Could the death of credit turn out to be fintech’s greatest gift to humanity?
From the Cancel Student Debt movement to the rise of Buy Now Pay Later payment options, Millennials have led the way in a broad rejection of interest-based consumer financing. For those of us who vividly remember the carnival-like atmosphere of credit card companies aggressively courting new students on college campuses during the first weeks of the school year, this youth-led shift away from debt-fueled consumption has been an impressive development.
Today we learned that Point, a challenger bank based in San Francisco, California, has raised $46.5 million in Series B funding to support development of its “anti-credit card.” Point’s account and debit card offer users many of the same benefits and rewards they get with traditional credit cards, while providing them with the kind of payment flexibility they have come to appreciate with debit.
Like most debit cards, Point offers direct deposit, ATM withdrawal access, and the ability to top up your Point card with funds from another debit card. The Point card also supports contactless payments courtesy of an embedded RFID transponder, instant money transfer, and card spending controls.
However, the Point card also offers a number of rewards typically not found with debit card products. These include 5x points on subscription services such as Netflix and Spotify, 3x points on delivery services like DoorDash and ride-sharing services like Uber, and 1x points on all other transactions ranging from gasoline purchases to groceries.
Another interesting feature of Point’s rewards system is the way the company offers limited-time, cash-back rewards with specific, popular brands. Among the company’s current offerings are 15x points with Nike, Reformation, and Italic, as well as 5x points with Amazon, Whole Foods, and Starbucks.
Point also offers insurance for smartphone loss or damage, trip cancellation, and car rentals, as well as for new purchases if damaged or lost within 90 days. Becoming a Point account and cardholder costs $49 a year, and deposits are backed by Radius Bank, which was recently acquired by Finovate alum Lending Club.
Point’s Series B round was led by existing investor Valar Ventures. Also participating in the funding were Breyer Capital, YC Continuity, and Human Capital. Combined with a Series A investment of $10.5 million in the summer of 2020 and a previous seed funding round, Point has raised $60 million in total equity capital. The company said that the financing will enable it to add talent, launch new functionalities, and introduce new products.
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