Instacart is introducing its first credit card, offering rewards to shoppers who use the grocery delivery service.
Partnering with Chase, Instacart is issuing the Mastercard credit card to provide cash back on grocery orders through the service, as well as other every day items. Additionally, it provides a a year of access to Instacart+, the company’s subscription program. According to the companies, the card has no annual fees attached.
“The Instacart Mastercard was designed to provide Instacart users with more value, rewards and savings,” said Doug Einstein, GM for the card at Chase, in a statement. “Whether a cardmember is stocking up on groceries for the week, refilling their pantry with household goods, ordering late-night snacks, or something in between, we wanted to create a card that ensured checking out with Instacart pays off with unlimited opportunity to earn cash back.”
When it comes to cash back, the credit card offers the following:
- 5% cash back on Instacart purchases made with more than 800 retail brands.
- 5% cash back on travel purchased through the Chase Travel Center
- 2% cash back on restaurants, gas stations, and select streaming services
- 1% cash back on all other purchases
By signing up for the credit card, shoppers can also get a year of Instacart+, the grocery ecommerce membership program that offers free delivery on orders of more than $35, as well as lower fees, credit back on certain pickup orders and other savings opportunities.
The card's debut comes a few weeks after Instacart, which recently filed confidential plans to go public in an offering that could happen this year, announced upgrades to its membership program. Instacart+ now includes the ability to share accounts between family members and allowing different members of households to collaborate on an order list. In what now looks like a foreshadowing of the credit card launched this week, the updates also included access to Instacart+ for Chase cardholders at different tiers.
The credit card allows Instacart to offer an additional entry point for customers to its business. While the cash back rewards offered aren’t only for Instacart and Chase, the card provides an incentive to use the service.
Additionally, the free year of Instacart+ provides an onramp into its subscription program. Customers of the membership program are increasingly valuable to the service, as the company detailed when it launched the upgrades to the program:
Instacart subscribers are among the company’s most engaged customers, driving superior lifetime value through increased orders, higher GTV per customer and habitual ordering than standard customers – as well as ordering from a greater diversity of retailers on the platform. On average in 2021, Instacart subscribers spent nearly two times more each month compared to non-subscribers.
Credit card tie-ins are becoming a go-to method for ecommerce marketplace looking to add signups and incur loyalty for subscription services. An offer from Walmart covered the cost of Walmart+ for American Express Platinum Card members who used their card to purchase the subscription service. Amazon has long had a Prime Rewards card with Visa, and offered incentives tied in with the recently-held Prime Day deals event including a $200 Amazon gift card and up to 10% cash back on purchases at Amazon, Whole Foods and other locations.
It shows how financial services can be part of the flywheel that attracts customers, and creates stickiness for a digital business. Following a boom in demand during the pandemic, ecommerce services are now seeking ways to keep growing for the long-term, and build loyalty. It will require not only considering what subscriptions programs offer, but also how those programs attract new members. To create new entry points, partner with others.