Signs of life continue to shine through at the ailing Air Miles program.

Following an extremely rough year, Air Miles decided to make a baffling, 2021-esque YOLO into the world of crypto and the metaverse by partnering with two relatively obscure tech startups a few weeks ago.

Today, the fading loyalty giant has announced that it’s partnering with credit card-issuing fintech, Neo Financial. Let’s take a look at what this means for the Canadian rewards space.

A New Air Miles Partner

Neo Financial describes itself as a “technology-first financial tools” company, which means that they issue credit cards and bank account-like products that come with an integrated smartphone app.

The partnership with Air Miles commences immediately, though at this time, we don’t have any specifics on what the earning rates or rewards will be for Neo cardholders or regular Air Miles collectors.

However, we do have at least an initial offer: anyone getting a new or refinanced mortgage with Neo Financial will receive a gift of 1,000 Air Miles.

This represents a rebate worth $100 in Cash Miles, though one might be able to squeeze a little bit more out of Dream Miles depending on the redemption.

Still, it is unclear what closing mortgages will do to support technology-first financial tools.

Moreover, a rebate of $100 in Air Miles, which can only be used at a dwindling list of partners, or via the Onyx personal shopper feels weak – after all, many traditional financial institutions will offer mortgage closers a cash back rebate in hard currency, which can then be used to buy amenities like furniture or pay overhead costs like property taxes. 

Finally, there is the question of required expenditure. The aforementioned BMO Air Miles World Elite Mastercard grants between 2,000 and 3,000 Air Miles on its publicly available offers, and at least once had an offer of 5,000 Air Miles, for only $3,000 in spend.

On the other hand, most mortgages cost hundreds of thousands of dollars, and need tens of thousands up front in the form of a down payment. The credit card is therefore much more efficient in terms of Air Miles earned compared to money spent.

Air Miles Pivoting to Tech: Is It Viable?

Air Miles’s decision to partner with Neo Financial indicates a clear strategy: though the venerable program may be losing other, traditional retail partners, they want to remain afloat by pivoting toward the tech industry.

However, it is difficult to establish what makes Neo Financial a uniquely “technology” company aside from it having an attractive mobile phone app in pastel colours and large amounts of marketing oriented toward millennials and Gen Z consumers.

Neo’s credit card and banking products are underwritten by other, older (and stodgy) banks such as ATB Financial, an institution founded by the Government of Alberta specifically to provide loans and fiscal support to farmers during the Great Depression as an offshoot of the contemporaneous Social Credit movement.

The company also describes itself in its own terms as a “disruptive fintech,” and yet they issue the retail store credit cards for the Hudson’s Bay Company, a corporation which has been in continuous business operations since the reign of King Charles II.

While it’s possible that Neo further bolsters its tech credentials in the future by offering disruptive products, or building an excellent software platform, these possibilities do little to help bail the suffering Air Miles out of its current, dire predicament.

Air Miles’s attempts to work with tech companies feels like a delayed hangover from the 2021 bull market, when every company offering revolutionary new products was flush with venture capitalist money.

While this news could have buoyed Air Miles with renewed energy a year before the writing of this article, its announcement in late 2022 smells of desperation instead, and we’ll need to see the Air Miles and Neo partnership offering some concrete value to be convinced otherwise. 

Conclusion

Air Miles has announced a partnership with Neo Financial as part of a generalized tech pivot.

The company has decided to offer 1,000 Air Miles as an incentive for closing mortgages with the fintech. This incentive, worth only about $100, seems low given the other offers available even on the now-cooling real estate market.

Still, signs of life remain at Air Miles, and though their new tech-oriented strategy feels very 2021, it may yet pay dividends should the rewards program live to fight another year.

Until next time, don’t close your house without getting something back.