Neo Financial Debuts ‘Debit Alternative’ Neo Money Card

Canadian FinTech Neo Financial has debuted what it calls a debit card alternative.

The Neo Money card, announced Thursday (March 30), is designed to help Canadians deal with the same high inflation that’s plagued the U.S., Neo said in a news release.

“Canadians who have been using debit cards have been left behind when it comes to earning rewards when they spend, and we’re thrilled to put more money into Canadians’ pockets with the launch of our Neo Money card,” Neo Financial Co-founder and CEO Andrew Chau said in the announcement.

“Not only can you earn high interest on every dollar you save, you can now earn high cashback on every dollar you spend too.”

For customers who would rather use a debit card but want the rewards that come with a credit card can offer, the Neo Money card offers unlimited cash back at more than 10,000 rewards partners in Canada.

Users can access Money at ATMs worldwide and open a Neo Money Account in under three minutes from home, the release said.

Recent research by PYMNTS has found a sharp divide along income lines when it comes to debit and credit card use.

“From a high-level view, we see that high-income consumers — those making more than $100,000 — were far more likely to pay with a credit card than low-income consumers were in December 2022,” PYMNTS wrote recently.

On the flip side, lower-income consumers — defined here as people who make less than $50,000 per year — were more likely to pay via debit card and PayPal.

PYMNTS data shows that debit cards and cash represent more than half of the total amount spent by low-income consumers when making retail purchases. Digging deeper into the particulars of those purchases, we can see that debit cards are the dominant payment method for everyday essentials such as groceries, leaving little space for alternatives.

Consumers used debit cards to make 43% of in-store grocery retail purchases and to pay 40% of online grocery sales in the last 12 months, the study found, while credit cards held a 31% share of all grocery retail this quarter, both online and in-store.

Launched in 2019 by the co-founders of SkipTheDishes, Neo Financial offers customers a variety of services, including spending, savings, mortgages and investing.

“We have all the great products and features and seamlessly integrated experiences, which is actually not very common here in Canada because the regulatory market is different here. There are not 6,000 regional banks,” Chau said last year after the company raised $145 million.