Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Samir Jain, Investor Relations. Please go ahead.
Thank you, operator. Good afternoon, and thank you for joining us for Fold Holdings' third quarter 2026 earnings call. Joining me on the call today are Chairman and CEO Will Reeves and CFO Wolfe Repass. Before we begin, please note that the information reported on this call speaks only as of today, November 10, 2026, and therefore, any time-sensitive information may no longer be accurate as of the time of any future replay, listening, or transcript reading. A replay of today's call will be available by webcast on the company's website, investor.foldapp.com, and more information on how to access this replay feature will be included in the company's earnings release. Comments on this call may contain forward-looking statements within the meaning of the U.S. federal securities laws.
These statements are based on our current expectations and beliefs and are subject to risks and uncertainties that could cause actual results, products, activities, or timeframes to differ materially. For example, statements suggesting or implying the company's ability or positioning for growth, as well as any statements which indicate future dates or timeframes, are forward-looking statements and inherently uncertain. In some cases, you may identify forward-looking statements by terms such as believe, expect, potential, should, plan, or similar terminology. But any statement that is not a statement of historical fact may be a forward-looking statement. These statements reflect the current views of Fold's management and are not guarantees of future performance. Please refer to Fold's Form 10-K and other filings within the SEC for discussion of risks and uncertainties that may affect our upcoming results, future plans, and product rollouts, among other things.
We will discuss certain non-GAAP financial measures during this call. These measures should not be considered a substitute for GAAP results. A reconciliation to comparable GAAP measures is included in our earnings release and SEC filings. With that, I'll pass the call to Fold CEO, Will Reeves.
Thanks, Samir, and thanks everyone for joining us today. When we spoke last quarter, I told you that we had a number of big things in the works, and I am happy to say that we have successfully moved many of these from idea stage to real execution. Let me start with the headlines because there is a lot of good news to share. First, we launched our customer deposit and balance strategy with two new products built on our Lead Bank partnership, Lead Bank spending accounts and Fold Reserve. Together, they mark our evolution from a transaction business into a full-featured financial services platform with additional diversified revenue streams. For the first time, Fold can monetize the various deposits and balances customers hold with us and reward them for deepening that relationship. Since launch, thousands of customers have already activated our new balance products.
Those customers hold balances several times larger than our average user, and these products already account for a meaningful percent of deposits on the platform. Strategically, we are reshaping Fold from a business built on driving transactions into one built on gathering balances. Deposits and balances are one of the highest margin businesses we can be in. Every dollar a customer keeps with Fold earns a return for us, unlocks better rewards for them, and ultimately flows through our transaction products. We will deliberately prioritize balance growth over transaction growth because that is a path to a larger, more profitable Fold. Fold is becoming a place where customers keep their money, not just a place where they spend it. We also addressed one of the biggest points of friction at the top of our funnel.
Previously, our only rewards tier sat behind a subscription, which stopped many people from ever getting started. Now, our free tier offers rewards to every user, which we believe makes it the best no-fee rewards program in the market. New customers get real value on day one and a clear path deeper into the platform. At the same time, existing users continue to benefit from existing offerings, as evidenced by our steady to increasing activity through the quarter. We also launched pass-through Bitcoin buying, a critical upgrade made possible by our Lead integration. Customers can now buy Bitcoin directly from any linked bank account without moving money onto Fold first, reducing funding friction and allowing for increased trading velocity.
Speaking of scale and new growth channels, we secured distribution with more Bitcoin gift card partners, including TikTok, which became our number one customer acquisition channel during the quarter and contributed to a 270% increase year-over-year in our custody and trading revenue. We also reached 2,500 cardholders on the Fold credit card, which was our target until a credit facility is in place. A facility is a conduit to capital, which in turn expands the number of users we can introduce to the program. We believe it is the unlock to growth, and we are in ongoing conversations with credit facility partners and hope to have a partnership secured shortly.
Beyond our own efforts, the retail Bitcoin market stayed soft through the quarter despite a meaningful recovery in Bitcoin price, with the uncertainty around the recent elections and a series of hacking incidents across the industry introducing new pressures. We don't control those macro events, but we do control how Fold navigates these challenges. Our actions through the year have better positioned us to deal with this volatility if it persists. Earlier this year, we substantially reduced the amount of Bitcoin in our treasury and directed capital towards our operating businesses. We have also fortified our balance sheet by eliminating costly sources of capital and expanding the total amount of accessible capital should our business need it. Next, I want to briefly dive into the details behind our newest products, specifically Fold Reserve and Lead spending accounts. With Reserve, customers can use their balance across everything we offer.
Fold earns traditional forms of yield on those balances, and in return, customers unlock our best rewards tiers, bill pay rewards, zero fees, zero spread added Bitcoin trading, and higher card rewards. We also launched the first version of our Lead Bank spending accounts, which will bring a material improvement over our existing Sutton Bank prepaid accounts and will generate economics on the balances to Fold. Lead Bank, an FDIC-insured institution, holds the deposits, and Fold provides everything else, the app, servicing, and the customer experience. Over time, we expect our partnership with Lead to support direct deposit, expanded payment and transfer options, and higher transaction limits, making Fold a customer's primary financial relationship rather than just an app they visit to transact. The early results are strong, and in the first couple weeks since launch, thousands of customers have activated their Lead Bank accounts.
Activation is the step that lets them participate in Lead spending accounts and in Reserve, and it has already become one of the most meaningful sources of total deposits in the platform. For Fold Reserve customers specifically, those customers hold several times the value of a typical Fold customer, and they're participating at every tier, from the lowest to the highest. That tells us the product works for the customer we have and the customer we want. That balance multiple is really the heart of the model. Every one of these new customers is worth several times a typical Fold customer. These are new products, and it is still very early, but we're encouraged by the trend so far. The strategy behind both products is simple.
Grow the balances customers hold on Fold, earn returns on those balances, and use that yield to fund better rewards, which in turn deepens customer relationships and increases lifetime value. A transaction pays us once, but a customer balance earns us every month, and it stays on the platform, and it ties that customer more closely to everything else we offer. Over time, we believe that means more recurring revenue, more predictable earnings, and less dependence on where Bitcoin trades in any given quarter. Customers benefit too, with better rewards, more functionality, and better service. It's a virtuous circle. On distribution, we secured TikTok for our Bitcoin gift card in Q3, and it quickly became our largest gift card and customer acquisition channel during the quarter. Fold is the first and only Bitcoin gift card on TikTok Shop, which puts us in front of a large audience of younger consumers.
As a reminder, the Bitcoin gift card is one of our most powerful customer acquisition tools. Every gifted card brings a new person into the Fold ecosystem to redeem it. Digital distribution is proving to scale faster and cheaper than physical retail, and we will keep pushing toward broader digital distribution, adding channels through year-end and into the holidays. We are having a number of advanced conversations with digital partners and hope to have new partnerships to announce in the coming quarters. Now, turning to our credit card. We expanded access to about 2,500 cardholders, our target for this phase, and moved from a waitlist to an invite system for all eligible cardholders. Customers are using it as their primary card for everyday purchases as well as travel and larger spend, and it continues to bring in brand-new customers, not just deepen relationships with existing ones.
We are also launching a credit card preapproval flow to reduce friction for new applicants. Now anyone will be able to get pre-approved outside the app, and that reaches everyone who told us they want the card but has not downloaded Fold yet, and it lets a partner put the card in front of their customers directly. We expect this to significantly increase throughput and conversion at the top of the funnel. We have capped the current program to a smaller cardholder base while we finalize a financing partner, which we hope to announce shortly. Once the facility is in place, the number of cards we can issue will no longer be tied to the size of our own balance sheet. We can extend invitations to many more eligible customers, extend higher limits to qualified customers, and put real marketing behind the card.
We do not want this to be known as a niche Bitcoin card. We want the Fold credit card to be the most rewarding card in someone's wallet, the one they reach for first, and the gateway to everything else Fold offers. Here is how I would sum up Q3. We view this quarter as real proof of our ability to execute the next stage of growth of the company. The Bitcoin gift card had its best quarter ever. Our deposit products launched and are already showing strong signs of adoption and product fit. Our team continued to ship quality of life updates and app upgrades at a rapid pace. We continued to strengthen our partnerships and infrastructure, and we did all of this amidst a continued challenging macro backdrop for our industry.
We have been heads down building through it all, and we expect to continue doing so in the near term. One note on how to think about Fold from here. We believe we are no longer best understood only against Bitcoin exchanges, and that we are past being compared to a traditional digital asset treasury. Fold is now a full financial services and rewards platform that monetizes both the funds customers hold with us and the transactions they make, and that rewards them on every swipe, every bill, their rent, and their mortgage. That puts us in the same conversation as the neobanks and rewards platforms serving mainstream consumers. In the specific category of rewarding housing payments, we are aware of one other meaningful player, Bilt.
We now offer rewards on rent, mortgages, and every other bill with deposit and card products, and we intend to compete for that customer. Finally, two brief items to note on the stock before I hand it off. on October 22nd, our stockholders approved a reverse stock split authorization by a wide margin. We read that as a vote of confidence from a shareholder base with a long-term view that isn't fazed by short-term volatility. Separately, on alignment, our largest holders have been long-term holders through this period. Two of our directors bought shares on the open market in the past two quarters, and director and officer sales have been limited to tax obligations on vesting. We're all in this for the same outcome. Our Q4 plan is simple: grow balances, increase utilization of the products we have, scale distribution into the holidays, and keep improving efficiency.
With that, I'll hand it to Wolfe to walk through the numbers.
Thank you, Will, and thank you to everyone for joining today. While the third quarter brought a meaningful recovery in the price of Bitcoin, retail engagement has been slower to follow, and activity on our platform remained below prior year levels. That was reflected in our transaction volumes in the quarter, which were approximately $53 million per month in Q3 compared to $78 million per month in the third quarter of 2025. During the third quarter, we generated revenue of $4.2 million, a decrease of 44% year-over-year for the same quarter. Most of that decline came from merchant offers, where revenue fell from $6.6 million to $2.4 million. That decrease reflects both lower customer volumes and our continued optimization of our merchant offers portfolio toward higher margin offers. For accounting purposes, we record both the revenues and costs related to merchant offers on a gross basis.
Therefore, cost of sales related to merchant offers declined by nearly the same amount as our revenues, so the impact of decreased merchant offers volumes to our bottom line was much smaller than the top line decline suggests. On a positive note, custody and trading revenues nearly quadrupled to $1.3 million, driven primarily by the Fold Bitcoin gift card, which generated $1.2 million of revenue in the quarter compared to $200,000 a year ago. Looking ahead, we expect increased revenue contributions from both the Fold credit card and Fold Reserve to begin in Q4 of 2026. Moving down the income statement, our GAAP operating expenses were down 21% to $10.5 million compared to $13.3 million in the third quarter of 2025. Professional fees were down 36% year-over-year, while compensation and benefits were flat as headcount remained stable throughout 2026. Interest expense was $500,000 in the quarter, down 54% year-over-year.
GAAP net loss in the quarter was $2.6 million compared to net income of $0.6 million in the prior year period. Consistent with prior quarters, we look to Adjusted EBITDA as a key barometer of our core business operations. In Q3, Adjusted EBITDA was -$4.5 million compared to - $4.2 million in the prior year period. Despite the 44% decline in revenue, Adjusted EBITDA was largely unchanged year-over-year. Just as importantly, it was our best Adjusted EBITDA quarter of the year, improving from - $5.8 million in Q1 and - $5.5 million in Q2, as some of the cost initiatives we discussed last quarter began to show up in our results. Turning to the balance sheet, we ended the quarter with $21.7 million in cash and cash equivalents, positive working capital of $13.8 million, and 171 Bitcoin in our investment treasury valued at $14.3 million.
None of our Bitcoin is currently pledged as collateral, and we are free to use it in the business or to support additional financing capacity as we see fit. We also continue to self-finance the Fold credit card program and had $4 million in net card receivables at quarter end. We continue to work with potential partners on receivables financing to support the next phase of Fold credit card growth. Since our last earnings call, we made several changes to our capital resources, all aimed at maintaining financing flexibility. In September, we replaced our previous $250 million equity line with a new $25 million committed equity facility through Roth. We began using that facility in October.
Further, we amended our only existing debt obligation, a $13 million note with SATS Credit Fund, by extending the maturity to November 2027 and providing ourselves with the option at our election to extend for one additional year. That amendment also adds up to $12 million of uncommitted additional capacity. However, we have no immediate plans to draw additional funds from this facility. Our economic priorities going forward are clear. Continue to diversify revenue streams and increase margins, grow Fold Reserve balances and scale the Fold credit card responsibly, maintain operating cost control, and continue to move Fold towards positive cash flows. With that, I'll turn it back to Will.
Thanks, Wolfe. Before we open up the line for questions, I'll leave you with one final thought. Three months ago, I said the next few months would be when investors started to see our foundation come together, and this quarter it did. We expanded into deposits, and early balances are running ahead of our expectations. We opened rewards to every user, and our Bitcoin gift card had its best quarter ever. We reached our Fold credit card target for this phase, and we're working to secure financing to take it to the next one. We extended the maturity of our only debt and adopted a new equity facility that allows us to raise up to $25 million in equity and strengthen the balance sheet. The new Fold has more assets on the platform, deeper customer relationships, and a business built to earn more from both.
We believe Fold is on the cusp of its next stage of growth and going after a bigger and more profitable market than ever before, and we have never been better positioned to capture it. Operator, please open the line for questions.
As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Dave Storms from Stonegate.
Evening, and appreciate you taking my questions. I wanted to start maybe with the TikTok gift card, and I am just thinking about comparing that to how the economics of the Kroger gift card have been in the past. Is there anything more you can tell us about maybe, obviously beyond the strength in purchasing there, but what the second transaction is for a customer that gets a TikTok gift card, maybe versus one that gets a Kroger gift card?
Hey, Dave. It is good to hear from you, and thanks for joining today. We have been very excited about the TikTok distribution channel. One of the things that we knew about the Bitcoin gift card is that number one, it is a novel product, but number two, it would be heavily dependent on the channels in which it is offered. A Kroger customer, as you mentioned, is very different than a TikTok customer. For us, we really want to make sure to look at what is the data coming through here and what differences in behavior do we see from these customers. Overall, what we see from these gift card channels is that we will see a follow-on Bitcoin buy or a follow-on gift card buy primarily, with a debit card spend coming a little bit further after. There has to be a sending them a debit card.
But the interesting thing with TikTok that is not apparent and readily available with the in-store versions is that TikTok is very tied to the content in which is created on that platform. As Bitcoin has moments of volatility spiking up or down, there's ultimately content created about that, and Fold is the only place where you can go act upon that within the TikTok ecosystem. So we actually see more follow-on purchases of these gift cards, as well as reminders to come back into the Fold app and buy more Bitcoin. So it's all very early, and like all the gift cards, we need about more months of data to look at the life cycle of these customers and what their follow-on purchases are. But what we see is they're very different.
And what I think is a success that we want to continue is that digital distribution may in fact be the larger opportunity for the Bitcoin gift card. There is simply more activity, more buying, and because it is so related to the content and social network that it's presented in, it creates a lot more moments of exposure to the product. So we think we're going to focus a lot more on replicating the TikTok success across other social networks and other digital distribution, in addition to, of course, the in-store brick and mortar that we saw with Kroger.
Understood. I really appreciate that. Maybe similar kind of question, but now related to the pass-through Bitcoin buying. Again, I know it's still early for this as well, but what kind of adoption are you seeing? Is it also driving incremental buying? Again, what are you seeing as a second interaction with someone after they have a pass-through purchase with you?
A big piece of this quarter was about removing all of the barriers to engaging with our platform, right? We know that the Bitcoin retail market is soft. That's inevitable. You see it across every single company offering Bitcoin or crypto trading. But what we really want to do is position ourselves for growth when that activity returns. So, the pass-through buys is one of several things we did to this quarter to make it simply easier and faster for someone to go from hearing about Fold or thinking about buying Bitcoin to doing that. A good example is we made our free tier on the app, so you can just download the app, no subscription required, and everyone gets rewards on the debit card, on the credit card. They get a solid Bitcoin buying experience.
But another blocker, an area of major friction, was the ability to buy Bitcoin was limited to people who actually had to deposit funds onto Fold first and then use them, which with payment rails can take several days. That lengthens the time from impulse, I want to buy or trade, to when you can actually do it. What the kind of innovation of pass-through buys is, it shrinks that to a second where you can connect your Chase account, Wells Fargo account, right when you download the app and begin buying Bitcoin. For us, that is seeing we are no longer subject to someone who maybe buys Bitcoin, uses all the funds in their Fold account, and then has to wait to replenish it. They can actually continue to buy Bitcoin through other payment sources.
And so, again, super early, but this is the exact type of behavior that we think is going to show up in the data is, number one, less time from download to initial purchase, and then two, incremental buys because we're no longer waiting for the amount of time between funding and the just friction required or that is involved in that. And so pass-through buys is really what we think is going to open up our exchange in a very similar way that we think the Bitcoin gift card is. It opens us up to more people buying Bitcoin with the payment method of their choice.
That makes a lot of sense to me. Okay. Maybe another one here. You've been talking about bringing on a financing partner to support the credit card rollout, and I completely understand that you guys are being intentional about that and finding the right partner. Just curious if you could give us a sense on what the remaining hurdles are to securing that. Is it just negotiation on the economics at this point? Is it demonstration on your end? Something else? Maybe anything you can tell us about what some of those remaining hurdles are.
Securing a facility for the credit card is perhaps the largest decision you'll make about the credit card program, even beyond building it in the first place, because they're long-term, they're large, they're deep engagements that have very fundamental effects on the economics of the program. A bad credit facility deal can really turn your economics upside down. What we've been doing is really been intentional about finding the right partner and putting those partners in competition so that we get the best possible deal that sets us up on a foundation that we can continue to be in line with our philosophy that all product lines should be profitable and built that way to start, so that all that we are looking at is simply scaling the program. We don't have to fight against our own economics.
For us, I think what you will see with the partner that we hope to announce, believe we can announce soon, is that it will be not only a very competitive rate, but also aligned with the philosophy and kind of specific way Fold has done business. Fold has really interesting assets as a company. We have Bitcoin, we have receivables, and we have demand for our credit card program. Bringing all of those together allows us to think in novel ways about how to fund a facility, and that we think taking this time ultimately is going to put us on a much stronger foundation that will make this program far more competitive and ability to scale this over time.
It has been a journey here, but really what we have been doing so far is focusing on the card, making sure it is working for our customers. Right now, it is very stringent underwriting, and that is because we are doing it off of our own balance sheet. These are really super prime cardholders that are coming on board. These cardholders are bringing their balances to the platform. So it gets this virtuous cycle going on, and the benefit of our facility is that we will be able to expand to more types of cardholders that want the card. The main thing we want to do and make sure is that it is the best possible deal, puts us on the right footing to scale this thing to many, many orders of magnitude larger than where we are at today.
Partly fair. If I could ask maybe just one more here. I just wanted to ask around the Fold Reserve. Super encouraging to see that the customers have large balances there. I know it is still early again, but as you are looking at the initial results, I mean, what has been encouraging relative to your expectations? It sounds like it is running pretty well, and it is even without layering on some of the stuff you mentioned that you would like to add down the road. I guess, what have you seen that has encouraged relative to expectations, and maybe how does that set up the opportunity for scale in 2027?
No, a big piece of our strategy with moving and focusing on balances and deposits and the close of this into Q4 and into 2027 is that we know that we have customers who have assets. They have Bitcoin, they have dollars, and there is no reason that Fold shouldn't be a great home for them to have here. Us simply being a transaction business always limited in our ability to, number one, create a great experience for them. But also, we left a bunch of economics on the table. Now, with Reserve and Lead, we get to bring these together in a way that is going to make a fundamentally more attractive program. For us, it was a question of, well, how much of people's lives are they going to bring? Typically, previous to this, we would see paycheck deposits, but they would really be spent through.
You'd spend to pay off your credit card, buy some Bitcoin, and it would go deposit down to zero, and that kind of cycle would continue over and over. Deposits create a much more stable base that allow us to have a lot more creativity on how we can build for our customers. The next question was, well, how would they look at Fold? What would they want to bring to us? We are seeing customers, again, at every single tier. To remind this group here, the tiers actually start fairly high. They start at $5,000 for the bottom Reserve tier, and they go all up to $100,000. We have multiple users, we have users at all of these tiers.
What we're seeing is both users who are trusting us with a significant amount of their assets, and for us, we are going to be continuing to build to continue that momentum. For us, I'd say it's the most encouraging thing is that the momentum is there, the activity is there at all levels, and now what the team is doing is going to be building from this new foundation of balances and deposits, and we're going to work to increase the amount of people that look to us to bring assets to the platform. We have really just gotten started. You can think of this as the kind of foundation and not the end of our balance and deposit strategy. It's really the foundation.
We've been listening a lot to customer feedback and communication and how to describe the product, and we think all of that is going to be folded into this and lead to a much stronger product, but more than anything, is one that reaches a lot more people and continues this very encouraging trajectory we see today.
Understood. Thank you for taking my questions, and good luck in the next quarter.
Thank you, Dave.
Thank you. One moment for our next question. Our next question comes from the line of Kevin Dede from JonesTrading.
Hey, guys. This is Sky Moore calling in for Kevin Dede. Thanks for taking my questions, and congrats on the rollout of Fold Reserve. Kind of building on the last question there, at a high level, as you guys look at Fold Reserve specifically, changing the revenue mix between a transaction-based and balance-based income, with the marketing right around $170 this quarter, how much do you plan to step that up as Reserve and the credit card scale?
Yeah. It's a great question. So there's two things that we think unlock our marketing. Number one, the credit card, we need to be able to scale that, so that's going to be the credit facility in place. Number two, on the deposits and balance strategy, is that we really look at this as our first rollout that we did to our existing customer base. Already, we're seeing new customers come to the platform specifically for this, but we're fine-tuning a lot of this language.
Reserve is truly a novel account type. With that, we want to make sure that it is communicated very clearly, the value proposition is obvious, and we are giving ourselves the time to soften those edges and add some things that we think are really going to allow us to, when we go and market this, really expand the funnel and, more importantly, increase conversion around it. I would say, a piece of this that just is kind of looming over this whole conversation is, the Bitcoin market is very, very soft. What Fold is doing is, we recognize that our product is now strong enough and has the breadth not just to be a niche Bitcoin rewards product, but a full financial home for people that offer very competitive rewards to them.
That type of platform should be open to more people than just those specifically seeking Bitcoin. We think this Fold platform today can really speak to every American that wants to get ahead and have their finances in a place that really works for them more. I think the last piece before growth is something you will see upcoming that allows us to speak to a mainstream audience in a way that retains our differentiation with offering Bitcoin, but expands our ability to talk to more customers and not alienate customers who may not be ready or interested in Bitcoin upfront. They might be interested in a more traditional reward type.
For us, the credit facility, the updates and continued optimization of the Reserve and rollout of our Lead's program, and then the expansion of our rewards program to speak to a mainstream audience, all of that is going to make sure our dollar goes further and farther than it would have previously, and we want to be smart about what will be one of the largest marketing pushes of the company's history.
Great. Very helpful. Thanks for that. My second question is, could you guys walk us through the trends that kind of changed the most from the June quarter into September and what you guys are seeing so far in the current quarter? Just trying to get a feel of, I guess, where the low point was as you guys are now rolling into the holiday season and the success of the TikTok Shop.
I think the main things that you saw with this quarter are, obviously, we saw incredible growth on our Bitcoin custody and trading in spite of a soft Bitcoin retail market. What we found there is that we can grow even in a soft market by showing up in more places. We believe in a hot Bitcoin market, that is going to come back to us in multiples. A lot of our strategy is how do we think about these of kind of laying the distribution lines, putting out the railroad tracks for when the market heats up again, Fold will be everywhere. We will be in your grocery aisle. We will be on your social network. We will be in your wallet.
We will have the ability to speak to customers who are looking for Bitcoin as more entrants look to it as the market dynamics change. I think that is clearly one. We see right now Bitcoin again showing a little softness, so we will see how that shows up in this quarter. We are continuing to add channels. More gift card channels have already been added, and we expect that to continue as well as with the holiday season ramping up, which is typically a strong position for us. As for the other change that you saw, I think you saw in top-line revenue, soft year-over-year, but not necessarily because it hit our bottom line or Adjusted EBITDA, but because our revenue mix on the merchant offers, we went through a transition of deciding, "Hey, where do we want customers to spend and put their payments?
Should it be through the credit card? Should it be the debit card? Should it be a gift card? Should it be a merchant offer? Which is the highest kind of margin for Fold and best experience for our customers?" We did a lot of rework on how to route those payments this year so that we would create a more efficient, I think, better business and have a better value prop for our customers. I think we learned a lot there, but I would say most of that is largely, I believe, is going to be stabilized. Obviously, the tailwind is that shopping and spending generally increases in this time. We do not look to that as a trend that necessarily needs to continue. Wolfe, I do not know if you have other trends you want to speak to here.
No, I think that covers it.
Great. Thanks very much. That is very helpful.
Thank you. One moment for our next question. Our next question comes from the line of Mike Grondahl from Northland Capital Markets.
Hey, guys. Thank you. With the TikTok Shop, can you speak to roughly what the CAC is there and how that compares to the overall for the gift cards?
Hey, Mike. It is great to hear from you. So as we know, we primarily look at the gift card as an acquisition tool, and so CAC is really important here. If you look at a bank, a typical bank is going to be spending in the hundreds of dollars for a given customer. With the way that the gift card is set up is that while there are various costs per channel, depending on what channel you are in, is that Kroger, is that TikTok, they all have a little bit of a different fee structure set up. But what we have built the program to do is that on the whole, this program largely is a program that is cost neutral so that we can acquire customers for as little as possible, and in most cases, for zero dollars.
And we are talking about a customer that has to go through KYC to get their Bitcoin gift card. It is an immense value for us for a customer to come and do that. The way that we have set up the fee structure is to make sure that we are recouping as much of those economics as possible, but also do it in a way that makes it so that more people will buy this card. We reduced our fees on this Bitcoin gift card tremendously. That did coincide with a lot of some of the growth that we saw in this last quarter, and we think that is working. Overall, at any way you want to cut it, we are acquiring customers for a fraction of what our competitors would into similar product lines.
Got it. I guess then going into the holidays, you have Kroger and TikTok. Any other brand names or large new incremental distributors?
So, we have, we are obviously with Blackhawk. We are also approved with InComm and can now be moved into their distributors. That sales process is going to take a little bit longer. I do not expect it to necessarily show up in Q4, but that is coming, and they have their own set of national brands. The other bit that we do not really talk about, but there is a long tail of partners that pick up this card every month. While they are not necessarily the size of a TikTok or a Kroger, they are all meaningfully contributing to this, and we are just adding more and more layers of distribution that persists. When Bitcoin sentiment and Bitcoin retail market gets hot, people will find us there before they find anyone else. This runs the gamut from retail environments to employee incentive programs to gifting and wedding registries to, you name it.
There is a long tail that we are constantly being sold into and getting placements. The thing to understand is that not only is Bitcoin retail sentiment low, as we have spoken about, but that also translates into partner. New partners generally want to jump on when Bitcoin is doing really well. They want to be part of that momentum and get a piece of that. When Bitcoin is not, we may not be at the top of the list for them. However, there is something that has changed now. We have the data from Kroger, from TikTok, that now we get to bring to these partner discussions and show what a success these programs can be, not only for us, but how it can affect them and their own incremental sales and their own customer engagement.
That has certainly started to pique the attention of the segment of, I think, the brands that you are talking about. We think that that is going to ultimately lead to more placements. It just has a longer sales cycle and would love Bitcoin to be a little bit higher to make some of those sales easier. No matter what, new placements are coming in every month, and we expect more of the larger brands. They just take a bit of time, but we expect that time to be less, that cycle to be smaller now that we're armed with really great data from one of the largest social networks in the world and one of the largest grocers in the world.
Got it. Then maybe just lastly, what would you say have been the two biggest challenges to get the credit facility done for the credit card growth?
I'd say there's two things. Number one is credit card economics is a very, very complex environment where you really need to have data on your customers, their profile, to know what the economics of the program is. What is the loss rates? What are the transaction sizes? What are the frequencies? What is the spend mix? Is it just travel? Is it just coffee? Is it everything? All of these things, you need the data to understand, okay, what is the actual cost of this program? What are the economics and margins of this program? Of course, the single biggest lever to the economics is the credit facility, because that's the cost of capital that we extend to every dollar costs to extend to a customer. For a part of this was us really wanting to make sure we have that data dialed in.
Now, we started rolling this out slowly back in June and July and have been ramping up. We're really only opening it up to a very super prime customer base. Most card programs need a year of data before you actually get a full sense of loss and charge-off rates. For us, we really are running ahead of expectations on many of these in terms of our charge-offs and loss fraud is really below our expectations now. So, we're getting much stronger handle on it that helps us understand what's the North Star for the right type of credit facility partner. So, that I'd say is one piece of it. Let's get the data so that we can tailor that to the right type of credit partner. I'd say the second piece here is that there's a ton of innovation happening in the credit facility space.
I would say maybe even a year ago, the only option for credit facilities were traditional lenders that really are backing most credit cards. Most of it is downstream from the large banks. It is really a kind of a product where there is not much diversity. At the same time, they have now seen a ton of competition from the likes of Stripe coming out with their new Tempo product that is bringing credit card receivables on chain. That introduces new economics, new dimensions of a credit facility that never existed before. We are also seeing digital asset lenders who just primarily lent against Bitcoin now look at, well, what does it mean to lend against receivables?
We are seeing an immense competition here that ultimately we have found, and partly why we have been so judicious about who our partner is, it is competing there on rates, on terms, on pretty much every single part of the variables in which you want to look at this. That has also been a dynamic where we have been going deep into the traditional lenders. We know our options there, but we really did not want to hitch anything to that before we really explored our options with all of these new competitors that are bringing new dynamics to the market.
I think you will see us moving in that direction, that we have found maybe a winning combination here where rates are lower, better terms, which ultimately directly go back to number one, protecting your program so it is high margin and better to scale, but also a better product for end customers.
That is helpful. Thanks.
Thank you. At this time, I would now like to turn the conference back over to Will Reeves, CEO, for closing remarks.
Thank you, Gigi. I think there is a lot to be proud of what our team built this quarter, and I think what this speaks to is really a kind of a phase shift of a new foundation for the company. We have talked a lot about moving from transactions to deposits and balances, but there is so much more coming. Reserve, Lead Bank spending accounts, pass-through bitcoin buying are really just the tip of the iceberg. This year, we rebuilt nearly everything. We built our app from scratch from the ground up. We launched our Fold Bitcoin Credit Card. We launched instant buys. We changed out our Bitcoin exchange infrastructure and custody infrastructure. You name it, almost every surface has been changed. This allows us to do now is operate from a position of speed to continue to innovate and rapidly ship updates and improvements to what we have.
I think one thing that I am looking forward to our customers is just that tight communication where we would love to hear about how you are enjoying the products, what you would like to see next, and also know that we are only getting started. This is really a whole new phase shift. The second piece is you cannot really fight gravity. When Bitcoin retail sentiment is low for a Bitcoin company, sometimes you got to build through it, and that is exactly what we did. Part of the fruit comes out of it when we realized that even though retail sentiment was low, we grew our custody and exchange revenues by 270% simply because we created a novel product and found a new great channel to market ourselves in. This is the same type of approach you are going to see us take this year.
I think the other bit is, how can we make Fold durable, not just from an economics on transactions and deposits, but how can Fold use this great platform that we have created and appeal to all Americans who want to get ahead and have simply a better financial platform that rewards them more than any of their alternatives? We believe that exists beyond just a Bitcoin customer. There are many more people who want that. I think what you are going to see from us in the coming quarter is us making a large expansion into larger TAMs that allows us to show the product to more people, have more partners, have more diverse communities, which ultimately creates a larger Fold that speaks to more customers that is still true to our core operating principles about bringing financial strength and financial freedom to Americans.
That is through Bitcoin, but that is also through everything else we are building. I wanted to say a big thank you to the team, of course, to all the investors that have been following this journey, and our customers, of course, who are using the products and helping us make them better. Thank you all for listening here, and a lot more to come.
Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.