A challenger bank (or neo bank, if you prefer) called Point launched in the U.S. with a focus on offering a debit card with rewards that match those offered by some credit cards. This is good timing. As more consumers are faced with unemployment or other economic stresses during the current recession, there has been a notable shift in card activity away from credit cards and towards debit, at least for the duration of the pandemic thus far.
Here are some of the account details as described in an article in TechCrunch:
Many challenger banks want to provide a simple banking experience for the underbanked. Point doesn’t have the same positioning. Creating a Point account is more like joining a membership program.
When you sign up, you get a debit card with some level of insurance as it’s a Mastercard World Debit card. You can expect some trip cancellation insurance, rental car insurance, purchase insurance, etc.
As the name of the startup suggests, you earn points with each purchase. You get 5x points on subscriptions, such as Spotify and Netflix, 3x points on food, grocery deliveries and ride sharing, and 1x points on everything else. Points can be redeemed for dollars — each point is worth $0.01. In addition to that, Point is going to create a feed of offers with discounts, content, events and more.
Point is different than other new challenger banks in that it isn’t in a race to the bottom to provide more and more solutions or activities for free, which is unsustainable in the long term. Point’s product does carry a fee, but in comparison to carrying a balance on a credit card, it is likely much more economical:
Due to its premium positioning, Point isn’t free. You have to pay $6.99 per month or $60 per year to join Point. Point doesn’t charge any foreign transaction fees.
You can connect your Point account with another bank account using Plaid. It lets you top up your account using ACH transfers. Behind the scenes, Point works with Radius Bank for the banking infrastructure, an FDIC-insured bank.
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group
