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Cardlytics $CDLX: The Best Potential Next Partner, Apple

Why Cardlytics should partner with Apple next, why it matters, and why it will work.

For all my notes on CDLX, check out my Qualitative and Quantitative “Research Notes”:

This was first published on Substack and discussed on YouTube on 9.17.2021. Republishing on my website as a backup.


This write-up discusses:

  • Partnership opportunities, and why Apple is the best next partner

  • How everyone in the ecosystem benefits from a partnership with Apple (same applies for others who partner with Cardlytics)

  • Apple notifications and widgets (no partnership required)

If effort and focus are put on partnering with any single neobank, fintech, payment processor, or mobile wallet, it is likely best to focus on not only how much value that single partner brings to Cardlytics within that one partnership, but also how much value it brings to existing users within Cardlytics and whether it can increase the odds of other partnerships (thereby getting many birds with one stone).

A single partner like Apple could attract many payment processors wanting to partner with Cardlytics to easily allow their merchants a direct way to advertise on Apple and the other Cardlytics’ channels. These new advertisers could then further increase the attractiveness for smaller neobanks and fintechs to partner with Cardlytics to bring those advertisers to their users. The opposite is likely not true, where a single neobank or fintech will not increase the odds of the reverse occurring.

Therefore, money, time, energy, and focus, even if only for a few years, should be spent on partnering with Apple, the best next partner.

Apple $AAPL partnering with Cardlytics $CDLX


Purpose of this write-up:

  • Think through partnership opportunities, and who is the best next partner

  • Think through the potential runway, which helps reduce the risk of selling too early

  • Share thoughts on a topic I enjoy thinking about

Increase Value to Existing Users and Cardlytics’ Value Even More

I have heard the argument that Cardlytics already has large enough reach with their 167M monthly active users (MAUs) that Cardlytics should now focus on the advertising side and increase ARPU with the existing users, and not focus on increasing MAUs or new partnerships.

I recognize this, and so does Cardlytics. This is why they are building and rolling out the new user experience to increase engagement and utilization, adding notifications, and increasing availability and usage of the self-service platform to increase the number of offers and relevance of offers for users. However, that does not mean Cardlytics should stop there.

With 600 employees, there is no reason a small team cannot work on additional partnerships. Adding partnerships on the advertiser / merchant side can increase the number of offers and relevance of offers to existing MAUs, increasing ARPU with those existing users.

Also, partnering with someone who dramatically increases the size of the channel in relation to today (not a smaller neobank), may increase the odds of partnerships with multiple merchant aggregators and then also smaller neobanks and fintechs. Therefore, a single partnership could accomplish everything.

Icing on the Cake

Very little needs to happen for Cardlytics to be worth the current market cap of $3B. The company has mentioned many future improvements they are working on, however none of those need to occur in order for the current market of $3B to be more easily justifiable.

For example, around $5 in average revenue per users (ARPU) leads to a $3B market cap (related discussions: 1 and 2). This can be achieved without SKU / CPG, self-service, neobanks, additional banks, open banking, new UI, notifications, etc. I redeemed over $35 in the last week, which is presumably over $5 in ARPU. This is with current advertisers, on the old UI, no notifications, no SKU level offers, etc., and in a single week, not over an entire year.

Therefore, if we assume around $5 on the current platform is possible and is what the market is implying in terms of growth, then the market price is assigning zero benefit or 0% probability of occurrence to everything else, including additional partners that increase MAUs or advertisements /ARPU. In other words, extremely cheap, or free, optionality.

Who is the Best to Partner with Next?

The goal is to figure out the best next partner for Cardlytics. All potential partners are worth partnering with at some points and will increase the value for all constituents in the Cardlytics ecosystem.

However, I want to exclusively focus on who will bring the most value to existing users, and have the largest cascading positive impacts (such as leading to the most additional partnerships, reducing the time, energy, and money spent on individually pursuing each one).

Neobanks and Fintechs

Cardlytics can continue to target the neobanks and fintechs through Dosh. Potential partners like Coinbase, Revolut, Nubank, Chime, Monzo, etc. would add a decent number of MAUs, however, most users within the neobanks and fintechs are not using them as their primary bank or spending account at this time, nor would the addition of their MAU base lead to a significant number of advertisers joining the platform that in turn would benefit the existing Cardlytics MAU base.

Therefore, although focusing on the neobanks and fintechs collectively helps bring on new advertisers and reduces the risk from a shift from traditional banking to neobanks or fintechs, I do not see any single partnership leading to a substantial gain in MAUs or significantly benefiting existing Cardlytics MAUs from new advertisers.

Payment Processors

If smaller neobanks or fintechs do not lead to the most value to existing Cardlytics users given their addition will have a lower likelihood of adding advertisers, it may be better to direly target partnering with larger partners with a significant merchant base. This would lead to directly adding many more marketers to advertise on the channel, which benefits existing users.

There are affiliate marketers and ad agencies that could add a decent number of advertisers to the channel, but I believe they will all eventually come via self-service (and may already be doing so).

The number of small and medium businesses could advertiser through self-service, but they need to discover this as an option. This could occur through integrating self-service in the banks of business bank accounts, and therefore this option is already possible for Cardlytics to explore (no partnership needed).

Therefore, the best option is partnering directly with the companies that have a significant merchant base, and integrate the self-service capabilities into those merchant platforms, allowing them to advertise to all of the existing 167M Cardlytics users.

Payment Processors like Stripe, Adyen, Square

A payment processor could lead to significant benefits for existing Cardlytics users and banks, by leveraging their large number of merchants that use their payment processor.

Merchants who use the payment processor could benefit from having integration with Cardlytics, making it easier to directly advertise and target many potential customers, have certainty in results, done in a brand safe way, and where users are engaged directly with the advertisements (as opposed to other platforms, where users are engaged with other content, and ads are slipped in and not desired).

I first thought of a payment processor partnering with Cardlytics given the MasterCard / Cardlytics partnership in 2015.

Stripe and Cardlytics $CDLX partnering like MasterCard $MA and Cardlytics partnership

Given the number of partners that Stripe1 and Adyen2 uses, a partnership with Cardlytics seems reasonable.

Size and Impact

To get an idea of the impact and importance of a partnership with a payment processor, the following3 is their estimated payment volume.

If we assume 50bps of that revenue could be spent in Cardlytics as billings, minus 30% for consumer incentives to arrive at Cardlytics revenue:

  • Adyen: $367B * 50bps * (1 - 30%) = $1.28B in CDLX Rev

  • Stripe: $350B * 50bps * (1 - 30%) = $1.23B in CDLX Rev

  • Square: $106B * 50bps * (1 - 30%) = $0.37B in CDLX Rev

  • Total: $823B * 50bps * (1 - 30%) = $2.88B in CDLX Rev

Although Square currently processes less payments, they would bring the benefit from both the user side from Cash App, and possibly the advertising side from Afterpay merchants, which directly leads to additional benefits day one. Cash App users would benefit from Cardlytics’ existing advertisers, and Cardlytics’ existing advertisers would benefit from the additional Cash App users. Square and Afterpay merchants would benefit from advertising to more than the relatively limited number of Cash App users by advertising to the bank channel users, and Cardlytics existing users in the bank channel would benefit from the additional offers from Square and Afterpay merchants.

Conclusion for Partnering with Payment Processors and Digital Payment Companies

These partnerships would increase the benefit to existing users from additional offers and more relevant offers, increase overall revenue, and increase the odds of other smaller neobanks and fintechs joining the platform to increase the value for their users.

However, there is still likely a single partnership that will increase the odds of any given payment processors joining (or multiple, instead of one at a time) and then multiple neobanks and fintechs partnering (i.e., cascading benefits from one single partnership).

Mobile Wallets

I have concluded that small neobanks or fintechs may not directly lead to large payment processors with many merchants partnering with Cardlytics (given the small incremental user base to the large user base Cardlytics already has), but the inverse may be true (more advertisers could attract the smaller neobanks or fintechs partnering with Cardlytics).

In addition, partnerships with any given payment processor may not lead to a significant partner such as a mobile wallet partnering with Cardlytics (the smaller advertisers may not be a deciding factor for a larger mobile wallet to join), however, the inverse may be true.

For example, it is unlikely that partnering with a fintech like Coinbase would significantly increase the attractiveness and odds of a payment processor like Stripe wanting to partner with Cardlytics (adding 50M+ is not that much in relation to 167M to be a deciding factor, let alone how many of those Coinbase users would have access to the offers, since likely limited to the Coinbase debit card at this time). Also, a Stripe partnership doesn’t necessarily attract a mobile wallet provider like Apple to partner with Cardlytics.

However, partnering with Apple could dramatically increase the odds of Stripe wanting to partner (as well as other payment processors like Square) due to larger reach / different customers to target / more understanding / more awareness / higher credibility / more discoverability, etc., and then Coinbase wanting to partner (as well as other neobanks and fintechs like Chime, Nubank, Monzo, etc.) due to significantly more advertisers for engagement, signups, and spend.

Cardlytics Possible Partnerships like Apple $AAPL Coinbase $COIN Stripe Square $SQ Chime Nubank

Therefore, by targeting a mobile wallet partner with significant MAUs, it may lead to a payment processor (and possibly more than one) partnering with Cardlytics for their advertisers to leverage the even larger reach and targeting ability.

These new advertisers could then in turn attract smaller neobanks and fintechs to join the platform to add more offers and relevant offers to their users and increase engagement and signups.

For those reasons, partnering with a single large mobile wallet may be the single best next partner for Cardlytics.

The following illustrates how this all comes together, as well as additional benefits within Cardlytics:

Cardlytics $CDLX Flywheel with Partnerships, Apple, NUbank, Chime, Coinbase, Cash App, Stripe, Square, Self-service, New User Experience (UI), Higher Engagement, Higher ARPU, More Data, More Effective Targeting, More Reach

Interesting Note: Other companies that generate revenue from advertising have a similar benefit between more data leading to more advertisers and then back to more data (seen in the graphic above, and connected with the blue arrow). Also with these other channels, more users can lead to more content and then more users. What is different about Cardlytics is the advertising is the content in the channel. Users continually benefit from more advertisers, where on other platforms, the ads are not the desired content and do not directly benefit from the advertisements.

Google Pay

I do not consider Google Pay as a potential partner. They are primarily in the advertising business, and already place offers in their mobile wallet. They do not need to leverage Cardlytics’ advertisers or reach, since they have all the advertisers who are already using Google. I do not see them as a threat. Rather, I see Google Pay offers as a way to add to the market, increase the understanding card-linked offers (CLO), increase the number of advertisers incorporating purchase data results into their models (such as a prior in Marketing Mix Models or Bayesian Hierarchal Models), and therefore is a benefit to Cardlytics.

Samsung Pay or Apple Pay

To decide between the remaining Samsung Pay and Apple Pay, I wanted to compare transactions, activity, usage, etc.

One impressive statistic was “Mobile wallet usage grew by more than 50% in 2020 among the three pays – reaching approximately 2 billion transactions. During this period, Apple Pay continued its dominance, accounting for 92% of these transactions.4 Although this is limited to debit transactions, the difference is significant enough to give some weight to Apple being a more important partner, if only one was to be targeted.

Apple Pay vs Google Pay vs Samsung Pay in terms of debit transactions

This is likely in part due to Apple Pay also having higher enrollment, activity, and transactions per card for debit cards among the mobile wallets:

Apple Pay vs Samsung Pay vs Google Pay in terms of debit transactions, enrollment, activity, and usage rates and numbers.

In attempt to get a sense of total transactions, and not just debit transactions, I found the following from the Q1 2020 Apple transcript:

For Apple Pay, revenue and transactions more than doubled year-over-year with a run-rate exceeding 15 billion transactions a year.” - Tim Cook

This was prior to Covid and the accelerated adoption and usage of mobile payments.

This data is enough to tell which mobile wallet is the best to target (Apple).

Interesting Note: It looks like at some point within the last year, Samsung Pay dropped their rewards program. If this is still the case, it may be an easier case for Samsung Pay to partner with Cardlytics.

Apple Pay

The statistics above do not provide information that could give a sense of how much value Apple could bring to Cardlytics on a standalone basis (i.e., not accounting for second order effects).

I have found very little data on Apple Pay, given how little Apple shares.

I have seen some figures of 383M worldwide Apple users prior to Covid and the accelerated adoption (looks like as of December 2018)5. One website estimated Apple Pay has been enabled by an estimated 500M users worldwide6. This seems reasonable, given 383M at end of 2018, and then the increased adoption with Covid.

Using that figure, even at something small and possible like $5 of incremental ARPU (incremental to the underlying duplicate banks with Cardlytics offers, to reflect increased awareness and usage from being more accessible and discoverable in a mobile wallet like Apple), that is at $2.5B in revenue for Cardlytics.

If we assume the same activity rate as debit cards at 44%, there would either need to be about $11 for the equivalent $2.5B revenue, or if still $5 for those active users, revenue would still be $1.1B.

Although the $1.1B is slightly less than the revenue from partnering with an individual payment processors, an Apple partnership could increase the odds of getting any one or all of them to partner with Cardlytics. And as mentioned before, this is due to their substantial user base, dramatically increasing the attractiveness for payment processors looking to provide value to their merchants (even if just from an optics or credibility sense). These new advertisers could then increase the odds of the remaining neobanks and fintechs partnering with Cardlytics to provide those offers to their users. In total, there would be significantly more revenue earned by Cardlytics, all of this from the single partnership.

A partnership such as with Apple also benefits everyone in the ecosystem: Apple, consumers, advertisers, existing bank partners of Cardlytics, and Cardlytics.

Therefore, Apple like is likely the best next partner for Cardlytics.

Partnering with Apple

While the following discussions are focused on Apple and adding users, many of the benefits discussed could be interchanged with other potential partners.


As discussed above, the reason partnering with a mobile wallet provider like Apple is so beneficial is due to the large reach, and integration with many current users.

It also seems as if Apple is looking to add more to their payments, according to the earnings call in Q4 20207:

“Apple Card is doing well, and Apple Pay is doing exceptionally well.
As you can imagine, in this environment, people are -- less want to hand over a card, so this contactless payment has taken on a different level of adoption in it that I think will never go back. The U.S. has been lagging a bit in contactless payment, and I think that the pandemic may well get -- put the U.S. on a different trajectory there.
And so we are very bullish about this area and view that there are more things that Apple can do in this space. And so it's an area of great interest to us.” - Tim Cook

There is also an opportunity for Apple to use Cardlytics to increase the attractiveness / number of offers on the Apple Card8. This would lead to more signups and higher usage, especially given the current offers are fairly limited, or low in amount:

Cardlytics $CDLX powering Apple Card $AAPL rewards and cash back.

However, the number of Apple Card users is significantly less, compared to integrating with Apply Pay and offers seen and accessible by a substantial number of users. If Cardlytics partners with the Apple Card, I am not sure they would also partner and integrate with Apple Pay that opens up to other cards (but they may add the Apple Card only offers to the Apple Pay section).

Therefore, I feel more benefit would come from Apple Pay (Apple’s mobile wallet), with the offers discoverable and available for everyone.

Apple Pay

With Apple partnering with Dosh / Cardlytics for Apply Pay, the offers could work for any card or linked bank, as long as the payment is made with Apple Pay.

Cardlytics powering Apple Pay rewards and cash back.

This increases the incentive to use Apple Pay to make purchases.

The Apple Pay option could be similar to Google Pay or the Dosh app, where the offers are over the top, and apply to any card chosen. This is also similar to the Venmo QR code offers, where the payment must be made via Venmo QR code, but any underlying card or bank account can be used.

In this case, based on what information is accessible, the offers may be less targeted, and more similar across users (seen on Dosh and Venmo). These are then blanket offers for everyone, and have lower amounts compared to customized, targeted offers which allow for higher amounts and then have better results as well (like in the banking channel).

I think there would be significantly less benefit if personalized offers required logging into your bank account like Nectar Connect and open banking. There needs to be as little friction as possible, such as Cardlytics offers working on already linked cards within Apple Pay. Therefore, worst case with Apple Pay would be that offers are less targeted.

However, I am sure there is a way to get this to work, especially since it benefits everyone, including the end user.

Apple Benefits

With this partnership, Apple benefits from increasing the incentive to make purchases with Apple Pay, and from the corresponding increase in payments made with Apple Pay.

Based on Apple's new updates on iOS 15, it would seem they are trying to further increase the number of payments made via Apple Pay. Instead of only making it easier through system and platform updates, adding Cardlytics offers would give users a financial incentive to complete purchases via this method.

Using Cardlytics over creating their own Apple ad solution has the same benefits as defaulting to Google search over their own Apple search. Apple could leverage Cardlytics’ scale, data, existing advertisers, dedicated resources, and existing system, while getting paid to do so.

Given additional MAUs in the ecosystem benefit everyone, and would benefit Apple, I feel very few additional banks, neobanks, or fintechs would partner with an Apple only ad solution. Therefore, I think there is a benefit to having an independent party handle the ad solution for Apple.

Using Cardlytics would also lead to the most new advertisers (not just Cardlytics’ existing advertisers). This is due to the larger total reach with Apple + Cardlytics. This in turn increases the attractiveness of Apple Pay to users, leading to higher usage than an Apple only solution.

Apple could also benefit from using a partner like Cardlytics who also emphasizes privacy for their users (no PII collected or access, no demographics received or used for targeting, data kept within the banks, and not reliant on tracking users with cookies9). Similarly, like in the bank channel, there could be an option to opt-out of offers. In some capacity, this is similar to Apple allowing users to turn off what is shared with advertisers.

Apple Users Benefit

First, Apple users would have offers available to them to save money.

By making it available to all Apple users, regardless of their primary bank / card (instead of restricting offers to only the Apple Card), it allows for the highest number of Apple users saving money.

Further benefits to Apple users comes from attracting more advertisers. Integrating with Apple Pay leads to the most potential MAUs, which leads to more advertisers (or potential partners with a large merchant and advertiser base) being attracted to advertising on Cardlytics and Apple Pay. More advertisers leads to more offers and more relevant offers for users.

In addition, if the offers are easily accessible in the Apple Pay section, they are more likely to be discovered by users than within a bank app. This also leads to more users who own businesses seeing and understanding CLO offers, further increasing the advertising pool for users to redeem offers and save more money.

Advertisers Benefit

Current advertisers of Cardlytics benefit from advertising to new users, more users, more data, etc.

Mentioned above is how more advertisers benefit more users. The inverse is also true. More users increases the attractiveness of advertising on Cardlytics and Apple Pay (larger reach, more data, more users of a targeting group, etc.) for new advertisers or for current advertisers to increase their ad spend (increasing offer amounts or number of customers targeted).

With a Cardlytics partnership, advertisers would also benefit from only having to learn and use one self-service platform for advertising based on purchase data. The platform would allow advertising on both Apple and the banks at the same time.

Existing Partnered Banks Benefit

By adding Apple, even more advertisers would use the platform, increasing the number of offers in the existing Cardlytics-partnered bank channel as well, which increases engagement for their users and the banks’ revenue share. A reason is from the simplicity of advertising on both Apple and the banks at the same time.

If the banks felt they were losing engagement due to Apple Pay offers, the banks could use their revenue share to increase the attractiveness of their offers in relation to the same ones on Apple Pay. In this situation, it may require the offers to default to the underlying bank (which differs from Dosh superseding Cardlytics offers, based on my own experience with duplicate Dunkin’ Donuts offers).

To make both the banks and Apple happy, the banks could make their higher offer "Apple Pay Only" where applicable (such as when they are a duplicate). This leads to using the underlying bank card from the existing Cardlytics partnership (since the user saves more money), but also using it through Apple Pay (since the offer is Apple Pay only). Banks, Apple, and Cardlytics all win in this scenario.

There are still places where Apple Pay is not accepted or used. I do not think I've used it at a gas pump or at a sit-down restaurant. Although this could change over the next 5 years, for now, there will still be offers that are only relevant at the bank level, not Apple Pay. In addition , it could also be that Apple Pay offers are too crowded, or more expensive if auction based. This could lead to advertisers wanting to only place offers in the bank channel, or different offers in the bank channel, where the offers on the underlying bank card will still work when paying with Apple Pay (I have tested and confirmed this works). Therefore, there will not always be overlapping of offers, nor a risk of no offers being placed in the bank channel due to Apple Pay offers.

Cardlytics Benefits

As everyone else benefits and uses the system more, Cardlytics also benefits.

Larger scale, more users and MAUs, more data, more eventual advertisers, higher revenue and ARPU, higher accessibility leading to more awareness of offers in general and higher engagement, and more.

Not only does partnering Apple lead to attracting more advertisers on an individual basis, but it could also increase the attractiveness for companies like Square or Stripe for their merchants to advertise to more users. This could then lead to more neobanks and fintechs looking to leverage the additional advertisers that have joined Cardlytics due to Apple.

Utilizing Apple without a Partnership

Apple Notifications

Cardlytics could take advantage of Apple iOS 15’s updates with notifications10. These updates include:

  • Notification summaries

  • Larger imagery on notifications

  • Time sensitive notifications

With larger app icons for both push notifications and the summary, it may be an opportunity for offer specific notifications, and have an image other than the bank app to highlight the specific offer.

Cardlytics $CDLX notifications on Apple

This may be more easily seen in the notification summary below. For instance, they could have a store logo in place of the Yelp logo, with an image of a meal at a local restaurant, with “50% Off This Meal at This Restaurant” in the bold header, and a corresponding description. This could be given at the morning summary to allow for time to see before lunch.

Cardlytics notifications on Apple with iOS15

The time sensitive alerts may have improvements for location and time-based notifications. It is possible that these time sensitive alerts are added so they do not group in the notification summaries. This could be needed for Cardlytics, if someone is shopping at Target, and there are associated offers that the user should be aware of immediately, rather than hours after they are done shopping. (Related Idea: Maybe there is notifications that groups offers. With the Target example, the notification could be for all Target offers, instead of only one SKU level offer. When you open the app, you see all those related offers grouped together, rather than searching to find them. The new UI and categorizing at the store level will help.)

Apple Widgets

Cardlytics could also take advantage of widgets. This would allow users to view and activate offers without opening a bank app.

Cardlytics and Apple widgets

Sample widgets integrating with the banks:

Cardlytics $CDLX and Apple widgets

Source: Copilot App

This could either be bank sponsored widgets or through a Cardlytics/Dosh app.

Widgets would be more for aware and heavy users of offers, due to needing to manually add.


Targeting a mobile wallet partner with significant MAUs, such as Apple Pay, may lead to a payment processor partnering with Cardlytics for their advertisers to leverage the even more significant reach. These new advertisers benefit existing Cardlytics MAUs (leading to higher engagement, usage, and ARPU), and could also attract smaller neobanks and fintechs to join the platform to add more offers and relevant offers to their users and increase engagement and signups. The reverse same cannot be said from partnering with a single neobank / fintech or payment processor.

Therefore, money, time, energy, and focus, even if only for a few years, should be spent on partnering with Apple, the best next partner. With 600 employees, there is no reason a small team cannot work on this. If the value is even $2.5B / year (discussed above, and ignoring the likelihood of other partnerships and their corresponding benefit), if it lasts 10 years, that is $25B in revenue, and approximately $10B in cash flow. If there is even 1% chance of this occurring, then Cardlytics could spend $100M on this bet. For 5 years attempting to land this partnership, with 10 employees out of the 600 working only on this, they could afford to pay each a $2M salary. Cardlytics could also hire top talent, or create a larger team with smaller salaries, with that $100M budget.

Beyond leading to other partnerships, an Apple partnership would benefit everyone: Apple, consumers, advertisers, existing bank partners of Cardlytics, and Cardlytics, and therefore should at least be considered by Cardlytics.


If you have any questions or push back on any of the above, please contact me. I would enjoy discussing more.

-Austin Swanson (Swany407)

Twitter: @Swany407

More Detail

I discussed this topic in more detail in the following video:

Future Possibilities

Valuations & Intrinsic Value

Thoughts Following Q2 2021 Earnings and Price Decline

Opportunities with PayPal

Best Case Scenario with Venmo

Investor Day Presentation (Includes discussions on Venmo)

I discussed Venmo Offers in detail in the Cardlytics investor day write-up and video:

Venmo Offers Valuation

I discussed Venmo Offers and valuations with additional detail in the following write-up and video:

Detailed Write-Up and Valuation

If you are looking for more detail on this company and the investment thesis, I have created a write-up, which is free to read via Substack. The write-up is formatted in bullets to more quickly skim and read sections of interest.

I also discussed the investment on YouTube.

Additional Resources and Links

Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis. Please see the Disclaimer page for more details.


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