Online Bank Aspiration Launches Debit Card That Rewards Social Responsibility
Several national retail brands have sought to attract consumers through socially responsible initiatives. So far, the importance of the big banks’ link with 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 3-5% cash back when they shop at what the bank considers socially responsible businesses. The businesses include housewares, eyewear, and clothing stores.
The debit card is likely targeting millennials who not only care about avoiding certain brands when it comes to shopping, but also seek meaning in their work and all aspects of their lives. Aspiration CEO Andrei Cherni said: “It provides the encouragement people need to vote with their money. We want to find all possible ways to help people align their money with their morals. “
Credit card payment programs are popular with consumers. Bank of America and JP Morgan Chase both have similar programs that reward customers for their purchases at certain stores. While some stores are known for their social mission, others are simply strategic partners of banks. Aspiration’s initiative focuses exclusively on causes of concern to retailers, from eyewear 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 its customers that they won’t use the profits in certain ways, like fossil fuels. If a regional bank has a large group of clients whose income depends on that specific industry, 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 may win with some clients by associating (or not) with Hobby Lobby and may lose with others.
New brands like Aspiration have a competitive advantage as they are only four years old and have made it a priority since the brand’s launch. The bank has its own “impact scores” for businesses, and the banks were aware of the business model from the start. It is more difficult for an established brand with shareholders to compete using this strategy.