12 Aug 2020DisruptorsPoint offers spending reward without risk of debtDISRUPTORS: the ideas changing industries

US challenger bank Point is positioning itself as a membership program, helping underbanked communities access the benefits of credit cards without the hassle of debt. Users are able to rack up points for every purchase they make, tapping into desires for easier access to spending benefits. We explore the insights behind this and why more people are eager to sideline credit cards.

Sophie Robinson Sophie Robinson is a behavioural analyst for Canvas8. With a background in anthropology, she’s experienced in understanding the cultural mechanisms that shape the world. When not working, she’s making documentaries for her MA programme or wild swimming.

For an annual fee of $60, or $6.99 per month, Point debit cards – which are Mastercard-accredited – let users earn points every purchase they make. The weightiest purchases are subscriptions, such as Spotify and Netflix, earning people five points, while food, groceries, and taxis reward three points, and everything else is one point. Each point is worth $0.01 and can be exchanged for dollars. In addition, there is a stream of discount offers available for users to redeem, and Point cardholders can link other accounts to their Point debit card. “I started Point as a solution about everything that is frustrating and complicated about credit cards”, says Point co-founder and CEO Patrick Mrozowski.

Point debit cards - which are Mastercard-accredited - let users earn points every purchase they makeClay Banks (2019)

Credit cards can be a slippery slope. Indeed, 55% of Americans with credit cards have debt. With high-interest rates – at 16.03% APR in late July 2020 – people can quickly accumulate debt, too, especially if they're spending more to access reward scheme benefits. Overall, the system is confusing; in fact, 45% of Americans find credit card rewards unclear. By eradicating credit and debt but still giving people incentives, Point is tapping a market of frustrated consumers who want rewards without the risk. With many people showing distrust for traditional banking, Point is winning loyalty by demonstrating that it cares about consumer debt. Dave also addresses the debt crisis by notifying people when they’re about to go into their overdraft.

Sophie Robinson is a behavioural analyst at Canvas8. She has a degree in social anthropology from the University of Manchester and always tries to deconstruct stereotypes of normality. When not questioning why, she’s watching a short film or writing a screenplay.