Robinhood Takes Aim at Crypto Cash Card Investing

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Robinhood has launched a new “Cash Card” which allows users to automatically invest in crypto and stocks. 

It replaces the Cash Management card that was first introduced in 2019 and is a new way of effortlessly turning fiat money into crypto. 

Robinhood wrote: “Investing can be a powerful way to build wealth, but for many people, it can feel out of reach. That’s why we’re introducing the Robinhood Cash Card to help a new generation start their investing journey—and get rewarded—while spending on the things they need and love. The Cash Card builds on our mission to democratize finance for all by giving debit card customers the same benefits and rewards that were once reserved for credit cardholders.”

The Cash Card lets users make a purchase and then choose to round it up to the nearest dollar. So if you spend $9.20 on a cocktail, you can automatically send $.80 into a brokerage account where it can be converted to crypto.  

Customers that “invest in themselves” will earn a weekly bonus of between 10% and 100% on their weekly round-ups. This payment will be capped at $10 and decided by a “variable award algorithm”.

“The weekly bonus is our way to show our support for our customers’ investing goals,” Robinhood wrote.

Customers will also be able to get paid early, which is an increasingly popular feature offered by fintech providers like Monzo, which gives customers access to their salary before payday. With Robinhood, salaries will be accessible two days before they are paid into an account. 

The investment app promised there would be “no monthly fees, no subscription fee, no in-network ATM fees, no overdraft fees and no account minimum fees that cut into our customers’ investments”. 

It wrote: “We’ve seen a new generation change their relationship with money, moving away from credit card debt, cash, and making more digital transactions. A recent survey found that only 17% of Gen Z say a credit card is their preferred payment method, compared with 46% of millennials and 47% of baby boomers. 

“We were there for our customers at the beginning of their investment journey with commission-free trading and fractional shares. With the new Cash Card, we’ll be there with them when they spend on their daily needs—from morning coffee to weekend groceries—and help them build their investing habits for their future along the way.”

Robinhood’s chief product officer Aparna Chennapragadai said the card would appeal to young people who had not yet built up a credit score. 

“A lot more younger folks are debit-primary, first of all, either because their credit score is not built up or, with the credit card companies, they can see how they can get bogged down, they want to be more in control of their cash flows,” Chennapragada told The Verge. “So we said ‘Why shouldn’t the debit card or a cash card have the same kind of rewards? And on top of that, actually, put a line of sight on investing.’ Which none of these products today enable you to do.”

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