Zed garners Filipino interest with no-fee credit card

Zed targets to expand credit access in the Philippines.

As the first Philippine neobank licensed by the Central Bank as a standalone issuer, Zed is making waves in the financial sector with nearly 50,000 people on the waitlist, and is gaining significant interest among Filipinos, particularly young professionals who struggle to access traditional credit cards.

Danielle Cojuangco Abraham, Co-founder and CEO of Zed, highlighted the unique features that set Zed apart from traditional issuers. "Zed is a MasterCard, titanium credit card that has no fees, no revolving interest, and an app with powerful, first-to-market features like single-use virtual cards," she explained. 

She added that this approach reimagines the credit card for the next generation, addressing the challenges faced by young people in obtaining credit. In the Philippines, where only 8% of people have a credit card, the lack of access disproportionately impacts those without established credit histories.

Zed addresses this issue by evaluating a user's current and potential income, along with other relevant data, rather than relying solely on traditional credit scores. "We're analysing a user's current and potential income along with other relevant data," Danielle said. This allows young professionals to build credit responsibly and receive fair access without being restricted by outdated criteria. 

Supporting a no-fee, no-interest business model is challenging, but Zed has found a way to make it work. "Our revenue comes from interchange fees, which is a standard network fee that all banks collect from merchants through MasterCard," Steve Abraham, Co-founder of Zed, explained. 

Zed's status as a non-bank credit card issuer licensed by the Bangko Sentral ng Pilipinas (BSP) offers additional advantages. Steve said that this licensing provides Zed with greater flexibility in delivering features and maintaining control over the customer experience. By not relying on partner banks, Zed ensures a secure and consistent platform for its customers. 

The scrutiny fintechs face globally regarding their dependence on partner banks has highlighted the importance of being a licensed institution. "The licence also means that our customers can trust that we're supervised, regularly examined, and also held accountable to the regulations by the BSP," notes Abraham. This regulatory oversight assures customers that Zed meets the same standards as traditional banks in terms of financial product management.