Revolut targets shoppers with platinum debit card as rival rewards decline

Local shoppers can earn premium reward points on debit card purchases, as a fintech company looks to capitalise on changes announced by the Reserve Bank.

Launching on Monday Revolut’s “ultra” plan will become the first ever platinum-plated debit card, offering up to $9000 a year in benefits.

It will become the first-ever platinum-plated debit card in the market.

Revolut chief executive Matt Baxby took a swipe at other card offerings, saying they are lowering their value due to the Reserve Bank changing interchange fees.

“It is a time of market disruption,” he told NewsWire.

“The Reserve Bank announced its changes to interchange and we’ve already seen some banks begin to devalue their points offering.

“If they haven’t done it yet, they will. It will flow through points, it’ll flow through interest rates offered on credit cards and it will come through in annual fees as they are the masters of recouping that fee.”

At the end of March the Reserve Bank released its long-awaited review of merchant card payment costs and surcharging.

As part of three key changes, the RBA says it is removing surcharging on debit, prepaid and credit cards across eftpos, MasterCard and Visa networks.

Instead, businesses will be required to include the entire price – including any costs to issue credit – as part of the sticker price.

Australians are slugged about $1.6bn in surcharge payments every year, while businesses pay $200m to card providers.

At the same time the Reserve Bank has lowered caps on interchange fees paid by Australian businesses and increased reporting requirements for acquirers to publish the fees they charge.

While the removal of surcharges is good news for anyone who wants to view the entire price before purchasing, critics have warned the changes will come at the expense of reward points on credit cards.

Mr Baxby forecasts the card providers will continue to reshape their offerings due to these changes by the RBA.

“It will show up in not just the trimming of the earn rates of the number of points people earn, but we’re going to see tiers introduced such that they have to hit minimum spends, or if they hit a maximum spend, the points earned will fall away,” he said.

Mr Baxby says these changes and the difference in business model of Revolut compared with traditional players helped them create “a new category in a way.”

“No one has offered a platinum-level product like this linked to a debit card rather than a credit card,” he said.

How does it work compared to other models?

Working similarly to the current credit card model, the rewards service bundles travel perks (lounge access, eSIM data, airline points), lifestyle subscriptions, investment tools or the option to buy gift cards.

Shoppers will still earn 1 Revpoint for every $1 spent on eligible debit card purchases.

The premium rewards will set shoppers back $99.99 a month or $999 a year depending on how they chose to pay.

This is an expansion of its existing model in Australia which includes its free option of standard plans before moving into paid subscriptions through its plus, premium and metal plan

Unlike traditional credit card rewards programs which can require a person to rack up debt to earn the points, Revolut works through a debit model.

This means the card holder spends their own money on purchases, both at home and overseas, with no credit check and perks that activate the moment you sign up.