Mogo Finance Technology Inc., a Vancouver-based company backed by former Dragon’s Den investor Michael Wekerle, is tackling overconsumption’s impact on climate change by issuing the country’s first prepaid Visa card to offset the carbon footprints of spenders.
The TSX-listed company’s MogoSpend account will offset one pound of CO² for every dollar spent using the card, chief executive officer Dave Feller says. The concept was prompted by research at the University of Surrey in the United Kingdom that showed 72 per cent of carbon dioxide emissions can be linked to consumption, according to Feller.
Using Statistics Canada figures on domestic greenhouse gas emissions and household expenditures, Mogo estimates that Canadians leave a carbon footprint of one third of a pound of CO² or other greenhouse gases for every dollar spent, Feller said by phone from his office.
Mogo is partnering with Vancouver-based Offsetters for the climate-change-tackling element of the card, which may see Mogo help fund wind farms, solar power installations or energy efficiency, he said. While a regular consumer might typically pay $20 to offset a tonne of CO², Mogo will get a wholesale rate, Feller said, declining to say exactly how much the offsetting would cost the company.
“The big point here is linking spending to the environmental impact,” Feller said. “Obviously we all know the focus on climate change and really, at the end of the day, it’s kind of directly linked to consumption and therefore it makes sense that you tie it directly into how people are primarily consuming through spending.”
The fintech company that Feller, 52, began with his twin brother, Greg, by issuing small loans in 2003, listed on the TSX in 2015 with a plan to disrupt Canada’s major banks with financial services on apps. Mogo’s largest shareholder at 19.4 per cent is Wekerle, who also counts the current remodelling of the legendary El Mocambo club in Toronto as one of his ventures.
Feller is betting the new card will attract new clients, not only because of the offsetting angle, but also because it doesn’t charge a fee, offers users a way to control the overspending that contributes to both financial difficulty and climate change because it’s prepaid, and gives them 1.5 per cent cashback on domestic purchases.
Spending $3,000 a month through the card would generate about $45 in cashback or more than $500 year, the company says. Foreign currency purchases earn 3 per cent cashback, it said.
“Ultimately our focus is a broad solution for all consumers, and obviously our positioning is definitely more targeted towards millennials and next generation,” Feller said. “But most Canadians are struggling in terms of being financially healthy, and typically the number one reason is overspending.”
Postmedia Network, which owns the Financial Post, holds equity warrants in Mogo as part of a business collaboration.