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Robinhood wanted to make investing easier for everyone as it is a powerful tool for wealth creation.
Robinhood Markets Inc, a pioneer in introducing commission-free trading, recently announced a new debit card called the Cash Card with eye-catching features for its customers. With this card, you can buy crypto on the go as you spend on your daily essentials or groceries. It will be offered by Robinhood Money, LLC and will replace the company’s existing Cash Management debit card, released in 2019.
Features of This New Cash Card by Robinhood
The most attractive and novel feature of the card is the roundups through which customers can invest simultaneously in crypto or stocks as they spend money. In addition to this, Robinhood would offer their customers a bonus of 10-100% on their weekly roundups. The weekly bonus would be capped at $10 and would use the ‘variable reward algorithm’ to come at the final figure. Although the reward mechanism being used can create controversy due to its addictive gamified nature, Robinhood considers it as a step towards incentivizing investing by the customers.
The second feature announced by the company is offering rewards and cash backs at select stores like H&M, Chipotle and Chevron, etc. This would help customers fight inflation while saving money when they shop at these stores. This is a work in progress and the company has not announced any specific details on the feature.
The Cash Card will provide customers with the option to send their paychecks by setting up a direct deposit account and accessing the same up to two days early. It will also offer the ‘Split your Paycheck’ feature to help customers invest in assets automatically using proceeds from this deposit.
As per the announcement made by Robinhood on their blog, the Cash Card will not hide any fee from the customers. There would be no subscription fee, no monthly fees, no overdraft fees, no minimum reserve restriction for the account and no in-network ATM fees.
Why Is the Company Updating Its Current Debit Card?
Robinhood wanted to make investing easier for everyone as it is a powerful tool for wealth creation. The Cash Card is an extension of the company’s mission to democratize finance for all. The financial services company has observed the finance activities of Gen Z citing a survey that found only 17% of them preferring credit cards compared to 46% millennials. As the new generation is more in favor of being in control of their cash flows, Robinhood wanted to offer a product that would not just give the rewards and features of a credit card but that would also help with investment activities.
Robinhood has already opened the waitlist for the public and have given the Cash Card access to a select percentage of their existing Cash Management debit card customers.
Robinhood was a brainchild of Stanford graduates Baiju Bhatt and Vladimir Tenev and was founded in 2013 in California with the aim to provide everyone and not just a chosen few, access to financial markets. It is a pioneer in offering the commission-fee trading feature and lets customers invest at their own pace. It provides a platform to its customers to trade stocks and exchange-traded funds in addition to cryptocurrencies.