Comparing the Growing List of FinTech Debit Cards
It’s hard to believe there was once a time when your payment options were mostly limited to cash, credit card, or the dreaded check. Finally the debit card was introduced, giving customers access to their checking funds via a piece of plastic that looked and functioned much like a credit card. While the majority of consumers now cite debit cards as their preferred form of payment, there are many ways in which traditional debit products are lacking.
Enter the scrappy FinTech startups, who have strived to create better financial products for Millennials and everyone else. Noticing that most debit cards came with several fees and no real perks, a recent trend finds peer to peer payments apps, micro-investment tools, and other FinTech firms introducing their own twist on debit cards. In addition to erasing many of the most common fees that customers incur, some of these cards also add some enticing bonuses to lure new users.
With that, let’s take a look at the growing roster of FinTech debit cards, including some of the best perks each one has to offer.
Editor’s note: this article was last updated in March 2020 with the latest APY information following the Fed’s emergency rate cuts.
PayPal Cash Mastercard
Biggest perk: Easy access to PayPal funds
Peer to peer payment services are an obvious app type to introduce debit cards as many users carry a balance in their accounts. With that in mind it’s really no surprise that PayPal offers a debit card that allows users to access their funds and spend them wherever Mastercard is accepted. On top of that, cardholders also have access to 25,000 MoneyPass ATMs nationwide for no fee.
Aside from those basic features, the PayPal Cash Mastercard doesn’t have much else to offer. In fact it’s actually one of the least intriguing products on this list. Then again, given PayPal’s long history and mass popularity, the company might not have to resort to gimmicks to gain users like some of the younger startups.
Biggest perk: Venmo Rewards cashback
Like PayPal’s debit card offering, the original selling point of Venmo’s card was the ability to access your Venmo funds without having to transfer them to an external bank account. Moreover on their website promoting the offer they note that using the Venmo card it makes it easy to track your purchases and split them with your Venmo contacts. Plus, if you’re in need of cash, the card also provides fee-free access to MoneyPass ATMs.
However those standard features were recently overshadowed when Venmo announced the launch of Venmo Rewards. With this program, cardholders can earn cashback when using their Venmo Card at select retailers. This feature is actually powered by the cashback app Dosh, although it seems that some of the Venmo Rewards offers are exclusive to the card. Additionally, while Dosh has a $25 minimum users need to reach before they can cash out, Venmo Rewards cashback is automatically applied to customer balances.
Being the younger, hipper alternative to PayPal that it is, Venmo’s debit cards come in a variety of bright colors such as yellow, pink, blue, and green in addition to the more standard black and white. Interestingly, although the PayPal Cash card alludes to foreign transaction fees, Venmo’s FAQ notes that the card can only be used in the U.S. This also means that you can’t use your Venmo card to purchase from a foreign retailer online, even if the transaction is made in USD.
Once again, there’s wasn’t a whole lot to Venmo’s debit card aside from it maybe appealing to hardcore Venmo users. However the launch of Venmo Rewards changes my opinion for the better as this integration with Dosh seems like a no-brainer. At the end of the day it is also free so, if you’re interested, go for it.
Square Cash Card
Biggest perk: Boosts (Discount offers)
Another peer to peer service that’s diversified into debit cards in recent years is Square’s Cash app. Although Square is best known for its small business payments and point of sales solutions, the company launched Cash as a rival to Venmo, PayPal, and the like. The Cash Card then followed in 2017.
The Cash Card is the one product on this list I have some personal experience with. I’ve been using the card for over a year now and have become a fan of its Boosts feature. Boosts allow cardholders to instantly earn discounts on select restaurant and retailer purchases. In some cases these discounts are a percentage off (e.g. 10% off at Chipotle) while my personal favorite Boost grants a $1 off at any coffee shop. Sadly this particular Boost must have proven too popular for its own good as you now need to unlock it by making five other purchases on your Cash Card before you can use it — and then you can only apply it to five visits.
As a Cash Card user myself, I may be a bit biased, but I find this offering to be the best of the first three P2P options on this list. For what it’s worth, Square Cash is also my favorite P2P app to use in general, so perhaps that also plays a factor. In any case, the Boost feature shows that companies can create value for their customers by partnering with other brands (something that will come up again later). Because of this I definitely give Square credit for creating a debit card that’s actually worth using.
Biggest perk: .2% APY on your balance (*note: this is after the emergency rate cut — but more perks could be coming)
SoFi is a FinTech startup that seems to do a little bit of everything these days. While the company might be most associated with loans, they’ve recently pushed active and automated investment accounts as well. Elsewhere, they also offer their SoFi Money account and Visa (soon to be MasterCard) debit card.
Billed as a hybrid account, SoFi Money boasts that it currently pays users a .2% APY (accurate as of April 15th, 2020) on their money without charging them any monthly fees. But the lack of fees doesn’t stop there — according to their fee schedule, the card offers free or reimbursed ATM fees worldwide, $0 foreign transaction fees, and no overdraft fees (note: the transaction will just be declined in most cases).
As I briefly mentioned, SoFi is currently in the process of converting their debit cards to MasterCards. This comes as part of a new partnership between the two companies, that also promises new perks. We may have seen a preview of what these benefits might look like as SoFi Money recently ran a campaign where cardholders could get 20% off rides on Lyft when they used their debit cards.
Sure .2% might not be the absolute best APY available but it’s also not far off — not to mention that this is actually a hybrid checking account. Plus the ability to use any ATM domestic or abroad is another winner in my book. All this means that, although SoFi may be the most out of left field app on this list to have a debit card, it does make a compelling case for itself. Full disclosure: I actually signed up for a SoFi Money account, so I mean what I say.
Cost: $3 a month
Biggest perk: Instant Round-Ups
If you’re not familiar with Acorns, the app has made a name for itself with its round-ups concept for micro-investing. The app’s pitch is that users can start investing just by saving up their digital spare change. Following the success of that basic premise, Acorns has since expanded their offerings to include, among other things, a specialty debit card called Acorns Spend.
One of the features that comes with Acorns Spend is instant round-ups. Currently, without the debit card, users need to accrue more than $5 in roundups before funds are transferred to their investment account. The company also says that cardholders will have access to additional “Found Money” offers that allow users to earn cashback from retailers and restaurants that is then deposited into users’ investment funds.
After a lengthy beta period where Acorns was only shipping its Spend cards to those on the waitlist, it seems they are now openly available. However these cards come at a cost of $3 a month — although this fee also includes Acorns Core (the app’s flagship investment product) as well as Acorns Later (their retirement savings option).
Ultimately $3 may be a steep price, but this does include three products. The key here actually isn’t the card itself but the Acorns Core and Acorns Later features that come with it. Those who have sizeable balances in each of these accounts might not find that monthly fee to be much to fret over. Meanwhile those who aren’t heavy users of Acorns or don’t plan to build up their accounts to a notable balance any time soon will likely want to pass.
Cost: Card is free but Stash account is $1 a month (or 0.25% annually for investment account balances over $5,000)
Biggest perk: Stock-Back rewards
Next up is another investment app that’s come out swinging in the debit card game. Like Acorns, Stash allows users to start investing with as little as $5. Now they’re also offering customers a new way to build their portfolios by adding a clever perk to their Stash debit cards.
Last year Stash announced Stock-Back for its debit card product. Now users will be able to earn fractional shares of stock in the companies they shop at using their Stash debit cards. In fact the company says cardholders will be able to earn Stock-Back at any store in the United States. Obviously not every shop in the country is publicly traded, so Stash says it will instead issue users a stake in “Stash-approved ETFs” when a corresponding public stock is not available.
According to MarketWatch, the amount of Stock-Back shoppers will earn will depend on the retailer. For example they note that Netflix and Spotify will offer 5% on purchases, while Dunkin’ Donuts and Starbucks purchases will net users 2% back. As for everything else, cardholders will either get 0.125% back by default or 0.25% if users enable a direct deposit to their Stash account.
The concept of Stash Stock-Back is somewhat similar to FinTech app Bumped. However that service allows users to link their existing credit and debit cards in order to earn stock for their purchases. Of course the other major difference between the two is that Bumped currently allows users to choose a total of 14 companies (one from each category) among more than two dozen options instead of opening the field to every store like Stash is.
Overall Stash’s Stock-Back perk will undoubtedly earn some attention. Unfortunately I fear those who may be excited by the premise may be disappointed in the small percentage they’ll actually be earning — unless the company beefs up its participating partner roster as they say they plan to. Still this may be one to watch and hopefully gets many younger adults interested in investing.
Biggest perk: .3% APY
After more than one year and following one false start, the Robinhood Cash Management account — complete with debit card — is really here. Currently the investment app is working its way through a long waitlist, sending out cards in batches. Thankfully, I was among those who made it off the list just a couple of weeks ago.
For some history, this account was originally set to offer 3% APY on savings. Long story short: that didn’t happen. Still the .3% APY (accurate as of March 17th, 2020 after the emergency rate cut) is nothing to scoff at. Additionally the card offers fee-free access to a network of more than 75,000 ATMs, which can easily be found through the app. As I discovered, there were plenty of options right in my area, so the reach here seems pretty strong.
As an extension of Robinhood’s brokerage services, their Cash Management account makes a lot of sense. Whether you want to stash cash for potential trades (and earn interest on it in the meantime) or want a way to spend any dividends you might earn from your portfolio, this account makes those things possible. At the same time, there’s not a whole lot else to it.
While you can set-up direct deposit or transfers, there’s currently not a way to deposit paper checks. In other words, this Cash Management account isn’t the “Checking & Savings” it was originally supposed to be. Still, for what it is, I think it’s well done.
Long Game Debit Card
Biggest perk: Bonus in-app coins, games
Unlike many of the other offerings on this list that get announced months before they debut and then rollout slowly via a waitlist, the Long Game debit card pretty much came out of nowhere. One day I just opened the app and there it was — ready to ship and everything. Not only was this stealth debut impressive on its own but it was even more impressive when I learned just how novel and unique this card was.
First, in order to discuss this particular card, I need to give you a brief rundown on what Long Game is. The savings app rewards users for making deposits by giving them coins that can then be used to play mini-games for a chance to win real money. Note that, while these are games of chance, users are never gambling with their actual funds — only the coins they earn.
With that out of the way, let’s take about some of the features the debit card has. Most notable, just as Acorns rounds up transactions to the nearest dollar and puts the change into your investment accounts, Long Game’s RoundUps deposit the difference into savings (note that you can also opt-out of this feature if you so choose). Plus, when you do make purchases with your card, you’ll move closer to unlocking Prize Chests containing bonus coins and Free Plays.
As you’d expect, the Long Game debit card has no fees. However, they also seem to be without an ATM network. So, while your card will work at ATMs that accept Visa, there’s a good chance the third-party operators of said ATMs will charge you a fee.
The Long Game debit card fixes one of the issues I noted in my initial review of the app: slow transfers back to your bank account. Now you can skip that step and just make purchases with your card instead. I also think it’s fun that the card unlocks additional games and coins — plus the RoundsUps feature I most associate with Acorns is well-employed here.
That said, the Long Game debit card loses some points for not having an in-network ATM option. Additionally, while there’s always the chance that your extra coins and free play will result in winnings, there’s no guaranteed financial advantage as there would be with an option that pays interest. Still, if this debit card helps you build your savings, then it could be well worth it.
Status: Available (digital only)
Biggest perk: Cashback offers
First things first: the Mezu Card is not actually a physical debit card but a digital-only offering. Thus, in order to use it, you’ll need to manually enter the number or add it to a mobile wallet like Apple Pay, Google Pay, or Samsung Pay.
If you’re not familiar with Mezu, it’s a clever peer to peer payments app that puts an emphasis on privacy. Although it does allow users to send money to or request from contacts just as other services do, it also includes various ways to transfer money anonymously. For example one option is to have the recipient enter a four-digit number in the app in order to claim funds. Alternatively users can set up Mezu Boxes that anyone can drop money in. Now with the Mezu card, these users can quickly access their funds and spend them wherever MasterCard is accepted (well, assuming that the cashier is willing to manually enter your card number — otherwise they’ll need to accept MasterCard and contactless payments).
Since launching, Mezu has been experimenting with new features for its digital card. Most recently the company ran a campaign where cardholders could earn 20% back (up to $10) at such retailers as Walmart and Amazon as well as at quick-service spots McDonald’s and Dunkin’ Donuts. These particular offers are/were one-time use and available “while supplies last.”
I actually first learned about Mezu thanks to their press release about the Mezu Card. After trying both, I’ve been pretty impressed with each. As for the card specifically, I’ve been very intrigued by the cashback offers that they tried so far. Obviously 20% is a pretty huge deal — even if it is limited to only one use.
While the overall benefits of the Mezu Card are fairly limited, having instant access to your funds is a big win — and the creativity of a digital-only card shows a lot of promise for the future. Hopefully the company will continue to trot out special offers for the card, making it even more worth using.
In just the past couple of years, several debit card offerings from FinTech ventures have hit the market. Although some of these products merely provide customers with an easier way to spend their peer to peer payment balance, others are employing interesting perks and gimmicks to give users a reason to choose them over rewards credit cards and other options. With these early adopters seemingly catching on, it’s only more likely that additional players and perks will follow. Stay tuned!
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Also published on Medium.