In an earnings call with analysts on Tuesday, the coffee chain’s executives said they would invest in expanding customer use of the Dutch Rewards app. Between 20% and 25% of rewards transactions include stored-value activity, according to the company’s CFO.

Why should we care?
The Oregon-based coffee company, which has more than 500 locations across 13 U.S. states, may be copying a fintech-focused strategy that has worked for Starbucks, its (much larger) Seattle-based rival. By letting customers pre-load the rewards app with balances, Starbucks has become a de facto bank holding more than $1.5B in balances. (For context: 85% of U.S. banks hold less than $1B in total assets.) In possession of, essentially, a massive interest-free loan, Starbucks has had the opportunity to invest in the market or expand more aggressively. Starbucks has also seen around 10% of rewards-app balances abandoned by customers, giving the company even higher returns through digital payments. Dutch Bros. didn’t highlight this strategy in its call. It focused on customer service instead. “As more customers load funds to their accounts, we believe it can reduce transaction times, speed up our lines, and free time to create meaningful lasting connections,” said Dutch Bros. President and CEO Joth Ricci.