Zero announced the public launch today of its banking app. Zero gives users the control of a debit card to prevent overspending and combines it with a reward program common to credit cards. All members of the waitlist have been invited to apply for Zero.
How it works: To provide debit card spending with credit card rewards, Zero actually combines two accounts:
- a checking account: Zero Checking functions as a current account that holds users' money. Users can manage their account balances and spending through an app. A customer's available checking account balance effectively becomes his self-imposed spending limit, avoiding unintentional overspending.
- a credit card: Customers use Zerocard to make purchases and spend through Zero. The card currently earns 3% cash back on spending. Zerocard is available in four account levels: Quartz, Graphite, Magnesium and Carbon, each with a corresponding increase in percentage of cash back earned.
- Zerocard is issued by WebBank and is a World Mastercard that provides unlimited cash back with no category restrictions.
“Unlike big banks, Zero won't tempt consumers to overspend their way into debt,” said Bryce Galen, Founder and CEO of Zero. “We built Zero from the ground up with the latest tech, so we could give customers a more delightful and rewarding experience.”
Innovation in spending: Zero's launch follows on innovations being made to the traditional debit and credit card experience.
- Millennials are said to prefer debit cards to credit cards. But debit cards lack the rewards programs that credit cards offer. Zero provides an innovative approach so that users get the best of both types of payments.
- New payment providers love to launch cool looking cards in multiple colors made out of innovative materials. European challenger bank Revolut recently launched four new metal cards.
- Other new spending products recently launched include Binji, which provides an innovative hardware and software solution for card consolidation. Curve, which does something similar, recently raised $55 million at a $250 million valuation.