Robinhood Markets Inc on Tuesday launched a new debit card that would allow 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.
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 this feature with a weekly bonus, it said. The card is being offered by Robinhood Money, a new subsidiary of the online brokerage.
Other consumer finance apps like Chime and Acorns Grow Inc also allow spare change investing, a feature that lets users invest small amounts of money and is particularly appealing to 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.
The Menlo Park, California-based company will also give customers the option to receive paychecks up to two days in advance, via direct deposit, a feature also offered by digital payments giant PayPal Holdings Ltd.
Users could also choose to automatically invest a portion of their paychecks, Robinhood said. The company also said these new features would be free of charge.