A debit account that rewards users for shopping at Black businesses

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The media company Urban One has launched a new digital bank account geared toward Black consumers that rewards users for shopping at Black-owned businesses.

Urban One, which targets Black Americans and city dwellers, introduced the One VIP accoount Thursday. The account comes with a prepaid debit card and customers earn one point per every $2 spent on regular purchases and 1.5 points per $2 spent on select Black-owned brands, as well as Uber, Netflix, Starbucks and other big-name merchants. They can also earn bonus points by shopping through Ampre, One VIP’s shopping network.

Customers can then redeem their points for cash back or as a donation to the Urban One Community Works Foundation, which will use the funds to support charities that serve people of color. Urban One will contribute an additional $10 per account if the cardholder meets certain requirements, such as loading and spending $500 per month.

One VIP prepaid debit card
One VIP's prepaid debit card rewards users for most purchases, but adds an extra boost for shopping at certain major brands and at select Black-owned businesses.

"We are excited to take the lead and be the first African American-owned company to provide this kind of financial solution for Black consumers," Jon Round, Urban One's senior vice president of financial services, said in a press release. "This digital financial solution and rewards program allows us to provide access, flexibility, and empowerment to our consumers, and helps to circulate black dollars in the black community."

One VIP also offers mobile check deposit and early paycheck access. Users can add their One VIP cards to mobile wallets from Apple, Android, Samsung, Garmin and Fitbit.

There are no minimum balance requirements or overdraft fees on the account, for which cardholders will pay $4.95 per month. Several challenger banks offer accounts with similar perks but charge no monthly fees. The Urban One prepaid debit cards are issued by the $1.2 billion-asset Stride Bank in Enid, Okla.

Urban One’s announcement comes on the heels of other efforts to improve Black Americans' access to financial services.

Greenwood Financial is another neobank targeting people of color and, as with One VIP, its product includes a charitable component. It was founded by the television executive Ryan Glover, the rap star Killer Mike and the civil rights leader Andrew Young. They announced that the company will provide five free meals to a family in need through the nonprofit Goodr for every account opened and let customers round up their spending and donate the difference to the United Negro College Fund, the NAACP, Goodr and other organizations.

Recently, the e-commerce site Shopify and the Atlanta-based nonprofit Operation Hope, which provides financial education to people with low or moderate incomes, announced that Shopify would contribute $130 million and Operation Hope would kick in $20 million to 1MBB, a program that will make loans and provide advice to Black-owned small businesses. (The name refers to their goal of creating 1 million new Black businesses by 2030.) First Horizon Bank in Memphis, Tenn., is also involved in the effort.

This article originally appeared in American Banker.
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Prepaid cards Digital banking Mobile banking Challenger Bank Diversity and equality Digital Banking 2020
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