.
The ECB and the BCB (Brazil’s central bank) are studying a potential link between TIPS and Pix, which could eventually enable instant payments between Europe and Brazil.
🗂️ Other News
Revolut is targeting FTSE 250 companies as it pushes deeper into corporate banking, with Revolut Business aiming for 1m customers globally by 2027.
Tether has launched a $400m private-credit fund with London-based Fasanara Capital, with plans to raise as much as $3bn from outside investors and use USDT as part of the settlement infrastructure.
Mastercard has launched Agent Connect, giving merchants a single integration to make their products discoverable to AI agents.
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Fun Stuff
One of the earliest mobile payments happened in Finland in 1997, when Coca-Cola vending machines let customers buy a drink using their mobile phone, with the purchase charged to their phone bill. At the time Wired reported that: Some 40 percent of Finns have a cell phone, partly due to the fact that cell phone giant Nokia is based there.
… How things change…
Nokia didn’t become one of the leading mobile payment companies!
Thanks everyone for reading. Have a great day and see you next week.
