Cardless Challenges Banks’ Grip on Co-Branded Cards With $60M Round

Cardless has raised $60 million in a Series C round led by Spark Capital to scale its embedded credit platform, positioning partner brands such as Coinbase and Bilt to take greater control of co-branded card programs traditionally dominated by banks.

The fintech isn’t just raising capital — it’s challenging the way co-branded cards are built: Brands now have tools to launch and manage cards without relying on the bank-led playbook. 

Coinbase and Bilt are already partners, and the pitch is straightforward: let the brand control rewards, UX, and underwriting inputs for a tighter customer experience.

That matters because banks have long owned the co-branded economics. Cardless shifts that balance, giving brands a greater role in shaping the program. The result is a redistribution of influence, altering who controls the customer relationship and shaping long-term economics for issuers.

Cardless’ raise is a reminder that the co-branded landscape is moving quickly. Incumbent issuers now face competitive pressure as brands manage rewards and customer engagement directly.

Embedded models also change credit risk frameworks, since first-party data feeds into underwriting and alters traditional assumptions. At the same time, banks must modernize operationally — APIs, modular rewards engines, and shorter product cycles are now critical.

Michael Spelfogel, President and Co-Founder of Cardless, told us, “This funding allows us to scale faster with partners like Coinbase and Bilt, while bringing new brands onto the platform. For too long, legacy players let this ecosystem stagnate, leaving businesses and consumers with fewer choices and weaker rewards.”

He continued, “Cardless flips that model: our embedded platform gives brands more control, better economics, and the ability to deliver rewards their customers actually want. This new raise positions us to meet surging demand, expand our team, and help leading brands launch the next generation of financial products.”

Customer acquisition is also shifting. Brands that embed credit into apps and loyalty programs make the card feel like part of the product itself. That reduces the draw of bank-led, co-branded programs. Profitability is under strain where rewards are rich and interest income is light.

Wells Fargo’s experience with Bilt’s rent rewards program — where high redemption rates and limited interest income created losses — underscores how quickly margins can come under pressure when novel reward structures gain traction.

Regulators are paying attention. Embedded finance complicates responsibility and disclosure, which can trigger scrutiny. Issuers need stronger controls and clearer contracts with brand partners.

Still, there is upside for those willing to adapt. Proactive issuers can capture new revenue streams by partnering strategically or building their own embedded platforms.

If Cardless’ model scales, co-branded launches will likely accelerate across retail, travel, fintech, and lifestyle sectors. Issuers will need to shorten product cycles, as slower launches become a liability. Rewards and loyalty programs will grow more creative, benefiting consumers but putting additional stress on margins.

Compliance and fraud risk will increase as unconventional spend types, from rent payments to crypto rewards, and new partners enter the ecosystem. This will demand stronger fraud controls and better data-sharing frameworks between brands and issuers. 

At the same time, customer experience will become a central competitive battleground, with smoother onboarding, deeper personalization, and tighter loyalty integration.

Issuers cannot afford to wait. Investing in modular technology, sharpening underwriting analytics, and treating brand partnerships as strategic choices with clear economic tradeoffs is essential.

Co-development with fintechs can make sense, but issuers also need to consider building their own APIs and rewards platforms — a direction some banks are already exploring quietly.

Those who delay may find their most valuable brand partners have already taken control of the customer relationship. In that scenario, banks risk being left with backend responsibilities but little of the upside. The smarter move is to decide now whether to lead, partner, or follow — and then act.