Do business, or do good? A new corporate card from a San Francisco startup proposes both.
Expensify, a San Francisco expense-tracking software company, introduced a card for business customers in October. Starting Monday, 10% of the transaction fee Expensify gets from each swipe will be donated to a newly created charitable organization, Expensify.org, which will disburse the funds to charitable causes, CEO David Barrett said.
Retailers pay a fee of around 1% to 3% for credit card transactions, which is then split between card issuers like Expensify, the retailer’s bank, networks like Visa and Mastercard, and others. For some high-end cards, those fees help fund airline miles and other rewards. But instead of points or miles, the Expensify Card is funneling fees toward dedicated funds for specific causes.
Because card issuers only keep some of the processing fee, only a small portion of every dollar spent on the card will make it to charitable causes.
The card’s climate fund would see money from a flight booking that could then be used to plant a tree, offsetting carbon emissions for example, Barrett said. The other funds focus on fighting homelessness, meals for former foster children and their families, paying off school lunch debt, and covering travel costs for people released from prison.
Barrett said how money would be disbursed from the funds to organizations and volunteers is still developing and the focus is currently on building up each fund.
For Expensify, expanding into corporate cards was “the most obvious thing,” since its software tracks expenses. Having its own corporate card allows it, for example, to integrate bank data and receipt images for faster reimbursement. The card has no annual fee.
No well-known corporate cards appear to have similar automatic donation features. Working Assets, another San Francisco firm, got its start issuing cards that directed donations to charities selected by cardholders, but it got out of the credit card business some years ago and now focuses on its Credo Mobile business. Other co-branded cards benefit specific charities, like the World Wildlife Fund or the Susan G. Komen Foundation.
Expensify’s philanthropic angle could help it carve out a piece of the market alongside large banks like American Express and Chase as well as startups like Brex, Stripe and Divvy, said Ian Benton, a senior analyst of digital banking and payments at Javelin Strategy & Research, a Pleasanton firm which advises clients on financial products and services.
“It’s really unique,” Benton said of the donation model for a corporate card.
“I think you might be able to view this as a marketing expense,” he added, saying that the donations could “bring a number of additional people in the door.”
Barrett acknowledged the move’s marketing benefits. But, he pointed out, many reward points aren’t even redeemed: “Why wouldn’t you choose to make the world a better place?”
Expensify was founded in 2008 and has raised $38.5 million — a modest amount compared with Brex and Stripe, which have not been around as long but have together raised more than $1.5 billion.
Barrett said his company’s large customer base is an advantage over newer rivals, while it also has advantages over larger institutions, like being able to enforce customers’ policies about what expenses are allowed on a card.
“Banks are sort of being attacked from all sides,” Benton said. They “are really struggling to develop expense management and payment tools,” he added.
American Express introduced an app for business card holders which featured receipt scanning in 2012. Chase followed a year later with its Ink app, which it discontinued last year. American Express still offers a business app with expense-management features.
- UNICEF initiative mobilises gamers to mine cryptocurrency for good cause
- Photo exhibit, Skinwork, shows skin for a good cause
- A chic exhibit for a good cause
- Visa, Mastercard close to settle issues over card-swipe fees: WSJ
- Visa, Mastercard reach US$6.2 billion settlement over card-swipe fees
- Visa, Mastercard close to settling issues over card-swipe fees: WSJ
- Smashing time for a good cause
- Don't hold your breath! Unless it's for a good cause.
- Another month to swap your old phone for a good cause
- James McAvoy has celebs sign shirt at Oscars for good cause