The modern economy is defined in part by the digital age in which we live and operate. Technology has been becoming a larger and larger part of our everyday lives for years now. Recently though, this technological integration has seen a massive acceleration. This is largely a result of the impact of the global COVID-19 pandemic, as it forced organizations to pivot into remote and virtual operations. Many organizations were already utilizing the technology, systems, and processes that were required to successfully make this transition, which made the shift in operations rather smooth. Other organizations were forced to close indefinitely, or take an operational hiatus. Regardless, this sudden shift into a remote era brought with it a variety of other changes as well. For instance, the world of personal banking has morphed significantly.
It used to be that the banking industry was almost oligarchical in nature. There were a few big players and no one else really had a chance to break into the market. This made it difficult for consumers to find alternative options other than the few that already existed. As technology has revamped other industries before, it’s currently doing the same to banking. With a new era of banking and new philosophies on personal finance, consumers finally have some choices.
With the updated mindset and perspective taken toward personal finance and banking, there has been a flurry of new players working to make a splash. One of the issues with traditional banking is that it can be difficult, and even expensive, to get something set up as simple as a checking account with an attached debit card. This creates a barrier of entry that’s hard to surpass for many. At the same time, though, putting cash under the mattress guarantees that it won’t grow in value, makes it hard to spend in a digital marketplace, and is far from a secure solution. This sort of perfect-storm left a glaring need in the personal finance and banking marketplace. New organizations are looking to various technologies to address and fill this hole moving forward with the hopes of making debit cards and banking services more accessible for everyone.
In the pursuit of creating a more consumer-focused banking market, start-up fintech and bank-tech companies have been rolling out a wide variety of consumer-centric products and services aimed at creating a more balanced banking industry.
Over the past few years, one of the most popular products that new-age banking brands boast is some version of a debit card. However, a lot of these cards come with a twist. This is what differentiates the old banking mentality from the new one. While a traditional banking philosophy has the banks making a profit off of the money that consumers keep with them, the modern philosophy believes and adheres to the idea that consumers' assets should work on the behalf of the consumer, not the bank. As such, many of these debit cards come with some type of additional perk or series of perks. These perks are sometimes designed to mirror the types of perks that one can reap from a credit card, but on a lesser scale.
For example, some debit cards, like the ones offered by Acorn, have an instant investment feature. This means that when a consumer uses their Acorn debit card, the spare change is instantaneously deposited into an investment account, over time this grows and can become a nice little nest egg that takes almost no thought to set up at all. Just go about your daily life making normal purchases, and the Acorn card does the rest. Other debit cards, still, are set up to help consumers build credit.
In this instance, the debit/checking account operates as normal, but when a consumer uses their debit card, the bank credits that purchase. Then refunds the purchase to themselves from the consumer's debit account, which actively helps the consumer build up a credit score. This is a great avenue for consumers without a credit history, or who are just trying to improve their credit in general.
The Yotta debit card is another prime example of how the world of technology and entrepreneurship are paving the way in the banking industry. The free debit card by Yotta essentially guarantees the consumer a chance at putting money directly back into their pocket. On every single purchase a consumer makes with a Yotta debit card, there is a small chance (1 in 150) that the entirety of the purchase will be reimbursed immediately by the bank. These reimbursement chances even increase to 1 in 100 on certain purchases like dining in at a restaurant and 1 in 5 at their partners who are considered “lucky deal merchants.”
The Yotta debit card puts some luck, and cash, in your pocket, giving you a chance to spend that money twice.