Transcript
Welcome to Money Isn’t Everything. I’m Mary Wisniewski, Cornerstone Advisors editor-at-large and host of the show that explores early-stage ideas that could, if not already, shake up financial services.
Today on the show is Jacob Zach, who founded an early-stage fintech company that recently rolled out a credit card that rewards consumers for their auto spend.
That includes their auto leases and loans, gas, auto repair, and way more than that, all under the big umbrella of auto.
It’s called Fasten Rewards Visa Card.
The product is hitting at a very interesting time.
With a slew of auto tariffs already in effect, or others expected to take effect, the cost of car ownership is only going up.
That includes the parts required to repair a vehicle.
Fasten’s ambition is to be Bilt, but for auto.
We talk about rewards for things that are more essential than eating out, auto tariffs, romanticizing road trips, and what it’s like building a startup in an especially turbulent year.
Here’s our conversation.
Jacob, welcome to Money Isn’t Everything.
Thanks so much for being on the show today.
Thanks for having me.
Excited to be here.
Yeah.
Well, it’s an exciting time.
You’re building the startup.
You just launched.
Not to mention auto tariffs are on the minds of many and have a lot of consequences for everybody with a car.
So, lots to unpack.
But I guess first off, congratulations.
Thank you.
Thank you.
It’s been a very exciting journey.
When your wife is three months pregnant with your first child and you tell her, “Hey, I want to start a company,” she might think you’re a little crazy.
But here we are.
Great baby, great company, and things are going well.
So it’s exciting.
I like it.
Yeah.
Just add to the pressure cooker.
Why not?
You never know.
Yeah.
When it rains, it pours.
Exactly.
Exactly.
I’ve seen in your marketing material, and it’s something that some of our listeners will know of, the Bilt comparison.
You’re like the Bilt for auto.
I’ve seen the phrasing, and it’s really interesting to think of this.
I wanted to start there.
First of all, how long have you been working toward this concept?
Yeah.
So I’ve been in fintech before this, but I came to this idea about two years ago.
I left my last job to start Fasten.
My wife was having a baby.
We were having a baby, moving to the burbs, and I was like, hey, I’m getting rewarded for my Starbucks and my Netflix.
Why not the most expensive things?
Obviously, Bilt’s an amazing company, and I’d be lying if I said they did not give us some inspiration.
I really wanted to take a model that had worked in a lot of different areas and bring it into auto, both on the loyalty side and really on the personal finance side as well.
Well, let’s get into this.
Why do you think it’s been this untapped rewards area?
Yeah.
Auto is very disjointed, right?
You have the OEMs and the brands, but you also have the dealerships.
So you can be in any specific area.
It could be Minneapolis or St. Louis or Oklahoma City or Hartford, Connecticut, and you can have a bunch of different options.
Our goal is to build brand loyalty.
Take this model of rewarding consumers for their auto loans, but also build brand loyalty for the dealerships that we’re partnering with.
It’s interesting because we definitely do have some bank and credit union listeners.
They’re probably the comparable of the dealerships in this model because they have the data on their customers.
They know when, in that case, it would be like, oh, maybe I need a loan at this moment.
But in this case it’s like, hey, you definitely need an oil change.
I have that information.
Perhaps this is the time to market something.
Then use your points.
Am I thinking about this right?
Yeah, exactly.
What the card is itself, we are, as far as I know, the only credit card that rewards consumers as they pay off their auto loans and leases.
Our whole thing is, we’re brand agnostic.
You can have a Ford.
You can have a Toyota.
You can have a Mercedes.
You can have an Audi.
But we’re also lender agnostic.
So if you get your auto loan from your bank or from an OEM’s captive or from your credit union, that doesn’t really matter.
Then the whole key is being able to use your points broadly.
We want consumers to be able to use their points in a lot of different ways.
So the consumer can use their points for traditional redemption categories like travel and hotel, but they can also redeem them at their dealership group.
If you are connected, most people will have a few different groups, but your group, let’s say it’s Mary’s Ford, Mary’s Toyota, Mary’s Audi, you can go to any of Mary’s stores and use those points for service, maintenance, or down payments.
So we really want to be the first credit card where you can go on your dream vacation or buy your dream car, beyond being a traditional travel card.
Yeah.
And auto specifically, I feel like, I am someone who does have a car.
I live in LA.
If I could walk everywhere, I would, but that’s because I lived in New York City.
On the other hand, the opposite of me is people love auto.
It’s one of those passion things for a sizable amount of people.
So I guess I’m also curious, is this a passionate audience you’re going after?
Yeah, totally.
I think it actually could be both.
What it comes down to is, this is driving in America.
This whole thing really kind of came about because I was living in Brooklyn.
I was moving to the burbs, and my wife and I, who hadn’t had cars for a decade, both now needed cars.
So I go to the dealership and buy the cars.
The dealerships have their own headaches, which I think people know.
Lots of paper, lots of paperwork, and it can take hours.
But I was thinking to myself, hey, I’m now getting rewarded for my Starbucks, my Netflix, my gas, my insurance, now my rent.
Why can I not get rewarded for my auto loan and lease?
Auto loans and leases are the second-largest form of non-discretionary spend that people traditionally are not getting rewarded for, after housing.
Whether you’re a car aficionado or just someone who drives to work every day, most Americans have a car.
New York City is kind of the only real exception.
Whether you’re living in LA or Boston or Maine or anywhere in between, you have your car.
Whether you like to work on your car or it’s just a mode of transportation, you have a car.
You generally have an auto loan or lease.
Now Fasten is really the card that can reward you for your auto loans and leases.
Beyond that, there’s no real credit card that’s holistic for your auto spend.
Instead of giving multiple points at restaurants like most traditional cards, we really want more multiple points for your auto-related spend.
Parking, gas, insurance, tolls, maintenance, car washes.
Things that you are going to have and are going to spend money on as a consumer.
It’s not just owning a car.
It’s all of the extra stuff.
If you’re someone who wants to soup up your Jeep, great, we’ll give you multiple points on that.
But then beyond that, if you just have your insurance and your gas, we’ll give you multiple points on those too.
There were gas cards that were really popular in the ’90s.
They still exist.
But there was no real holistic auto card, and we really want to be that first holistic auto card for everyone who has an auto loan or lease, which is really everyone.
So it’s broad usage, broad redemption.
Yeah.
He’s right.
My dad is one of the people with the gas card.
Yeah, exactly.
I’m like, what is this?
And now gas and insurance, maintenance.
It’s not just gas and insurance.
You’ve got to go and get your car fixed.
You’ve got to go and get your car worked on annually.
That maintenance is not going anywhere.
So we’re here to help with that.
Yeah.
And the price is going up because the auto tariffs, it’s such a, we’re still in a bit of a yo-yo, not necessarily auto, but I have been seeing articles.
I think the last one was in NPR about how everything’s, like the repairs on your vehicle, then your insurance.
So the price of auto is just...
Yeah, totally.
And you living in LA, I would assume that your insurance has really gone up a lot, right?
Your auto insurance and probably all of your insurance, frankly.
But yeah, that’s the whole thing.
Auto tariffs are coming whether we like them or not.
Auto tariffs are going to make your car more expensive.
Our whole concept is, you’re spending this money.
You really should go and get these points.
To get your brakes changed could be like $1,200.
Now you can say, “Hey, I have these points. I want to go and use them toward my brake change.”
I can do that.
Or I can save them and use them toward a flight or my next car.
So there are a lot of different ways to use the points, and it doesn’t really even have to be within your auto spend.
Walk me through, because I’m really curious about how to design a rewards program or what points equal what.
What kind of thinking goes into that?
How did you design your program?
Yeah.
We actually worked with a guy, Scott, who was the executive editor of The Points Guy.
He helped us really develop our rewards program.
Scott, shout-out Scott.
He’s great.
The whole thing is, you want it to be broad enough for consumers.
Broad enough that people want to use it both on the redemption and the point accrual side.
Some people might sign up for a credit card that they end up just throwing in their drawer and never using.
So the whole thing is having regular use.
On our end, you’re getting your gas and you’re getting your insurance every month.
You’re spending money on that every month.
So why not go and get these bonus points?
Because if you’re using a Chase card or you’re using your Amex card, you’re only getting one point for your gas and your insurance and your car washes.
With the Fasten card, you’re now getting three points with all of those.
So really going after this recurring spend that isn’t really what’s highlighted in most credit cards.
We’re really going after restaurant spend.
Yeah.
That’s really interesting.
It is interesting to give points for things you have to buy anyway.
I am curious about that in general and especially rent as well with Bilt.
On the other hand, people are really stacking their credit card debt.
Credit card debt is up as well.
Any advice for the people?
I know there’s the type that’s like, hey, I know how to game the points thing.
Certainly any Points Guy readers should know how to stack their cards.
Yeah, totally.
I think part of that is, we’re going to give you points for everything.
We’re a Visa card.
But we are going to give bonus points for your auto spend.
I think people are going to see these optimized cards for industries really coming out in the future.
We’re going after auto.
Auto spend is 5% of U.S. GDP.
I think there are a lot of restaurant cards, but there are going to be different cards that are coming out for all these different categories.
There are going to be ones coming out for sports.
You’re a big sports fan.
You like to get a lot of tickets from Ticketmaster or GameTime or whomever.
There’ll be credit cards for that.
I think this is something that you and I are going to see across a lot of different industries.
These more verticalized credit cards that are a way for people to go out there and save money on things that they care about.
For us, you might care about your car or you might not be a big car person, but either way, you’re spending the money.
That’s why I really like this category, because it’s broad.
No matter if you go racing every weekend or you’re just picking up your kids and driving them to school.
Here’s the one segment on the show that we do, but you already spoiled the plot because you kind of already said it.
It’s “That’s What You Said.”
So you sort of said it here, but you’ve said it before, and I just want to bump into the quote, which is, “You get credit card points for your Starbucks and your Netflix. Why not for one of the most expensive things that you own?”
I know you said you’ve been working on Fasten for about two years, but was there that single moment where you were like, oh, this is ignored?
Is there something in your past?
Yeah.
I was living in New York City, didn’t have a car.
I went to college in D.C., didn’t have a car.
Then my wife and I were having a baby and moving from Brooklyn to Connecticut, where we needed a car.
We both went to get cars.
We went to buy cars.
I was like, there are a few things that could really be improved upon in this dealership experience.
One, you’re not getting points for your auto spend.
You’re not getting points for your auto loans and leases.
You are spending that money anyway.
It is the second-largest form of household debt in America.
So, as I mentioned, get rewarded for Starbucks and Netflix.
Why not the most expensive things you own?
But then it’s also the ancillary products.
Owning a car is not just buying the car.
It’s the gas.
It’s the insurance.
It’s the car washes.
It’s all the other things that you spend money on.
There’s really no credit card that gives bonus points, like three points per dollar, for your holistic auto spend.
That’s what we’re doing with Fasten.
Then, people don’t always just want to redeem for travel and gift cards.
That is the traditional model, travel, hotel, gift cards.
But auto spend and auto expenses are going up.
To get your brakes changed could be around $1,200.
If you have points and you’re saying, hey, we’re doing a different type of vacation this year, or we have this large expense coming up for my auto, why not be able to use those points for your auto-related expenses?
Accidents happen.
Things happen.
People need to deal with issues with their car, and so unexpected things you can now use your Fasten points toward at your dealership group.
So it’s a retention tool for your dealership group for service and maintenance, but also using your points for your potential down payment as well.
And for distribution.
That’s always the hardest thing, building your audience, especially as an early-stage fintech.
Scale of one to 10, how hard is it to sell to a dealership?
I imagine that’s one of the thornier challenges.
Yes.
That’s a great question.
Dealerships are a really interesting industry because you have your local business that might be in its third or fourth generation.
It’s a lot of family businesses.
So you’ve got the guy in their 30s or 20s, and their dad in their 60s or 70s, and possibly even their grandpa in their 70s, 80s, or 90s.
It’s a lot of family politics.
Luckily, I come from a family business.
My dad, my grandpa, and my brother all work together.
So I do have a few different ways of working that.
But you want to show that dealership loyalty is down.
There are ways to get people to come back that are nontraditional.
Credit card points is a model that has worked in many other industries, especially hotels and airlines, where you do have these once- or twice-a-year lower recurring purchases, which is your maintenance on it.
So really going to the dealership and saying, “Hey, this model has worked.”
There’s a reason why every flight you’re on, you’re offered an airline card.
Every time you stay in a hotel, you’re offered a hotel card.
Even traditional retail.
You go to a lot of these stores and you’re offered credit cards because it’s an incredible way to increase loyalty.
It’s also an incredible way to gamify it.
Dealers can also now have a better connection with their customer through the Fasten card and say, “Hey, Mary has 150,000 credit card points. It’s time for Mary to get her brakes changed.”
Now traditionally, dealers will just send you a postcard.
Now they can say, “Hey, come on in. Basically get these repairs for free.”
Now that’s a way for you to come into a dealership instead of going to a local mom-and-pop auto body shop or repair shop.
Yeah.
I’m kind of curious, thinking more of the app, but the language that you’re using for the consumer.
What kind of tone are you taking?
Yeah.
It’s driving in America.
It’s meant to be fun.
These moments when you’re in the car with your kids and you’re on the open road.
Everyone loves a good road trip.
I think it’s about tapping into that.
You want to be fun and you want to have people be free.
There are kind of two types of credit cards.
There’s cash back and there’s aspirational.
We definitely lean into that aspirational style, which is more the travel, the open road.
But also letting people understand that our prime value prop is that you’re spending the money.
We’re a zero-to-one, as far as I know.
There’s no one else that’s rewarding you for your auto loans and leasing besides your Fasten card.
There’s no one credit card that’s really rewarding you, giving you bonus points, for all of that auto-related spend except for the Fasten card.
Maybe if you have a 15-year-old, we might be your card for everything.
But really in perpetuity, we want to be your card for all of that auto-related spend, which is $500, $600, $700 a month on top of your auto.
I guess Bilt is just my brain, but I know they do a lot of different things, like build their community or, here’s a special event that you can participate in as a member.
I’m curious, what are your ambitions for fostering a Fasten community?
Should you have that?
Yeah, that’s a great question.
We actually are already in discussions about what we can do, having programs.
There are things you’re going to be able to redeem for beyond just your dealership or for travel.
There are these amazing race getaways that you can do to F1 races around the world or NASCAR races around the world, and you’ll also be able to use your points down the road.
That’s the goal for the Fasten card.
We really want to be doing things like helping you with your monthly parking or your gas, but also having ways that we can help people pay off their auto loans and really help with that affordability.
Have raffles or have things.
Bilt’s built a great company.
They’ve got a lot of loyalty down.
But there’s a whole other category in auto-related attractions and events that we can really dive into.
The world is our oyster.
I think also we could do it in the travel sense.
Traveling is not only hopping on a plane.
Traveling is road tripping across the country with your friends.
These are things that we can help and set up experiences for.
I’m really curious because it’s something I like to talk to entrepreneurs a lot about, but just such a remarkable year in terms of everything, really.
We’ve mentioned the tariffs.
Certainly uncertainty seems to be the word that is used most often with the economy.
But you’re building a startup.
Never easy.
Never easy.
Never easy.
Yeah.
There’s a bit more chaos here.
I’m just wondering, one, how do you stay grounded?
And how do you see, because I know it’s like having this plan in place, but the macro forces are totally a gamble.
Yeah.
So I think to answer your first question, staying grounded, I mentioned in the beginning, but my wife was three months pregnant when I told her I wanted to start this company.
Now I have a 13-month-old.
What it comes down to is, you could be having a stressful day, but the baby is kind of your top priority.
My top priority.
So I make sure that I block off my calendar in the morning and in the afternoon to make sure that I have time with the baby when I’m not working.
Then when she goes to sleep, I can get back to work.
But making sure that I have that family time every day is a real key priority for me.
Also, just with the uncertainty, prices might go up.
But we’ve already in the past been dealing with inflation, and whether the tariffs stay or whether they go, the cost of cars is probably not going to go down.
Inflation generally only goes one direction.
Costs generally only go one direction, and things don’t generally go down.
Whether the price of cars goes up 2% or 20% or somewhere in between, the cost is something that consumers are going to be spending money on.
I keep saying it to my team, but in general, people are spending the money anyway.
They really might as well be getting the points.
Because now you can go and use those points in a million different ways, and you’ll get rewarded in ways that you’ve never been rewarded before.
Jacob, what kind of borrower are you targeting, especially at the early stage of the launch?
So we’re Prime Plus.
We’re going after Prime Plus, people who like to have multiple credit cards.
There are other products out there for subprime, but our initial launch is Prime Plus.
Okay.
Yeah, I’m seeing that now.
I’m also curious about your experience within fintech and payments.
What brought you originally into the fintech world?
Yeah.
So I’ve always been in early-stage tech.
I was in edtech.
Very luckily, I was the 12th employee at a unicorn called Newsela, which, if you have kids in elementary or middle or high school, you’ve probably heard of it.
But then I co-founded a company in the medical device space that unfortunately did not go the way that I would have hoped.
But honestly, everything’s a really good learning experience.
In the moment, things can be stressful.
In retrospect, they’re great.
So when I was figuring out what was next, it was COVID.
I was stuck at home like everyone else.
Then I got brought on as the second employee at Forage, which is a payment processor for SNAP and EBT.
So we were basically the tech.
Yeah.
So that really brought me into the fintech world.
I was the second employee there.
The company went through Y Combinator, raised a good Series A.
I led sales for two of their largest customers, which is Thrive and Gopuff.
Then, at a certain point, I looked at my wife and I was like, I think I want to be a founder again.
I think it’s just something that’s in my blood.
I come from a pretty entrepreneurial family.
At a certain point, you’re like, hey, your mind starts racing.
You’ve got a good idea.
There’s no time like the present.
Might as well just go for it.
Yeah.
No, that is a true entrepreneurial state of mind.
Or requirement.
Or requirement.
Yes.
A lot of the ideas aren’t always great.
But when you find one that you really like and you think, hey, you want to go run with it, you go run with it.
That’s kind of where I was.
We were all stuck at home with COVID and figuring out what we were doing.
I kind of threw out this idea, and it seemed to make sense.
Yeah.
So you identified the points in auto as a gap.
But broader than that, what do you see in payments broadly?
Is there anything really striking your fancy?
Oh, this is interesting, either another startup or a pilot that you’re seeing?
Or, on the other hand, you’re like, oh, this also needs to be fixed.
You know, I think, as I mentioned, some of Bilt’s C-suite are investors in us.
Their COO and their CCO.
They’re moving into mortgages.
I love this idea of having these recurring payments that you are getting rewarded for.
Beyond that, I just think cross-border payments are incredibly interesting.
But I also think it’s a lot of the back-end tech.
Fraud is always, especially with a product like ours, fraud is always a moving target.
AI in many ways is going to change the world, but I also think the speed to market with AI is also changing the world.
What used to take a company about a year and a half now could take a company three months.
But that also means that it takes the people who want to commit fraud even quicker as well.
So a lot of these AI companies dealing with this incredibly fast-moving target of fraud is something that I have a lot of interest in, especially just the nature of our business.
Yeah.
I believe it.
That is something I know the whole industry is very curious about, fraud and its ever-evolving ways, and how to hopefully get in front of it.
Well, one last question for you.
But before I do, open it up to you.
If someone wants to reach out to you or get in touch with you, how should they do that?
Also, any closing thoughts you wanted to make sure to mention?
Yeah.
My name is Jacob Zach.
I’m the only Jacob Zach in the entire world.
So you can find me on LinkedIn or Jacob at Fasten.cc.
Get in touch.
We are really looking forward to seeing where this thing can go.
Especially as the price of cars really is in flux, we really want to care about how people are spending their money and making sure people are getting their money back, getting points back.
But I think we are in a kind of crazy world.
Whether it’s tariffs or before the tariffs, cars are part of the American psyche.
Whether you are a car person or not, you’re always going to need a new car.
You are always going to be having your next car, whether it’s you, your kids, your spouse.
Even if it’s 10 years down the road, it’s 10 years down the road.
There are still ways to be rewarded.
I think people are going to see that rewards are going to come in really awesome ways in the future, and we’re really excited to be at the forefront of that.
Well, again, congratulations.
One last little question, which is, what’s the image on your phone’s lock screen?
Oh, my baby.
Your baby?
I was like, oh, it’s going to be a car.
Yeah, the baby.
The baby.
Don’t tell my wife.
Then if you unlock it, the dog.
Oh yeah.
Well, you know, the dog is important.
Yeah.
Yeah.
I know.
It’s 13 months.
Best 13 months of my life, even with all of the stress of being a founder.
I really honestly and truly mean that.
Well, congratulations on all of the above, and thanks so much for being on Money Isn’t Everything.
It’s been a real treat to be able to catch up with you.
Thanks for having me.
Okay.
So one thing that really stood out to me is the need to block your time for your biggest priority.
I think it’s really cool for Jacob, it’s his baby, because that sounds right.
So I’m taking that lesson away for me from today’s conversation.
I hope to see you two weeks from now because I’m in conversation with Ben Hoff, who’s the founder and CEO of Atticus.
This is a fintech startup that’s building an inheritance platform.
We talk about the way inheritance might change as Gen Z ages and also why you can gift Atticus instead of, say, send someone flowers during a funeral time.
Catch you then.
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