Venti pivots (out of existence)

As far as I know, I’m the only person who has written in detail about Venti, the weird high-interest travel savings program, so it falls to me to pass along the announcement of the end of their high-interest savings program:

“On December 31, 2024, Venti's partnership with Dwolla will be fully terminated. This means you'll no longer be able to deposit cash onto your Boarding Pass and earn points via interest payouts. To earn points on cash deposits, you'll have to bank with a financial institution that has partnered with Venti.”

I assume the last sentence is a reference to the program they announced in July whereby deposits at partner credit unions would earn Venti points in addition to the cash interest earned on those deposits. The program was of limited interest at the time because of the tiny number of credit union partners and the strict membership requirements they impose (congratulations to Georgetown University alumni and students).

Venti had one unique selling proposition and they couldn’t afford it

Venti’s website was terrible. Venti’s app was terrible. Venti’s airfare booking portal was terrible. Venti’s hotel booking portal was terrible. There was only one reason to use Venti, and that was the 9% APY (in the form of “points” that could be redeemed through the aforementioned booking portals) they offered on deposits.

This model relied on unredeemed points to finance it: since Venti was being paid for all the deposits they harvested, as long as the redemptions were small and few enough they could use the interest they earned on the entire deposit base to pay for the redemptions of that minority of users.

This model works extraordinarily well when it is adopted by firms that provide valuable services, like credit card companies. Chase earns interchange fees on every transaction, and interest on every unpaid balance, but only incurs the cost of rewards when they’re redeemed. Travel hackers may feel rich sitting on hundreds of thousands or millions of Ultimate Rewards points, but Chase feels even richer because they get to keep the money until we get around to redeeming them. This works for all the parties involved because Chase cards can be used to pay for goods and services, a valuable function in the modern economy. The fact that occasionally Chase is on the hook for the expense of a redemption is incidental to Chase’s view of the situation; Chase may well cheer us on when we score valuable redemptions, if it buys them a loyal customer for another decade.

Venti wasn’t like that. The only thing you could do with an account was put money into it, and the only thing you could do with the interest was book travel. In other words, there was no long tail of unredeemed points: the only people putting money into the system were people planning to make redemptions, forcing Venti to pay out a much higher percentage of the accrued points each month than Chase does in the example above.

Since interest rates are, in fact, below 9%, this situation could not and did not endure.

Conclusion

Venti has already redesigned their website to reflect their pivot towards a business-facing strategy. If anything comes of it, I’ll be sure to report back.

I’m not holding my breath.