The US-based fintech has teamed up with Mastercard for its new card network. Currently, SoFi offers a debit card product to users as part of its SoFi Money product via a partnership with Visa, but under the new deal, the cards will now run on Mastercard's network.
In addition to issuing new cards to existing cardholders, SoFi is adding new benefits to its offering, including cash-back rewards, free cell phone insurance, and discounted airport concierge services. The fintech is also planning to launch a credit card with Mastercard.
The new Mastercard partnership helps SoFi offer a more rounded banking product to consumers. With SoFi's cash management account, which launched last year, users enjoy an annual percentage yield of 1.60% on all of their money and no account fees.
Additionally, SoFi reimburses its debit card users for any ATM fees worldwide. Another perk is a 20% cash back on all Lyft rides when paying with SoFi Money. These features will likely continue to be available after SoFi switches from Visa to Mastercard.
Adding a credit card can help the fintech further boost loyalty toward its SoFi Money platform: While the credit card space is highly competitive — US consumers have an average of nearly four credit cards — 64% of US consumers say they haven't found their ideal credit card, but believe they can, per Experian data from 2017, suggesting that plenty of consumers would be willing to try out a new credit card given the right perks. As such, the success of SoFi's new product will likely hinge on what perks the company offers, and whether they'll be enough to win over users.
Though it started out with a narrow scope, SoFi has been busy rebundling finance — and betting on both in-house developments and partnerships will likely pay off. Initially, SoFi focused on student loan refinancing, but it has since diversified its product suite.
Last year, it launched SoFi Invest, offering both active and automated investing options at no fee, in addition to a series of exchange-traded funds (ETFs). It also offers personal and home loans, and provides insurance coverage via partnerships with insurtechs like Lemonade, Root, and Ladder for home and renters, auto, and life insurance, respectively.
Building some services in-house while relying on partnerships for others will likely help SoFi bring new products to life at a quick pace via its platform, helping it streamline the user experience and remain competitive as an increasing number of fintechs are looking to become a one-stop-shop for all financial needs.