FutureCard's all-digital launch last year suited its promotion of environmentally responsible spending, but after some consideration, the startup is adding a plastic version of its Visa debit rewards card.
The card is made of 85.5% recycled plastic – one of the card industry's lowest proportions of greenhouse gas-producing plastic – and not every customer will get one, said Jean-Louis Warnholz, co-founder and CEO of Future, a fintech based in Silver Spring, Maryland that aims to fight climate change.
"We're asking our members to opt in if they need a card, because there are some places you still do need a card to pay," Warnholz said, noting that most users have enrolled FutureCard in a digital wallet to pay in stores and online.
The pandemic accelerated digital and tap-to-pay technology, so about 93% of U.S. stores are contactless-enabled, prompting some experts last year to speculate on
With little more than word-of-mouth marketing and some in-store events, FutureCard, which is issued by New York City-based Piermont Bank, has attracted more than 11,000 customers in four months to its novel rewards program that relies on a proprietary card-linked offers engine and affiliate marketing partner fees.
FutureCard promises users 5% cash back on purchases made at 50,000 U.S. merchants that provide products and services that are more environmentally friendly than alternatives, such as using public transportation or buying second-hand goods. The card gives users 6% cash back at certain retail marketing partners and 1% cash back on all other purchases.
FutureCard created a proprietary ledger to track purchases in environmentally friendly categories such as mass transit, thrift stores, electric vehicle charging, bicycle services and accessories and electric scooter rental, for example. There's no cost to merchants whose goods generate rewards for the program, which sweeps cash to the customer's debit account automatically on the back end, Warnholz said.
The cash-back rewards rate FutureCard pays is far higher than other debit cards; Discover Financial Services, for example, is readying the relaunch of its cashback debit card which will provide users with 1% cash back on every debit purchase up to a total of $3,000 in purchases each month.
FutureCard says it can pay a higher rewards rate because the average price point on the types of services and merchandise that qualify for an automatic 5% cash-back reward ensures most transactions – and their corresponding rewards – are relatively small, Warnholz noted.
But FutureCard will dig deeper with its 6% cash back on higher-ticket purchases at more than two dozen merchants that have signed up for the company's affiliate-marketing program. Those include electric bicycle maker Rad Power Bikes, refurbished-electronics seller Back Market, environmentally sustainable cookware maker Our Place, and used-clothing seller For Days.
The daily transaction limit on FutureCard is $3,500 and some customers are using the card to earn significant cash-back rewards with purchases of Amtrak tickets and electric bikes, Warnholz said.
The restaurant chain Just Salad is also an affiliate marketing partner, along with food company PLNT Burger, which has promoted FutureCard at events inside Whole Foods stores, according to Warnholz.
Recently, Volkswagen of America collaborated with Future by adding the startup's "EV calculator" to
Funding for FutureCard's cash-back rewards comes through a combination of debit interchange, which it splits with the issuing bank, and from marketing fees paid directly to Future by its affiliates, Warnholz said.
FutureCard's model has some advantages, said Brian Riley, director of credit advisory services and co-head of payments at Javelin Strategy & Research.
"FutureCard has aligned itself to an eco-friendly approach and linked its bonus structure to 'green' purchases, which is interesting to some consumers pursuing sustainability," Riley said.
But FutureCard's 5% cash-back rewards promise could be costly for the fintech to maintain through marketing partnerships alone, since debit interchange tends to be less than half that of credit-card interchange, Riley said.
"The 5% model could be a loss leader for the firm," Riley said.
Future is optimistic that its proposition will continue to draw people interested in supporting companies that contribute to a healthy environment.
"We're the first card that give people 5% cash back to ride the bus," Warnholz said, noting that FutureCard will continue to champion usage of the virtual version of the card to pay online, or stored in a digital wallet like Apple Pay for in-store purchases to minimize environmental impact, Warnholz said.
