Knot and Fiserv Partner for Lyft Drivers
Fintech platform Knot announced a strategic partnership with Fiserv to bring its CardSwitcher technology to Lyft Direct. The partnership enables Lyft drivers to seamlessly update their payment card information across various merchants, aiming to reduce payment failures.
- Failed payments are a significant issue for subscription-based businesses, with projections indicating they will cause $129 billion in lost revenue in 2025. These failures can stem from expired cards, insufficient funds, or gateway errors, leading to involuntary churn where customers are lost due to payment issues rather than intentional cancellation. - The Lyft Direct debit card, powered by Payfare and issued by Stride Bank, provides drivers with instant access to their earnings after each ride with no payout fees. The card also offers cashback rewards on gas, groceries, and dining, as well as access to over 20,000 no-fee ATMs. - Knot's CardSwitcher technology is designed to reduce payment failures by allowing users to update their card-on-file information across multiple merchants from within their banking or fintech app. This benefits merchants by reducing transaction declines and improves the user experience by ensuring uninterrupted service. - Fiserv has been actively expanding its services for the gig economy, as demonstrated by its acquisition of Payfare, a company specializing in instant payout and digital banking solutions for contract workers. This move aims to provide gig workers with faster and more efficient access to their earnings. - Prior to this partnership with Fiserv for Lyft Direct, Knot has established collaborations with other major financial players like Plaid, American Express, and PayPal to streamline the card-on-file update process for their users. - The Lyft Direct program has been expanding its features to offer drivers more financial tools, including a high-yield savings account, balance protection of up to $200 for eligible drivers, and wellness perks through a partnership with Avibra. - The problem of "involuntary churn" due to failed payments is a major concern for businesses, as studies show that 50% of all subscription churn can be attributed to failed card payments. Furthermore, 41% of subscription-based businesses now consider payment failures their top concern, surpassing customer acquisition worries.
