Gradifi and Radius Offer Cash-Back Toward Student Loans

Gradifi Debit CardAs part of a broader digital-first strategy, Radius Bank partnered with Gradifi, a Boston-based startup, to launch a new MasterCard debit card that will help members reduce student loans.

The new debit card will be available in the fall, the company said this morning. Here’s how it works: costumers will first need to open a checking account with Radius, which, according to CEO Mike Butler, takes six minutes online, and is totally free and paperless. From then on, cardholders will earn 1% unlimited rewards on all debit card purchases, which will be automatically applied toward any student loan through Gradifi’s platform (way better than setting aside cash-back money yourself, right?).

Radius will offer the student loan repayment program to all of its employees as well. The partnership addresses “a pain point for many customers,” Butler said at InVest 2016 last week.

A few years back, we have committed to a strategy to be the community bank of the future, and big part of that is delivering our retail product in a totally virtual way. So we closed all of our branches except for one [in Boston]. We also recognized that to move forward we need to look for affinity partnerships. And that’s how we came across many of our fintech partners today.

The bank’s fintech partnerships include a mobile payments platform LevelUp, and digital investment firm Aspiration.

Since its launch in 2014, Gradifi has gained a great deal of traction among the incumbents by offering a variety of student loan repayment services through its platform. Earlier this month, for example, the startup partnered with Citizens Bank to offer student loan refinancing services to its customers. Similar to Radius, PwC opened up the Gradifi benefit program to its employees in 2015, by distributing $1,200 through the platform annually to help reduce student loans for its employees.

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