MENLO PARK, Calif.—Another fintech has entered a market that’s long been the domain of traditional financial institutions.
Robinhood Markets has launched a new debit card that allows spare change investing as it looks to expand beyond trading and into more consumer finance verticals, heating up competition with fintech giants Chime and PayPal, Reuters reported.
With the new cash card, users could choose to round up their change to the nearest dollar and invest it in assets of their choice, Robinhood said.
The company, known as a pioneer of commission-free trading, would also reward users of its new feature with a weekly bonus, it said. The card is being offered by Robinhood Money, a new subsidiary of the online brokerage.
Reunters noted that as other consumer finance apps like Chime and Acorns also allow spare change investing, a feature that lets users invest small amounts of money and is particularly appealing to younger consumers.
The Primary Focus: Younger Consumers
“The younger generation is debit card-primary, so that is a primary focus,” said Robinhood’s chief product officer, Aparna Chennapragada, adding that the company was trying to capitalize on the consumer shift towards debit cards and digital spending.
The cash card will let customers keep separate accounts for investing and spending, Robinhood said. It will replace the company’s existing cash management product, where investing and spending cash were all in their brokerage account.
Robinhood will also give customers the option to receive paychecks up to two days in advance, via direct deposit, a feature also offered by PayPal Holdings Ltd.
Users could also choose to automatically invest a portion of their paychecks, Robinhood said, adding the new features will be free.
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