Robinhood Markets Inc launched Tuesday a new debit card to allow investors to save money. The company is looking beyond trading to enter more consumer finance verticals and compete with fintech giants PayPal.
Robinhood stated that users can now round up their change and put it into assets of their choosing with the new cash card.
It said that the company, which is known for pioneering commission-free trading and would reward users who use this feature with a weekly bonus. Robinhood Money, an online brokerage’s new subsidiary, is offering the card.
Acorns Grow Inc and Chime, two other consumer finance apps, also offer spare change investing. This feature allows users to invest small amounts of money, which is especially appealing to younger customers.
Robinhood’s Chief Products Officer Aparna Chennapragada stated that “the younger generation is debit-primary, therefore that is a primary concern.” She also said that Robinhood was trying to capitalize upon the shift in consumer spending towards digital and debit cards.
Robinhood stated that customers will be able to keep separate accounts for spending and investing with the cash card. The cash card will replace the existing cash management product of Robinhood, which allowed customers to invest and spend cash in separate accounts.
Customers will be able to receive their paychecks via direct deposit up to two days before they are due, which is also offered by digital payments giant PayPal Holdings Ltd.
Robinhood also stated that users could choose to have a portion automatically invested in an investment fund. These new features will be offered at no cost to users, Robinhood stated.