How does Aspiration make money?

  • Aspiration is an American personal finance company founded in 2013 by Andrei Cherny and Joe Sanberg. Cherny started the company to realize his vision of a financial institution that cared about society and the environment.
  • Aspiration’s “Pay What is Far” model encourages customers to pay whatever they like for a range of account and investment products. However, the company does charge interchange fees, wire transfer fees, and card expedition fees on cash management accounts.
  • Aspiration also makes money by collecting interest payments and an annual fee on its carbon-neutral credit card scheme. Furthermore, the company charges a monthly or annual fee for Aspiration Plus, a premium CMA.

Origin story

Aspiration is an American personal finance company founded in 2013 by Andrei Cherny and Joe Sanberg. The platform is aimed at socially responsible consumers who are tired of doing business with traditional financial institutions.

Before starting Aspiration, Cherny was a speechwriter and tackled climate and economic opportunity in both the private and public sectors. He also served alongside Republican senator Elizabeth Warren as a financial fraud prosecutor, where he observed a dire need for a financial institution that made customers a priority and had a positive impact on society and the environment.

The Aspiration platform launched online in 2015 as a brokerage offering a cash management account (CMA). The company incorporates the somewhat revolutionary pay-what-you-want model allowing ordinary American consumers who pay an amount they think is fair. In exchange, the platform provides access to environmentally and people-friendly investments that avoid companies associated with pornography, oil, nuclear power, gambling, alcohol, arms, military, and tobacco. The company also offers zero-fee individual retirement accounts (IRAs).

In August 2021, the company announced plans to go public through a merger with InterPrivate, with the SPAC assigning Aspiration an equity value of $2.3 billion. Four months later, the company posted a 645% year-over-year revenue increase for the third quarter.

Aspiration revenue generation

As noted in the previous section, the company lets its customers choose how much they would like to pay – even if that amount happens to be zero. Aspiration calls this arrangement “Pay What is Fair” because it believes that by treating its customers fairly, it will receive fairness and loyalty in return. 

The fee can be changed at any time, with ten cents in every dollar being donated to charities involved in spreading economic opportunity to American citizens. The remaining 90% is paid to portfolio managers, fund managers, and everything else from “computer servers to coffee.”

However, the Aspiration platform is not completely devoid of fees. We’ve explained some of the charges a customer may come across below.

Interchange and expedition fees

Aspiration’s unique fee structure has made it more dependent on debit card interchange fees.

These are charged to the merchant by the card issuer whenever a purchase is made from the user’s branded debit card. The card issuer then shares a portion of this revenue with Aspiration, which is typically around 1.2% of the total transaction value.

Aspiration also charges a $35 expedition fee for customers who want to receive their debit card earlier.

Aspiration Zero

Aspiration Zero is a credit card that awards users for going carbon-neutral. Every time the credit card is swiped, the company plants trees to reduce the customer’s carbon footprint and gives them 1% cashback on the purchase.

Aspiration Zero credit cards come with a $60 annual fee and a variable APR between 11.65% and 21.45%. 

Aspiration Plus

Aspiration Plus is a premium CMA offering customers unlimited free withdrawals, up to 10% cashback for eligible purchases, and the ability to plant a tree for every roundup. 

Aspiration charges $7.99/month for Aspiration Plus, reducing to $5.99/month if paid annually.

Wire transfer fees

Aspiration also charges wire transfer fees for cash management account holders:

  • Domestic transfers – $0.82.
  • Incoming international transfers – $2.50.
  • Outgoing international transfers – $15.00.

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