Online Bank Aspiration Launches Debit Card That Rewards Social Responsibility
Several national retail brands have sought to attract consumers through socially responsible initiatives. Until now, the link between big banks and social responsibility has been to limit investment in some companies and encourage investment in others.
This initiative of a niche bank goes even further. Online banking Aspiration launched a new debit card that will offer customers 3% to 5% cash back when shopping at what the bank considers socially responsible businesses. Businesses include homeware, eyewear and clothing stores.
The debit card likely targets millennials who not only care about avoiding certain brands when it comes to shopping, but are also looking for meaning in their work and all aspects of their lives. Aspiration CEO Andrei Cherni said: “It gives the encouragement people need to vote with their money. We want to find every possible way to help people align their money with their morality.
Credit card payment programs are popular with consumers. Bank of America and JP Morgan Chase have similar programs that reward customers for shopping at certain stores. While some stores stand out for their social mission, others are simply strategic partners of banks. Aspiration’s initiative focuses exclusively on causes that matter to retailers, from glasses for the poor to animal shelters.
However, for established community banks as well as national banks, initiatives like this present potential communication challenges. For example, California-based Aspiration has more than two million customers and promises customers not to use profits in certain ways, such as fossil fuels. If a regional bank has a large group of customers whose income depends on that specific sector, it can be bad press for the bank.
Another potential problem could be of a religious nature. Some brands such as Hobby Lobby are well known for offering great benefits to their employees but are also associated with conservative values. A bank can win with some customers by partnering (or not) with Hobby Lobby and lose with others.
Newer brands like Aspiration have a competitive advantage as they are only four years old and have made it a priority since the brand launched. The bank has its own “impact scores” for business, and the banks were aware of the business model from the start. It is more difficult for an established brand with shareholders to be competitive using this strategy.