Instacart and DoorDash plan to launch their own credit cards
Two of the biggest winners in the pandemic delivery boom are looking to launch their own credit cards.
Instacart Inc. grocery delivery service chooses JPMorgan JPM 0.34%
Chase & Co. to issue a credit card that will reward frequent users, according to people familiar with the matter. DoorDash Inc.,
which specializes in takeout delivery, is also looking to launch its own rewards credit card and has received offers from more than 10 major banks and fintech companies to release it, people familiar with the matter said.
Both Instacart and DoorDash have benefited from the growing popularity of home delivery for groceries and meals. They are betting that at least some of the increased demand will remain after the pandemic is over and hope the cards will build customer loyalty and attract new users.
Banks, for their part, see these new partnerships as a way to diversify beyond travel rewards cards, which fell out of favor with some consumers when the coronavirus pandemic virtually crippled travel. Co-branded travel cards, such as those issued for airlines or hotels, have traditionally attracted affluent consumers who also spend a lot.
JPMorgan has been selective about its co-brand partners. Many of its partners are airlines and hotels, and it also issues co-branded credit cards for Amazon.com. Inc.
and Starbucks Corp.
Her decision to sue delivery service companies suggests she is venturing into new areas.
The Instacart credit card isn’t expected to launch until next year, one of the people said. Cardholders will likely earn 5% cash back on their Instacart purchases, according to some people.
JPMorgan is also bidding on the DoorDash card, people familiar with the matter said. DoorDash is currently reviewing the offerings, which also include an offer from fintech firm Deserve, which is said to work with another fintech firm, Marqeta.
DoorDash is expected to pick the issuer in the coming weeks, some people have said.
DoorDash is also recruiting partner restaurants and stores to offer expedited rewards, promotional offers and cardholder discounts on a rotating and in some cases permanent basis, according to a paper reviewed by the Wall Street Journal and people familiar with the matter. . The RFP says the company is also interested in offering special cardholder access at events, such as hosted experiences with participating merchants.
DoorDash wants the card to encourage more people to sign up for its membership program, DashPass, according to the document and people. With DashPass, customers pay around $ 10 per month to avoid delivery charges on qualifying orders.
DoorDash, whose competitors include Uber Technologies Inc. of
Uber Eats and Grubhub Inc.,
occupies about half of the US food delivery market, according to external estimates.
Both Instacart and DoorDash have seen an increase in orders over the past year as many people have avoided shops and restaurants. Whether demand will remain this high remains to be seen. Vaccinations may encourage more consumers to venture out to grocery stores and to dinner. The two companies have diversified the types of merchants they partner with as consumers look to purchase a greater variety of items for same-day delivery. Instacart, for example, added the delivery of office supplies from Staples and home decorations from Bed Bath & Beyond. Inc.
and other traders.
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Appeared in the April 8, 2021 print edition as “Instacart, DoorDash To Brand Own Cards.”