Parents must opt into the automatic investment feature, and if they donβt want their funds invested in the ETFs Greenlight pre-determines are relatively safe, they can also choose to invest that cash in other ways through Greenlight investment app or opt for the cash to go directly to their bank account, Sheehan said. The Greenlight-branded card, offered through Mastercard, offers up to 3% unlimited cash back on all purchases and gives parents the option to automatically invest those cash rewards in stocks and ETFs to spend on family-related expenses, co-founder and CEO Tim Sheehan told journalist. Sheehan said the company considered designing the card so cash back accrued into a 529 plan, a tax-advantaged educational savings account parents can open on behalf of their children. Plenty of investment platforms, including Bank of America, Fidelity and Charles Schwab, offer credit cards that automatically invest cash rewards into the market, but Greenlight hopes its focus on families and their needs will help it stand out.
Consumers are able to pay without entering financial data, no need to create an account, no financial details are shared, authorization is biometric and the merchant receives the funds in real time.