Business has been booming for food delivery companies, whose business models aligned well with stay-at-home orders and social distancing efforts. Now, two of them, Instacart and DoorDash, are planning to launch their own credit cards to help sustain their momentum.
- Grocery-delivery service Instacart and takeout giant DoorDash are planning their own co-branded credit cards, hoping that home delivery will remain popular even after the coronavirus pandemic ends.
- Chase is slated to issue Instacart's credit card, while DoorDash is still considering bids for its co-branded card.
- DoorDash currently has partnerships with Chase and Mastercard, offering select cardholders free subscriptions and credits.
- The terms for the cards remain unknown for now.
Betting on the Stay-at-Home Trend
Both Instacart and DoorDash are cautiously optimistic that grocery- and meal-delivery services will remain popular with consumers even after the population is mostly vaccinated and more free to go out and about.
In both instances, the companies are hoping that beefing up incentives through new credit cards will keep people interested in their services and even drive new business.
Whether that bet will pay off remains to be seen, but it comes at a critical time for the industry. For example, while DoorDash is reportedly taking market share from competitors Grubhub and UberEats, it's forecasting a significant slowdown for 2021.
According to people familiar with the plan, the Instacart credit card will offer 5% cash back on purchases with the service, but it's not yet clear what the DoorDash card will offer.
For credit card issuers, co-branding deals with companies like Instacart and DoorDash could be a good way to branch out beyond travel rewards, which haven't been useful during the pandemic. Even as more people begin to travel, the industry may take a while to recover.
Instacart has already decided to partner with Chase, which has arguably the strongest travel credit card portfolio of any of the major card issuers.
DoorDash has yet to choose a card issuer but is considering bids and will likely decide on one in the coming weeks. The company currently has partnerships with Chase and Mastercard, offering select cardholders free subscriptions and credits.