August 9, 2022
Product
2
 min read

How does Yonder make money?

Priscilla Low
Priscilla Low
Senior Finance Manager

It’s always a good idea to know how a business makes money, so you know just how you’re paying to use their service. You’re not always paying with your wallet either. Companies like Facebook and TikTok make money with ads, so really you’re paying with your attention to use those services. You know what they say, nothing in life is free!

Many credit card businesses have typically made most of their money by encouraging you to carry a balance from one month to the next, without really encouraging you to pay it all off. Meaning you end up paying more interest than you need to. That doesn’t sit right with us. So we’re doing things differently.

A lot of credit cards charge a whole bunch of different fees such as foreign exchange fees, late payment fees, ATM withdrawal fees, credit over-use fees, or add sneaky hidden markups to the exchange rate. Not us! We want customers to have an incredible experience by being as transparent as possible, stripping away hidden fees and charges.

We make money in four ways

  1. By charging a membership fee
  2. By receiving interchange fees from Mastercard
  3. By lending our customers money (interest)
  4. Through partnerships

Membership fee

We charge a flat membership fee of £15 a month for using our card, and we’ll likely add in an annual payment option soon for members who prefer to pay once a year. A membership fee allows us to cover most of the costs we incur to offer you all your member benefits.

Charging a fee is a fair and transparent value exchange for the benefits we offer. It helps fund an incredible membership experience -  allowing you to get access to a wide range of benefits. Most importantly, it means we're not reliant on interest revenue as our primary revenue stream, like a lot of credit cards are. Being overly reliant on interest revenue creates misaligned incentives that do not benefit the customer and can create stressful debt.

Interchange

What is interchange? Because customers don’t pay this fee, it’s likely you’ve never heard of it before. When you use your card in a store, we receive a tiny percentage of that transaction for helping make it happen. This is called interchange. Don’t worry, you’re not paying for this.

Every time you make a transaction through Mastercard, a small fee that gets taken off the purchase price. This fee is then split between Mastercard, the merchant bank and the company that issued the credit card (that’s us).

On average, the interchange fees that come back to Yonder is around 0.3% of the transaction amount in Europe and up to 2% overseas.

Interest

This only happens in situations if you don’t pay your full statement balance.

We believe in interest payments that make life more affordable and accessible. You can use your Yonder card to pay for big things at a pace that suits you. We’ll take a small amount of interest from you in order to lend you that money. We’ll never encourage you to fall into a cycle of debt.

Our billing cycle runs by calendar month and you’ll get your bill for the month on the first day of the next month. This bill is then due on the 15th each month. If you pay off your full statement balance for the month by the 15th, you don’t get charged interest - as easy as that.

If you choose to roll some of your bill from one month to the next, you’ll get charged interest because we’ve lent you that money. Interest is a percentage of your credit card statement balance. We’ll always be crystal clear about how much interest you are paying in pounds and as a percentage.

Partnerships

We work with partners across London to offer you amazing rewards at the restaurants, bar, gigs and events you love. We may have agreements with these partners that mean we receive some revenue when our members dine or shop there. Our customers won’t pay these fees, but it’s important to know that this is partly how we make our rewards program work.

Priscilla Low
Priscilla Low
Senior Finance Manager