Robinhood plans spending account service alongside new cash card

[NEW YORK] Robinhood Markets plans to launch a spending account feature alongside a new cash card with rewards, it's latest push to grow beyond its core brokerage business.

Details of the Menlo Park, California-based company's plans came from a beta version of the company's iPhone app, which has previously revealed upcoming features. The information was found by developer Steve Moser and shared with Bloomberg News.

The spending account will be operated under a subsidiary. An accompanying upcoming Robinhood Cash Card will allow spending with cashback and offer the ability to automatically invest spare change from spending. It will also provide weekly bonuses between 10 per cent and 100 per cent for invested spare change.

Vlad Tenev, Robinhood's chief executive officer and co-founder, said on a recent earnings call that the company is working on a "new experience for day-to-day spending" that will debut "in the coming months". A Robinhood spokesperson declined to comment beyond his remarks.

Robinhood currently offers a debit card as well as a cash management account that works similarly to a standard checking or savings account and integrates with its stock investing features.

The spare change feature is already offered by several other online trading companies including Acorns.com and Stash.com, both of which cater to those relatively new to online investing.

The new account will be free, with no account minimums. It will also include a feature for automatically investing a percentage or standard dollar amount from paychecks as well as an early deposit feature that will let users receive their income up to 2 days early.

Executives have long pledged to transform Robinhood into a company that offers more than stock, options and cryptocurrency trading, laying out a vision for the company to touch more aspects of customers' financial lives.

The company has more than 22.7 million users. But trading activity is dropping from its feverish 2021 levels, and Robinhood's share price has fallen more than 70 per cent since its initial public offering in July.

Robinhood bungled plans to roll out a checking and savings product in 2018. At the time the company said the Securities Investor Protection Corp (SIPC) would insure customers' money; the SIPC said Robinhood hadn't contacted it before making its announcement. Robinhood in 2019 introduced a separate cash management tool. BLOOMBERG