Launch HN: Point (YC W19) – First Debit Card with Points
We’re Patrick, Kenan, and Sid, the founders of Point (https://trypointbank.com), a consumer digital bank focused on rewards. After being fed up with the poor customer experience and tactics of traditional banks, we did some digging into why we put up with our own subpar banks. We've discovered that the way most people end up with their current bank is by default (ex: parents set it up for them), rather than by choice. The complete opposite was the case for credit cards; credit cards were actually chosen based on their qualities.
We began to wonder why a solution that combined the rewards and benefits of a credit card, with the simplicity of a bank account didn’t exist. After extensive research and testing of various existing products, we determined that everything came up short for our personal needs. That was the problem.
Whether it was simply the lack of a clean mobile user experience, or rewards that were relevant, nothing managed to fit the bill. Since banks are a fundamental part of our everyday modern lives, we shouldn’t have to settle for a less-than-stellar experience just because that’s the current standard. That’s when we realized, we don’t have to settle. This was an exciting enough realization for us all to quit our day jobs as product managers, designers, and engineers. We decided we needed to create a revolutionary bank.
In order to solve this problem, we created a new-and-improved debit card. We are focusing our efforts on debit because it is currently the most popular payment method. Although debit is the preferred method, in the real world, there is little incentive to use one over the perks offered by credit cards. This unfortunately leads the majority of the dissatisfied group to settle for credit cards, with their offer of limited perks that typically come hand-in-hand with unavoidable debt.
Our business model is sustainable because we are partnered with a smaller regional bank and don’t have the hefty over head of a branch network. The reason we don’t see larger banks offering debit cards with rewards is because of the "Durbin Act”; a federal mandate which slashed interchange margins of banks with more than $10 billion in deposits. This was done in order to protect consumers and merchants from increasing and predatory prices that banks were trying to instill.
If successful in our mission we hope to keep the up and comers out of un-necessary credit cards and raise the standards of user experience for banks. There is no reason why dealing with your bank should be as dreadful as the DMV.
We look forward to hearing your thoughts on what we are building and are open to any and all suggestions. Feel free to drop us a line at hello@trypointbank.com and check out our waitlist on our landing page.
132 comments
[ 3.2 ms ] story [ 129 ms ] threadThis might not be a large enough of a pain point to be viable. Actually it might be detrimental to consumers who are living paycheck to paycheck. They rely on an incremental paycheck and short term credit fills the void.
Our card is designed for people who don't/can't have an elite card but want to enjoy the benefits such as spending rewards, consumer protection, and travel perks.
* What's the ATM network that you're using with no fees? Since I have good rewards credit cards that I can pay off every month, my debit card is essentially just for accessing cash and paying the very few bills I have that won't take a credit card, my debit card choice is entirely related to "no ATM fees, anywhere in the US."
* I'm a little confused about "All-in-one" including checking, savings, etc. Does that mean I'd get multiple accounts by default? Or does the debit card just pay HYS-competitive APY?
1. It's MoneyPass.
2. With Point you get a checking account and high interest savings account by default. The savings account pays out the 2% APY interest on a monthly basis.
Do you plan to add hotel and airline transfer partners to make your points more appealing?
Credit cards often have high sign up bonuses. The Sapphire Reserve launched at 100 000 points and later dropped to 50 000. If someone doesn't have one yet, why should they sign up for your debit card instead of the Chase card and putting all of their spending on it to earn the bonus?
Instead we are offering a product designed to combine some of the perks of a Chase Sapphire into a debit card which prevents you from overspending/going into debt.
Many people (especially younger millennials/gen-z) have thin credit files and a strong disdain for credit. We want to prevent folks from getting them selves into financial trouble without missing out on the good parts of having an elite rewards card.
Rebrand in the making.
2. If you succeed, you'll have to rebrand. You have a lousy and confusing name and domain (sorry for being brutally honest). We see this all the time. Rebrands are expensive as hell.
3. If you fail, it will be largely due to naming.
Can't believe YC didn't tell you that ahead.
Appreciate the brutally honest feedback, it's usually the best kind :)
I don't personally want to use a debit card for my everyday purchases, mostly for security reasons. I figure if I only use a credit card, then if the card gets compromised I can argue with my bank over the charges rather than asking them to put money back in my checking account while the fraud is investigated. Cashback on purchases is just icing on the cake.
Re security: We allow you to have full control over the card for enhanced security: Ex: You can set daily spending limits, turn ATM withdraws on/off, and get instant notifications every time your card is swiped.
With a credit card, my rewards are a partial kickback of the fees charged to the merchant. Those aren't present in a debit transaction, which may have just a small per-transaction fee that doesn't vary with purchase amount.
Where does that money come from? Is the plan based on selling demographic or purchase history data to third parties?
To any bank out there: I think if you offered a debit card that is backed by "virtual money" rather than the cardholders physical account, you would get my business in a heartbeat. The primary difference between the OP's answer is when your debit card is compromised, you are on the hook until the investigations are completed and still it is not a guarantee your funds are recovered.
you could also setup autopay against your checking account. in theory, it shouldn't be any harder to ensure you don't overdraft one time at the end of the month if you are already making sure you don't overdraft for each purchase, but everyone has their own weird hangups, so I'm not judging.
set up autopay to pay the full statement balance each month from your checking account, so you don't have the hassle of dealing with it every month. then have all other monthly bills autopaid with your credit card(s), so you get points for that too. (this is what i do.)
Some banks go above and beyond for Debit Cards but check with your bank.
What is the value of a point? You say '2x points,' but I can't find the value of a point anywhere on your website. Is it one cent = one point? How do we redeem points?
That aside, love the design and concept. :)
You're correct $0.01 = 1 point.
Initially points are redeemable for cash-back, eventually we will partner with different merchants where you will also be able to redeem points.
OOC, will this limit your growth in the long-term? What happens if you grow beyond $10B in deposits? Is the plan to partner with other small regional banks that have less than $10B in deposits, and does that circumvent the "Durbin Act"?
What would be stopping you setting up a 'savings' bank. Set a higher interest rate on that, and make it trivial to swap the money between accounts?
> Every dollar in your Point Bank Account is insured by the FDIC up to $250,000, and unauthorized charges are covered by Mastercard Zero Liability protection.
And Mastercard offers the same protection for both debit and credit card products[1].
[1]https://www.mastercard.us/en-us/about-mastercard/what-we-do/...
Ironically those protections were pushed for by the CC providers in the 1960s to encourage use of CCs. Now that CCs are ubiquitous, banks are pushing debit cards because they don't have those protections.
It's quite painful trying to get an ATM card from your bank that isn't also a debit card. Doable, but in my experience hard.
If the answers are "yes" and "no" it seems like there's almost no reason for me to pick your card over a credit card right? Unless I'm missing something big.
For fraud protection there is 0 liability and we will credit you with the disputed amount instantly and there are several security features built into the card to protect you (on/off switch for ATM withdraws, daily spending limits, virtual cards, and instant push notification).
Point is a digital bank so we offer a checking account and high interest savings in addition to the card, so product/feature wise quite a bit different from a cc.
Did you consult Apple on this? I was recently investigating Apple Developer Program T&C for APNS (Apple Push Notification Service) and they seem to expressly prohibit delivering financial transaction data over push:
> You understand and agree that in order to provide the APN and make Your Push Notifications available on iOS Products, Apple may transmit Your Push Notifications across various public networks, in various media. You acknowledge and agree that the APN is not, and is not intended to be, a guaranteed or secure delivery service, and You shall not use or rely upon it as such. Further, as a condition to using the APN or delivering Local Notifications, You agree not to transmit sensitive personal or confidential information belonging to an individual (e.g., a social security number, financial account or transactional information, or any information where the individual may have a reasonable expectation of secure transmission) as part of any such Notification, and You agree to comply with any applicable notice or consent requirements with respect to any collection, transmission, maintenance, processing or use of an end-user’s personal information.
They even vary by credit card type (rewards cards have a higher interchange rate than a non-rewards card), and by type of merchant. See the MasterCard rates at https://www.mastercard.us/content/dam/mccom/en-us/documents/..., for example.
https://www.federalreserve.gov/paymentsystems/regii-average-...
> The Board's Regulation II provides that an issuer subject to the interchange fee standard (a covered issuer) may not receive an interchange fee that exceeds 21 cents plus 0.05 percent multiplied by the value of the transaction, plus a 1-cent fraud-prevention adjustment, if eligible.
I signed up for your waiting list. I was redirected to a page with my current position in your queue. I have since lost that link and dont see a way to get back to it on your website. Can you provide a link on how to get back to this list?
Thank you, Joshua
Not sure how you're going to compete in terms of CAC when banks are spending so much on this already.
Also, MR and UR points are transferrable to a ton of partners -- not all points are created equally, MR and UR points are some of the best at 2cpp.
Overall, since you're comparing yourself with the CSR, I would much rather get a CSR with 50K UR point bonus which is worth $750 in travel. I also get $300 in travel benefits, and I can cancel the card later to avoid the second AF from hitting. And finally, I earn points faster since it's 3x on travel and dining.
We are targeting a different type of user that: 1. Do not qualify for a rewards card or have a dis-dain for credit (likely due to student loans & growing up during 08/09 crisis) 2. Not interesting to banks (yet)
1. how many points are received on non travel/dining purchases?
2. what's the value of 1 point?
I can see how this card is great for people who haven't established good credit and need to use debit cards, but I'd think that even this audience would want to get credit cards so they can get improve their credit rating.
Innovation in the space is certainly welcome, so I'm absolutely rooting for you. For now though, it's from the sidelines.
This here is the problem. This industry is heavily regulated and dominated by behemoths. You can't innovate when you are partnered with a whale. Sooner or later there will be an impedance mismatch.
Things I do not care about:
* points and loyalty programs * measly 2% APR * tracking my spending habits * how the card looks
Things I do care about:
* a card that works and gets accepted (no spurious declines because the bank thought so) * a card that works with Apple Pay (hi Revolut) * no nags, upsells, emojis, animated GIFs, or other teenager stuff (hi Revolut) * do not waste my time * have secure online access (as in, do not use SMS for 2-factor auth, because really) * ability to issue new cards quickly * ability to change my address quickly, even if I move to a different country * whether the company will disappear and/or steal my money (don't laugh, this happens, and recent Revolut scrutiny scares me)
In other words, I am looking for no-nonsense banking, and a debit card is just a small part of it.
This offering, unfortunately, seems to bring nothing new compared to Revolut.
Things I do care about in a debit card:
* cash back on transactions I can't put on a CC -- i.e. rent * OFX/Quicken APIs I can use to import transactions * the ability to choose a PIN rather than memorize a randomly assigned one * the ability to send money via western union to family from my house * is accepted at all retailers / Paypal / misc * does not lose my money
Things I do not care about because I have other banking products:
* high APR on cash balances
Things that are dumb:
* emoji * large spend alerts / restrictions * card customization
Can I just clarify that's not a typo? If you really don't want to offer the service that much, then don't? A $75 debit card (in)convenience fee just comes across as money grabbing, and harms their reputation.
The % based fees don’t make sense on large payments. Retailers pass it along too but it’s baked in the price.
One tip I tell everyone, ask for a cash price when getting quotes. Contractors, etc especially. You might save 3% on Fees or 30% because he’s not going to report it.
Only reason I can imagine they might be hesitant is because debit cards allow a customer to dispute a transaction, which can hold up capital while the dispute is resolved, and obviously the landlord might be forced to return a rent payment or two if the credit card company sides with the letter.
https://www.theverge.com/2017/9/18/16328172/sms-two-factor-a...
https://www.gimletmedia.com/reply-all/130-lizard
Point works with Apple & GPay.
You can instantly issue new virtual cards when ever you would like to.
You can update your address right from the app (2FA required).
Your balance is FDIC insured, so this isn't an issue.
Btw, Revolut isn't available in the US (yet).
Is this like privacy.com? Right now I'm using that because I can get 2% cash back while still using my debit card, and for the card controls in case some service tries to charge me for something I don't want.
I'm using Simple bank because I love the UX, but when I'm using it in conjunction with Privacy, I lose some of the benefits like the auto naming and categorization of transactions.
In our case, you would be able to get 2% cashback, have virtual cards, and a digital banks with a beautiful UX (in our biased opinion).
https://cashback.privacy.com/