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This fitness platform will pay you for working out

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Joel Lieginger, Paceline Founder, joins Yahoo Finance’s Kristin Myers to discuss the outlook on the fitness industry and the company launching its own credit card.

Video Transcript

KRISTIN MYERS: But now working out, going to the gym, being healthy can be difficult, especially when, at least for me, wine and ice cream are helping so many of us through this pandemic. So our next guest is trying to incentivize being healthy by creating a platform that will give you cash back on your credit card. So let's bring in Joel Lieginger, founder of the platform Paceline,

So Joel, you've created a way to, essentially, incentivize being healthy. You've partnered with the Railsbank to give users cash back on their card. I'm curious to know if you have plans to partner with other banks, perhaps, to do the same?

JOEL LIEGINGER: Yeah, absolutely. We believe in creating, basically, a preventive health solution in society, because health care isn't really health care, it's sick care. And there are more than 300 million healthy people in America who need to be basically kept healthy, and that by aligning material financial incentive through credit card reward systems, we can actually pay you for working out. So while we are partnering with Railsbank, it's actually our own credit card that we're launching later this year.

KRISTIN MYERS: OK, now, part of tracking that activity, and as everyone can see on the screen, essentially users are rewarded for 150 minutes. That's 2 and 1/2 hours of physical activity a week. Do you have any plans-- you mentioned that this is your card, do you have plans to also break into the wearable space as well?

JOEL LIEGINGER: So we don't believe in launching our own hardware device. In reality, we want to be device agnostic and people can track whatever they're doing, whether it's walking their dog or playing with their grandkids or being at the gym. And what's nice about the wearable market today is all of it is tracking your latent heart rate.

So whether it's resting heart rate, elevated heart rate, all of that is the most important thing to creating a healthy outcome for you. It's actually not steps. 10,000 steps is mostly irrelevant to anybody's individual health outcomes. And so what we believe in is actually incentivizing people to be healthier. And that's what's going to make a difference in preventive health in society.

KRISTIN MYERS: OK, so we did have a screen on a little bit on how it works. But talk us through how that cash back reward system really does work for some of the users.

JOEL LIEGINGER: Yeah, so when we launched the card, basically what's going to happen is the more active you are, the more points and the more cash back you get. And the whole point is, is that people should be benefiting from their physical activity in reality. And healthy people spend more money on their credit card. And one of the biggest categories in credit card spend is actually health and wellness, and there is no health and wellness rewards credit card out there. Our big innovation here is that you're going to earn that based on actually being more physically active rather than just spending more money.

KRISTIN MYERS: And what kind of success stories do you guys have, if any as yet? How many users? I won't lie. I do get rewards. I get cash back through my credit cards, usually on travel. I don't really use them that-- that much. I really feel like maybe I should check that out a little bit more to use those reward points. So-- so how does it-- how are you getting some of these folks moving and healthier?

JOEL LIEGINGER: That's a great question. So we launched just this time last year. We've grown more than 20 times just in 12 months, and we've actually just hit the number one downloaded app on the App Store in the health and fitness category, and we were actually top 40 overall for all free paid apps. And the whole point here is, is that people should be benefiting from the hard work they're putting into taking care of themselves.

And while we're launching first with this health and wellness rewards credit card, the actual plan here is over time to build the first truly dynamic underwriting for insurance because, ultimately, it's life insurers that should be the payer for preventive health in society, which currently doesn't exist. And we should be putting $5,000 to $8,000 back in people's pockets every year for simply taking care of themselves, which is the biggest benefit to not just yourself, but to society overall.

KRISTIN MYERS: OK, so I have so many questions now. I know you're starting out with incentivizing being healthy, at least in terms of that heart rate. And we have some folks over here that are like, wait, what do you mean that steps don't matter, because that's all they've been focused on lately.

I know you mentioned that it is the heart rate that's most important. Do you plan on incentivizing other things that are a part of health and wellness, perhaps quitting smoking, for example? I don't know how that would work. But what are the broader plans going forward?

JOEL LIEGINGER: Yeah, great question. So we believe in holistic health. And in particular, actually, if you look at really the basis definition for health from the World Health Organization, it's not actually just the absence of disease, but it's the presence of mental, social, and physical health. And so as all of the sort of health and wellness world is really moving towards a holistic sense of physical health, social health, mental health, and even sleep and recovery, we're building the rewards ecosystem that can appropriately nudge you in all of those directions and reward you for taking those actions.

And in particular, again, society needs help in building preventive health into the platforms that really reward and think about how we keep America healthy and moving as opposed to just trying to cure the chronically ill and the more sedentary, which, obviously, that's important, too, but we want to get to you before you get sick, and that's where building this ecosystem can become so powerful over time.

KRISTIN MYERS: I feel as if so many people are really focused on their-- their health, their well-being, mental, physical, especially throughout this pandemic, because it has been so hard for-- for, essentially, all of us.


KRISTIN MYERS: Curious to know, based on the amount of users that you guys have, the growth that you guys have experienced, what do you predict is the outlook in this space in health and wellness and also in fitness going forward, especially once the pandemic is over?

JOEL LIEGINGER: You know, what we've really seen is that we've got one of the largest data sets on, again, cross platform sort of devices, right, so Apple Watch, Fitbit, Garmin, you name it. And people, because they have more time, are actually taking care of themselves in a much more consistent and longer-term way. So rather than people going to the gym maybe just two to three days a week for, say, 90 minutes, people are actually getting in exercise much more frequently, four or five, even six times a week, even if it's just 20 minutes here or 30 minutes there.

And what we believe is that you should be rewarded to do any type of physical activity. So while Peloton and Echelon or Mirror or any of these connected health and wellness platforms have done so well, what we believe is that your holistic health is beyond just what your last workout was or your last run was. And it's not also about how fast or how far or how hard you went. It's just about that very consistent long-term health behaviors that we're trying to create to bring to society, again, because, ultimately, that's how we change preventive health.