SAN FRANCISCO—Looking to capture—and keep—consumers as they migrate from credit to debit during the pandemic, financial services tech provider Oxygen has introduced Elements, a tiered rewards and loyalty program for debit card holders.
Rewards available through Elements include cash-back on everyday purchases, escalating annual percentage yields, subscription savings from Netflix and Peloton, and travel-related benefits, such as standard travel insurance on delayed and lost luggage and hotel theft, and auto-rental collision-damage waiver insurance.
Oxygen reported chose the rewards it is offering based on market research.
“We knew travel, traditionally a big loyalty pillar, would come back big post-pandemic, and we are already seeing that being borne out,” Oxygen CEO Hussein Ahmed told Digital Transactions. “We’ve really created a proprietary loyalty platform that offers cashback on well-known brands like Trader Joe’s and Whole Foods yet allows for choice on many other categories like gas, rideshare, food delivery, and more.”
The rewards are being packaged in four tiers on four separate Visa-branded debit cards, each with its own rewards structure. The four cards, which are issued by The Bancorp Bank, are named Earth, Water, Air and Fire. The Water, Air, and Fire cards carry annual fees of $19.99, $49.99, and $199.99, respectively. There is no annual fee for the Earth card.
Aspirational Awards
Oxygen created four separate rewards cards to offer aspirational rewards that provide consumers variety, Ahmed said.
As the annual fees escalate, the rewards packages on the cards become richer. Earth cardholders, for example, can earn 2% cashback on purchases, while Fire cardholders can earn 6% cash back. Cardholders need to earn $10 in cashback to cash out rewards. The cash-back rewards are underwritten by ReliefClub Inc., which does business as a fintech under the Oxygen brand, according to Oxygen’s website, Digital Transactions said.
Annual fees are waived if cardholders meet initial and annual savings and spending thresholds. For example, Water cardholders must initially maintain a balance of $1,500 in their account for 30 consecutive days and/or spend $500 a month.
‘Well-Documented Movement’
“There is a well-documented movement to debit away from credit, especially with the younger cardholders we often serve,” said Ahmed. “Traditionally debit products did not offer the same benefits as credit, which presented a mismatch with today’s consumer expectation. We like to say our cardholders are rebels and trailblazers that reject the status quo, which is exactly what we are doing with Elements, reimagining what a debit product should be for the 21st-century economy.”