Why Bilt’s CEO Wants You To Pay Your Mortgage With a Credit Card

0:02Encore Jane is a serial entrepreneur whose latest venture has become a darling for promising something once only dreamed of, earning loyalty points when paying rent. Anyone who is a credit card point aficionado has probably thought about paying rent with a swipe of a card. After all, for a lot of people, it's their largest monthly expense. But most landlords don't actually let you do that, or at least they didn't. And you know, it's funny because it's one of those things where you just people have totally taken it for granted. And yet it's the one category that hadn't really been modernized to the way that the rest of the payments ecosystem has evolved.

0:39But the promise of Built Technologies, founded in 2019, was just that. Since then, Jane has had a celebrity-filled marketing campaign across social media, like this video with Martha Stewart. You are also a Built member. I am because I pay rent and I earn points. And why not? Or this one with Paris Hilton. What is one thing that an icon must have? Status, of course. Loyalty points, status for rent is a great hook for a financial startup. It's attracted investment and given Bilt a valuation of$3.1 billion. It's also attracted some big name backers, including Ken Chenault, former chairman and CEO of American Express.

1:23But there are questions about how financially viable Bilt's vision for the future is. Our colleagues at the Journal reported last year that a deal with Wells Fargo for Bilt-branded credit cards was losing the bank money, as much as$10 million every month. Partly because Wells had bet on customers carrying balances, earning the bank interest. Instead, Bilt members quickly paid them off, suggesting they were savvy about collecting loyalty points, but not using the card enough for other things to be a good business just yet for Wells. At the time, a Wells Fargo spokeswoman said it takes multiple years for new cards to pay off, and the bank wants the partnership to be a win for both Wells and Bilt.

2:06Still, the deal appears to have been a boom for Bilt, helping attract customers, revenue, and investor dollars. The startup is privately held, so it does not report its finances, though Jane tells us it was profitable in 2024. Jane's vision is three parts. One, running a payment system for apartment complexes. And he says Bilt has already signed up more than 70 % of the top 100 biggest multifamily rental companies. Two, replacing the flyers and menus that shops and restaurants slide into mailboxes and under doors by building a rewards program for neighborhood businesses. And three, getting loyal young customers' attention with its co-branded Wells Fargo credit card.

2:50With cards or any financial product, there's a higher acquisition cost that gets paid off over time. That's number one. But, you know, the hardest part was can you actually build a new product that didn't exist and see that people actually are excited to sign up, which was exciting, which we've now proven through our distribution.

3:12From the Wall Street Journal, I'm Christopher Mims. And I'm Tim Higgins. This is Bold Names, where you'll hear from the leaders of the bold name companies featured in the pages of The Wall Street Journal. Encore Jane has brought a dream to life for many apartment renters. Today we ask, is it sustainable?

3:31Encore Jane, thanks for joining us today. First off, for those listeners who are maybe over the age of 35 and not on TikTok, seeing your ads, which I just saw one the other day. I think it was you and Martha Stewart. What does Bilt do? So at its core, we started Bilt to reward people on their biggest monthly expense, which is rent. And, you know, it's funny because it's one of those things where you just people have totally taken it for granted. But you spend 30, 40 in some cities, 50 percent of your income on housing costs every single month. and yet it's the one category that hadn't really been modernized to the way that the rest of the payments ecosystem has evolved.

4:15I mean, if you're under 35, the only reason you probably have a checkbook still is for rent. So can you digitize that and can you do what other payment worlds have done and bring rewards into the experience? And we look at rewards saying, one, I can get points and miles when I buy someone a round of drinks at a bar. Why can't I get airline points or airline miles or hotel points when you pay your rent every month? Two, if I'm paying my rent on time every month, why does that not build my credit? I mean, I pay my mortgage, that builds your credit, you pay your rent, it does nothing for your credit.

4:49So can we change that? And three, can we actually use renting as a pathway to homeownership and start to say that paying your rent every month moves forward? So that was what we started with. Today, built at its core has become like the toast of housing. So we have built a purpose-built payment solution for apartment buildings and rental homes. We handle everything from ACH payments to even the legacy checks and cash through to debit and credit for these apartment buildings. And for the first time, we reward customers every single time they pay their rent on time. So the value proposition, it makes a lot of sense if you're an apartment renter as I am.

5:32I live in a building where I've got to walk the check down to a little slot and give it to the lady. And I think in large part, a lot of buildings didn't want to go to credit cards because of the processing fees, right? It's two, 3 % out of their pocket. And they're always looking for ways to save money. So how did you, you know, I'm just curious, you know, how you were able to kind of break into that. Going back to the three businesses that we're in, And core businesses really think of it as toast for housing, payment processing for the housing. On top of that, we built a leasing solution so that property managers who are spending tens of billions of dollars a year on incentives to sign leases, renew leases.

6:12If you rent ever in San Francisco, for example, you might be familiar with sign a 12 month lease, get a month free or get a$500 gift card when you refer a friend, that kind of model. We've now turned that into a, they issue their incentives through built. And the third business is our neighborhood commerce business, right? So local merchants trying to reach customers in nearby apartment buildings, condo buildings, et cetera. So those are the three businesses. On the housing side, you know, there was actually, you know, most institutional owners had started to move towards basic digital payments, right?

6:48App folio, these sorts of things, right? Click Pay is another example. Yardee Payments is another example. And these businesses are kind of very much a transactional platform. It was come in, back office, enter your bank account number manually and make a payment. They accepted debit and credit cards. So all of this existed and landlords were paying for this payment processing, but there wasn't value add beyond payments. And so when we went to property owners and managers, we said, hey, here's a new payments platform for the same price. We will A, give some of the margin we make back to the customer in the form of rewards.

7:31And in doing so, we are able to build a broader customer-based ecosystem where now when you're issuing a month of free rent, let's say, and you do that through build, we'll offer you, Tim, a month of rent as you sign a lease, or you can choose to get 250 ,000 miles plus$50 of dining credit a month in your neighborhood, plus a complimentary lift ride to and from your home every month to the office. And you can choose what type of incentive you want, which helps them close leases faster. And when you're closing, when you choose a rewards option, part of that is merchant co-funded on our side. And so we can actually save the property manager 5-10 % while creating more value for the tenant.

8:15So a key partner for you to do this is Wells Fargo there. You're not a card issuer, they are. You have a deal with them that dates back to 2022. And you know, as our colleagues at the Journal reported, that bank agreed to some pretty generous terms with you, right? Paying you$200 every time a new built credit card is opened, 0.8 % of each rent transaction. But the journal's reporting has found that Wells wants to renegotiate that. So how key is that deal to your profitability now? People often misunderstand us to be a credit card company or that type of industry. We have a co-brand card. And for those listeners who may not know what a co-brand is, think of it like when you go to Gap or you go to Sephora or you go to any of these retailers, you can earn extra rewards or extra benefits when you get their co-brand card, right?

9:13So that's the relationship we have with Wells Fargo. So we work as a payments business with American Express, with Visa Master Card on the network side. We work with Bank of America, Chase Bank, Wells Fargo. We work across all the major banks to help them get more housing spend onto their issuing cards or payment rails. So that's number one. One of the strategies there was to create a co-brand benefit. So you could say, you know, if you get the built card, you get special benefits when you pay your rent with it. Right. And so just to give you some context of how those partnerships work. Today, about 15 % of our customers get our co-brand card.

9:55So if you had to compare yourself to a predecessor, what kind of company are you trying to become? Are you trying to become Square, but for this, right? Or, you know, Braintree or one of these other ones? So the last year and a half, we were very fortunate to have Ken Chenault join me to help build this company. Ken Chenault was the CEO of American Express for 20 years. And what American Express really pioneered that I admire is they built a network of merchants, right, to facilitate, in that case, payments centered around, in their case, of credit card products. We believe there is such a big opportunity for us to first build our core business, kind of like Google has built their AdWords as their core business, if you will.

10:43Our core business, I think, again, is payments for housing, right? So if we can be like toast for the housing market with$2 trillion a year of spend, that is a really strong core business. If around that, we can then build a merchant network, similar to what American Express has done, that continues to connect local businesses with a channel marketing partner to reach people in these apartment buildings. The value creation there for the merchants, for the customer, and for the property managers is huge. And part of the magic here is if you're a local business to reach people at apartment buildings, it's been really clunky, right?

11:19They put up a flyer saying, get 10 % off when you come to our restaurant down the street. Right, the flyers slid under your door in the middle of the night for free pizza or whatever. Yeah. It's really hard to track. It's a lot of ground effort. And so we said, what if we just created a rewards ecosystem where through Build, they can now reach every local resident at all of our apartments and condo buildings. from the moment they move in with benefits and rewards that we create and fund. So you get 3X rewards at say a pharmacy near you. And if you buy things at Walgreens, which is one of our partners, we will automatically find anything in your receipt that's FSA or HSA eligible.

12:01And you have the option to have us file that with your health plan for you. So we're creating better commerce experience when you choose to spend at our local partners. Partners pay us a commission for driving that spend. We use most of that to fund rewards. And then the remaining profits we actually share with the property. Okay, so it seems like Jane has used his deal with Wells Fargo to gain attention for Bilt, along with locking up the top rental buildings with his payment system. What's next? For most cards that have such a diverse population set, you have different tiered products, right?

12:35American Express, you have kind of the green card, the gold card, the platinum card. We're working now with our members to create a card 2.0. Stay with us.

12:55Encore, one of the things I think was kind of interesting about the assumptions that Wells made getting into this deal with you was the economics. Some of our colleagues at the Journal have reported that Wells thought that they were going to make their money because people were going to hold the balance month after month and the bank in turn was going to make interest off of that. Instead, it seems like early on at least, built customers have been very quick to pay off those balances. So I guess I'm wondering what that says about built customers. So number one, if you talk about our core customer base, we reflect the rental population fairly representative.

13:36And so if you look at even by city, our mix is based on the footprint of these large property managers. And so we're probably within 100 or 200 basis points of any given MSA in terms of our user base mix. It's primarily renters who are 21 to 35 or so, young professionals who are renting. and that's our core kind of market. So this is a sweet spot customer that a lot, whether it's a merchant or a bank, people are trying to reach. Number one, in terms of co-brand economics, I think it's important to also look at the standard deals in the market and what we did right and what we did wrong, right?

14:13So if you look at any major retail co-brand, whether it's an airline credit card or a gap style card, you typically have a bounty, a signup bonus, spend economics, and profit share. And so if you take a look at, say, an airline credit card that gives you 50 ,000 miles when you sign up for the card, that costs the bank about$500 on acquisition. They also pay a bounty. They also pay on spend. And they then do a profit share on the back end. So that's the general structure of all co-brand cards. When we launched this co-brand, we talked about this a little bit in my member letter. I don't think any of us fully appreciated how wide of a population this was going to appeal to, which is an exciting kind of accidental breakthrough.

15:07And so for most cards that have such a diverse population set, you have different tiered products, right? If you're familiar with American Express, you have kind of the green card, the gold card, the platinum card, all with different value props, different benefits, different annual fees and different structures. Right. We're working now with our members to create a card 2.0. So wait, card 2.0, is there going to be like a black version and a green version like with American Express? Something made out of tin or metal of some sort. It's really heavy in your wallet. Can Tim carry the metal one and pay his landlord with that one?

15:43You know, look, maybe we'll build it off of, you know, there's any number of different variations, but I think the core of it that we are exploring is this idea of a tiered segmented product because we now have a fairly large user base. So even 15 % makes up a fairly large number of cards, which has been really exciting. And for, you know, an issuing bank to reach this type of young population at this stage in their life and be able to have that relationship is super valuable. Launching a new card takes multiple years, right? You're building a population of people. And maybe we are seeing some of the early figuring it out is kind of what you're talking about, right?

16:25With cards or any financial product, there's a higher acquisition cost that gets paid off over time. That's number one. But, you know, the hardest part was can you actually build a new product that didn't exist and see that people actually are excited to sign up, which was exciting. which we've now proven through our distribution? And then two, can you then just figure out what the right product construct is to make sure everybody wins long-term and sustainable way? And again, it's not really rocket science, right? These are fairly well-trodden formulas. And the big takeaway here on Built Card was, hey, you've got a really diverse card population.

17:03We've got to have tiered products and segmented products for different user types to make this thing work for everybody, for every user type. Right. So, I mean, you're kind of getting at this point about how you're kind of expanding your empire a little bit. Right. And one of the more recent things you're getting into is allowing your users to pay their mortgages with their credit card, which is like another area that has traditionally not been something you do. You know, what was that fight like and why, you know, how were you able to kind of create that rail? I presume it was some of the same rails you already were using.

17:36Just to clarify, it's not about using your credit card for mortgage. It's about can you get rewarded on mortgage, right? And also not avoiding those fees too, right? I mean, there's services out there that would allow you to use your credit card to pay mortgage, but you might get charged a lot for it or not a lot, but a percentage or two. This year, we will be rolling out for a significant part of American mortgages where, just like when you move into an apartment building, one of the first things you'll see as they say, hey, go create your built account to pay your rent. Right. That's how you pay.

18:07It's the only way to pay your rent, these properties. And you get rewards for it and you get benefits for it. We call it neighborhood benefits. Right. Same concept with mortgage. There are a lot of these mortgage servicers who have been using kind of legacy payment systems. And how can we say when you use BILT to make your mortgage payment on time, you get rewarded, you get access to neighborhood benefits, you get value as the customer. And by the way, your mortgage servicer is also now generating new value out of what was historically just a cost center for them. If Built has big ambitions, it's because Jane has long had big dreams of his own.

18:47His father was also an entrepreneur who worked at Microsoft and later founded Infospace, a tech company that rode the boom and bust cycle of the dot-com bubble a generation ago. As kids, you know, we grew up watching them put everything on the line, two times over, to go build these companies, which you can really only do in this country. That's next.

19:13Nach der Krise beginnt nicht die Ruhe, sondern die Veränderung. Es läuft wieder, aber anders als früher. Wer scheitert und wieder aufsteht, führt anders. Das zeigen uns Betroffene, Berater und Experten. In Folge 5 von Endstation Insolvenz geht es darum, wie aus einer beinahe Pleite echte Stärke entstehen kann. Jetzt reinhören. Im Podcast-Kanal Gute Geschäfte von Kreditreform. Überall, wo es Podcasts gibt.

19:56you come from a family of entrepreneurs. You talk about that. Um, you know, I probably have known you longer than anybody in the business press in terms of when we first encountered each other, you know, at, at 23, 24, you know, I was very impressed at your singular focus, but I'm curious where that came from. You know, my parents are immigrants to this country. They came in the 80s. My dad was born in a poor village in India and was lucky enough to get access to, at the time, an H-1B to come to this country and work, at the time, Burroughs mainframe computing, right? And over the years living in this country, he and my mom had an opportunity to live out the American dream and go from nothing, and they worked hard and they got lucky and were able to one day end up working at Microsoft, which gave them their first kind of start.

20:54And then he left to start, you know, his own company. And as kids, you know, we grew up watching them put everything on the line two times over to go build these companies, which you can really only do in this country. And I'll tell you, like, if you remember, Mims, when we first met, like one of the guiding principles on some of the companies I was working on in college and out of college was this frustration that, you know, they had the ability to come from another country to the United States and build this American dream. But now I was seeing friends of mine who were born here, had done everything right, but you come out of school and we were 22, 23, 24, and you could barely make it paycheck to paycheck because your student loans were so outrageous, your car payments outrageous, your health insurance is outrageous, your rent is outrageous.

21:43Like, It just doesn't make sense. And so, you know, I'm not saying that we can solve all these problems, you know, as any one company, but I do think that you have to start looking at these as private sector failures in the market when people are paying more and getting less. Right. And so if you can just bring competition into how do you deliver housing, health care, student loans as a innovative technology company, just like any other category, then hopefully we can find ways to create more value for customers, reduce costs for customers. You sound a little bit like a politician. The rents are too damn high, entrepreneur.

22:22But I do want to pull a thread that you just brought up. You, as a kid, saw the importance of the H-1B visa process that allows high-skilled workers to come into the U.S. That is a topic of hot debate in the tech industry. And I noticed that you had been amplifying some of Elon Musk's positions on the X social media platform that he's been advocating for increasing that legal immigration. How do you feel like the tone or the tenor of that debate's been going? I don't actually think this is as big of a thing. I don't think there's as much disagreement as it made it out to be on X at that time. I think there's a misunderstanding.

23:05I think Trump's movement and the left's movement all believe in legal immigration. legal legal immigration it's really important i think even immigrants in my family included have a problem with illegal immigration we work my parents waited on a list they worked hard they got an opportunity to come to this country legally right and they've created countless jobs you know i am working hard to create jobs and value for people here i think that is what that is what this country has always been about um so i i think there was a lot of trolls and a lot of noise on X, but it did piss me off to see. I think that is very anti-American to be anti-legal immigration.

23:51And I think most people in this country do support bringing the best and brightest from all over the world legally to here to help create economic value for all of us. I feel very strongly about that, obviously. It's very personal. But the key is how do we create value for this country? And we're not going to win as a country if we don't have the best and brightest here working. I want the smartest people in the United States building the best technology, building the best AI, building the best platforms so that everybody benefits from it here in the United States. Given that you feel so strongly about it, have you gotten involved in any way?

24:25I know Mark Zuckerberg in years past was big about promoting and funding a nonprofit that was devoted to legal high-skilled immigration. Do you have a connection to any of those efforts? I believe that through the private sector, you can have meaningful impact on a lot of public policy, right? In fact, probably more impact on public policy these days through the private sector than you can being in the bureaucracy, right? And so anyways, short answer is yes. I've spent a lot of time with congressional leaders, the White House, local leaders on this topic and others. I plan to continue engaging probably in a less official role or prominent role than some other tech leaders have chosen to take.

25:15That's a personal preference. But I do think that there is a big opportunity, especially with this new technology boom that the US is leading today, to be at the forefront of a lot of good public policy. That's probably a good place to thank you for coming on today. Encore Jane, we appreciate it. So much for having me, guys. And that's Bold Names for this week. Michael LaValle and Jessica Fenton are our sound designers. Jessica also wrote our theme music. Our producer is Danny Lewis. We got help this week from Catherine Millsop, Scott Salloway, and Philana Patterson. For even more, check out our columns on wsj.com.

26:01And let us know what you think of the show. Email us at boldnames, all one word, at wsj.com. I'm Tim Higgins. And I'm Christopher Mims. Thanks for listening.