Durango startup Obsidian Network is launching a debit card that will allow customers to earn gift cards and discounts from companies in town and to donate to local nonprofits.
“Payment tends to be very mundane. ... But this actually lets the cardholders purchase with their conscious and make a moral decision when they make purchases,” said Adam Ahern, Obsidian’s president and chief operating officer.
The Obsidian Think Local card functions like a debit card, but it could help keep more money circulating in Durango by offering consumers rewards and showing them what percentage of their spending is done locally, Founder and CEO Travis Priest said.
The card is unique in the debit card world because it allows cardholders to earn gift cards and discounts. It also allows users to round up their purchase to the nearest 25 cents, 50 cents or $1, and the money is automatically sent to a local nonprofit of the consumer’s choice. The company has 13 nonprofits signed up and it’s accepting more.
“It’s a nice mix of ‘I can do the right thing and get rewarded for it,” Priest said.
Obsidian is launching the card in La Plata County, and Priest hopes to make it available in cities across the country. Ahern believes it is a good fit for towns that want to preserve the character that locally owned shops add to a community. The company will focus on rolling out the card in Colorado towns first.
Internet shopping continues to erode tax collections that keep city and county governments running across the country, and this could be a painless way to keep local government coffers full, Priest said.
“We are either going to voluntarily pay them (governments) with our shopping choices or we are going to involuntarily pay them with an increase in tax rates,” Priest said.
To help educate consumers, if a cardholder buys something outside the area that could be purchased in Durango, the company will send the user an email about the local alternative.
“When you can make a choice, it makes sense to buy local,” Priest said.
Priest was inspired to start his company by a community loyalty card program in Lawrence, Kansas.
He had previous experience as an entrepreneur and founded Sundrop Mobile, a company that focused on in-store phone-based loyalty programs. After his Florida company was purchased by Mercury in 2012, he joined the payment-processing company’s staff for several years.
He started working on Obsidian, a financial technology company, three years ago. Its business modal is similar to a payment-processing company. It charges businesses a fee every time its card is used to make a purchase. However, the company’s fees are lower than those charged by credit card companies, Priest said.
Obsidian staff spent six months testing its card with 20 Durango businesses. The company has added 300 local businesses to its loyalty program and is planning to add more.
The cards are issued by the Central Bank of Kansas City. They can be connected to any bank account, and they are accepted by any business that accepts Discover.
Priest pitched the idea to the three major credit card companies, and Discover saw potential in the idea, he said. Obsidian pays Discover a percentage of its fee.
When shoppers sign up for a card, they select how much money they would like to be loaded onto the card at any time, and the card will automatically reload when that amount has been spent.
The Obsidian cards aren’t designed to replace a credit card, and they have limitations. For example, they can’t be used internationally or at casinos. But they may offer a speedy alternative to a credit card in a checkout line because the cards don’t require a pin number and they don’t have a chip.
“It’s just swipe and go,” Priest said.
More information is available at thinklocalcard.com.
mshinn@durangoherald.com
