Why financial institutions should ‘Think beyond the plastic’

In this new decade, neo-banks and challenger banks are trying to provide an enhanced experience to account holders focusing on awards and many other benefits.

The current FinTech action with debit and credit cards has been influenced by the needs and shift of priorities of millennials and Gen Z, who are looking for something bigger than just a free account with a card.   

According to a 2017 study by the Boston Fed, US consumers aged 18+ make an average of 70 payments per month, with debit cards taking the first place, which leaves the cash payment method in second place and credit cards in the third place 

“Note: 2008 through 2014, results are based on the American Life Panel (APL); 2015 through 2017 results are based on the Understanding American Study (AUS) panel”

It is rational for Fintech companies to target the younger generation since they are more open to trying new products.  According to CB Insights, 60% of US bank customers say they are willing to try a financial product from a tech firm they already use, and that number rises to 73% for customers aged 18 — 34.

Debit card programs’ concepts were improved as fintechs entered the banking market through challenger banks. From cash-back benefits on all purchases, there’s something for everyone. Through their debit card, companies like Point have built a credit card-style rewards system. Rather than applying for a credit card to receive cashback on purchases or higher levels of 3% to 5%, Point offers a rewards-based system, with groceries earning 2x points and subscriptions earning 5x.

When customers see the option of getting rewarded for purchases they already make every day, they will probably switch from a traditional bank to a fintech with a cash-back option and no monthly fee. 

Fintechs are targeting their young, engaged client bases, creating products that build on their core values. SoFi [NASDAQ: SOFI], for example, enables customers to spend funds with its debit card, but while funds remain in the accounts they earn 1.10% APY. SoFi Money is integrated with SoFi’s larger product suite, allowing users to see all assets and liabilities in one place, while Square [NYSE: SQ] uses vendor partnerships to offer credit card-like rewards for its debit card, in other words, it offers instant cash boosts at popular merchants. For example, Square’s most noteworthy reward is $1 off any $1.50+ purchase from a coffee shop.


Chime, the popular neo-bank in the US, announced its  Chime Credit Builder Visa Credit Card. Through this program, users have control over how much they spend by transferring funds to their Credit Builder Secured Account and then transact on this amount wherever Visa is accepted.

Everyday transactions are paid with a credit card. At the end of the month, Chime automatically pays off the balance from the secured account. The credit card payment is reported to the 3 credit bureaus: TransUnion, Experian, and Equifax

Chime has a new way to build credit

  1. No annual fee or interest
  2. No credit check to apply
  3. No minimum security deposit required

This product has debit card functionality through its funding and payoff and doesn’t let you overspend, this way the program lets the customer establish good credit. Chime’s new credit builder program is perfect for those who would like to boost their credit while having control over their spendings.

Aspiration: “The climate change-fighting tool in your wallet”

 Aspiration, the world’s leader in empowering customers to spend, save, and shop in ways that protect the planet, originally offered a single checking-like account that gained notice by paying a high yield of 1% APY.  However, it launched its first credit card in 2019, Aspiration Zero. The first of its kind, this credit card will automatically bring the average American customer to carbon-neutral status just through regular use — with cash-back rewards as well when they do so.

It replaced its checking account with something called a “Spend & Save” account. The new account provides a consumer spending account attached to a debit card and a savings account that pays 2%. Although technically two accounts, it is designed to operate as a single Aspiration account for consumers. In addition, there are still few to no mandatory fees, and Aspiration claims that it is 100% free of fossil fuels.

  1. Deposits won’t fund fossil fuel exploration or production
  2. 55,000 free in-network ATMs
  3. 3-5% cash back on Conscience Coalition purchases
  4. Option to plant a tree with every roundup
  5. Get paid up to 2 days early

Another eco-friendly initiative Aspiration took is the Zero Footprint credit card: The card that helps you go carbon neutral. 

Each time the credit card is used by the customer, Aspiration will plant a tree through their program of reforestation, and by rounding up their purchase to the nearest dollar, the customer will have the chance to plant a tree as well.   Through the Aspiration app, members can track their progress in removing their carbon footprint. Every month, when each user achieves zero carbon emissions, Aspiration will provide up to 1% cashback for all their purchases.

This type of card helps customers build smart spending behavior.


Fintech companies are starting to act more like traditional banks with checking accounts, debit cards, and bill payment features. And frequently used products like a debit card can easily make these fintechs an integrated part of their clients’ daily lives. 

With millions of existing customers and large millennial user bases, fintechs are expanding their product lines. Younger customers are searching more and more for transparency and are looking for banks that offer more than just a free account, which is why they are shifting their interest to challenger banks

If you are a financial institution and are looking for a way to be present in this futuristic wave, we can help! Request a demo today: https://www.kapitalwise.com/demo.html

As a next-generation customer engagement automation platform for banks, credit unions, and fintech, we are here to support you on your digital transformation. You can subscribe to our newsletter here to stay on top of the latest news and happenings in the fintech digital marketing space.

#fintech #challengerbank #paymentmethod #bankingautomation #creditunions #nocodeplatform