Covid Shows the Cracks in the Old Credit Card Model, Says Tymit CEO, Martin Magnone

First of all, how are you and your family doing in these COVID-19 times? 

Martin Magnone: Good, thanks for asking. My wife and I had a baby during Covid, so not being around family has been especially challenging, but we’re holding up well. It’s certainly been a year of big changes!

Tell us about you, your career, how you founded Tymit.

Martin Magnone: I spent years at Bain working with the leaders of credit card companies in the US, and that gave me a front-row seat for understanding all of the customer pain points we’re solving at Tymit. I saw how inflexible the revolving credit card was, how it didn’t encourage good spending behavior, and how its lack of transparency and control often led to customers winding up in unmanageable debt. It was so obvious it needed to change, but the big banks had no incentive to transform one of their main profit engines. So I decided to relocate to the UK and team up with my brother Nico, a payments veteran, and Juan, who has a background in private equity. Together, we founded Tymit to make credit more flexible, safe, and honest. 

How does Tymit innovate? 

Martin Magnone: Our approach to innovation is pretty straightforward, and it’s guided by two principles. First, always start with real customer problems in the market. Second, reinvention over repetition: we like to break things apart and start fresh rather than skirting around the edges making incremental changes. So, if you look at what we’ve done, we’ve totally recreated the credit card experience around a new lending model. That’s all been driven by a mission to give the customer more transparency and control over their borrowing. 

How the coronavirus pandemic affects your business, and how are you coping?

Martin Magnone: We’ve been impacted in pretty much the same way as the traditional credit card industry. Consumer confidence has taken a knock over the course of the pandemic, so spending is lower. There’s been a bump in repayment activity, with some customers using extra cash to pay off their borrowing, but we’ve also seen some users in need of a bit more financial breathing space. That’s why we recently launched 36-month installment plans – to give our customers even more flexibility. 

Did you have to make difficult choices, and what are the lessons learned?

Martin Magnone: As a team, we’ve adjusted quite well to going remote, and thankfully we haven’t been forced into too many difficult decisions off the back of the pandemic. We think Covid has taught a lot of companies a few lessons about being prepared for the unexpected, but at Tymit, we learned that lesson twice! We were hit by the Wirecard collapse in June. We came out the other side, of course, but it was a bumpy ride. We have a strong team with lots of experience, so that’s helped us handle the added challenge of migrating to a new card issuer – in record time and while sustaining high levels of growth.

How do you deal with stress and anxiety?

Martin Magnone: It’s the obvious answer, but you really can’t beat exercise for stress relief. I’m also in the lucky position that my brother, Nico, is one of the co-founders of Tymit. Knowing that you can share some of the stresses of leading a fast-growing startup with a close member of your family is a major relief too. 

Who are your competitors? And how do you plan to stay in the game?

Martin Magnone: Big Credit, the banks and providers that dominate the traditional credit card market, are our main competitors. They might be some of the giants of financial services, but we’re confident because we have a much better product. We offer the kind of flexibility, transparency, and control they can’t match. Tymit customers can see upfront costs for every purchase and spread the payment over 3 to 36 months. And they don’t have to worry about getting into out-of-control debt because they always have a clear and affordable plan to repay their balance. 

We’re also in the running against the newer ‘buy now, pay later’ players. There’s some stuff BNPL gets right – like flexible payment planning and upfront costs – but it creates its own problems too. BNPL customers don’t get a consolidated view of what they’ve spent, which has seen some run into trouble when it all comes due. It also plays on impulsive spending and doesn’t offer any kind of features for users to see if they can really afford what they’re buying. Tymit picks up where BNPL falls down by offering installments anywhere, not just with specific merchants; showing how each purchase will affect a customer’s bill; and providing total visibility with an all-in-one view of spending. 

Your final thoughts?

Martin Magnone: Covid has revealed the cracks in the traditional credit card model, and it’s painfully clear now the market needs to change. Revolving credit is just not consumer-friendly: it’s near-impossible to predict the real cost of borrowing, you don’t get a plan to repay, and it’s not transparent. It all adds up to a lack of customer control. Add to that the financial stresses of a pandemic, and you see it just can’t go on. 

The problem is that Big Credit doesn’t have the incentive or capabilities to change it. But that’s what Tymit is here to do. 

Your website?

http://www.tymit.com