bank accounts – Innovative Words http://innovativewords.com/ Mon, 14 Mar 2022 10:45:48 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://innovativewords.com/wp-content/uploads/2021/04/default.png bank accounts – Innovative Words http://innovativewords.com/ 32 32 Why “account freezing” is a bigger problem for neobanks than for incumbents https://innovativewords.com/why-account-freezing-is-a-bigger-problem-for-neobanks-than-for-incumbents/ Mon, 14 Mar 2022 07:39:00 +0000 https://innovativewords.com/why-account-freezing-is-a-bigger-problem-for-neobanks-than-for-incumbents/ CharacteristicsAlternative loansDigital bankSavings and investment Increasing levels of fraud are being seen for banks and the end result is more legitimate customer accounts being frozen, writes Selin Bucak. Image source: Photo by Tim Gouw of Pexels Strict regulatory requirements, a desire to cut costs and a fear of personal liability have left digital banks struggling […]]]>
CharacteristicsAlternative loansDigital bankSavings and investment

Increasing levels of fraud are being seen for banks and the end result is more legitimate customer accounts being frozen, writes Selin Bucak.

Image source: Photo by Tim Gouw of Pexels

Strict regulatory requirements, a desire to cut costs and a fear of personal liability have left digital banks struggling to solve the problem of bank account closures, which can leave customers without access to critical funds for weeks and years. month.

There have been increasing reports of customers whose bank accounts have been suspended without warning since the start of the pandemic. Some have even banded together to create social media groups to highlight the issue, such as “Monzo stole our money” on Facebook.

Indeed, in the 12 months to September 2021, more than 1,000 people contacted consumer complaint resolution firm Resolver to complain about their accounts being frozen without warning.

In the whole of 2021, the four major digital banks received a total of 1,850 complaints, the bulk of which relate to account freezing. While the number of such complaints has fallen year over year, it’s still high for something that should be a niche issue, said Martyn James, consumer expert at Resolver.

Some customers have gone to court to recover the remaining money in their frozen accounts. Since the start of 2020, there have been 19 county court judgments against Monese and five against Revolut.

Banks say a sharp rise in online fraud and financial crime over the past two years, accelerated by the pandemic, which has increased online commerce, has compounded the problem.

Monese, Revolut and N26 have all said they try to resolve these situations as quickly as possible, but it depends on the specific cases. For example, AML regulations in the UK or National Crime Agency requirements specify that funds must remain frozen for a specific length of time if suspicious reporting activity is filed.

And when it comes to AML regulations, banks can face hefty fines for non-compliance, such as the €4.25 million fine and a customer limit imposed by BaFin on German digital bank N26. . This means that they must be very careful that there are no errors, as this can lead to significant costs.

“To some extent, big banks can see this type of fine as a cost of doing business, they can take a fine of this size, but not digital banks,” said John Burns, technical director of services at payment at Compliancy Services.

Because digital banks are newer and have fewer ongoing customer relationships, they have less information to immediately assess a situation when an unexpected payment or transfer occurs, he added.

Also, under money laundering laws, if suspicious activity is investigated, bank staff are not allowed to tell the customer why they froze their account, which leaves a lot of people frustrated because they don’t know what to do to regain access. If they tell the client, they risk jail time.

“The irony is that it’s something easy to fix, all it takes is a member of staff with the power and authority to look at the account ID and unblock it. But what’s happening here is that bank staff have been undertrained, told they can’t talk to people. We see people whose accounts are frozen because of a £200 transaction. You’re stuck in a situation where you can’t actually solve the problem,” said James from Resolver.

In Burns’ view, there aren’t enough people in the banks who are willing to take a stand and make the decision to release funds.

In addition to the lack of trained staff, James thinks the problem is that digital banks have automated anti-money laundering procedures to cut costs. However, he says, the algorithms lack the “common sense factor”.

This means they end up flagging accounts that shouldn’t be, sometimes with less than £50.

He added: “We are flabbergasted that this is continuing. I spoke to the banks and said what’s the problem here? Some of them seem to deny that it even happens. But it happens… The problem is that banks are torn between very important legislation, AML, and how it is interpreted. On the one hand you have regulators saying you’re not doing enough on money laundering, on the other it’s a mixed message from them saying you’re being too restrictive. Banks are not good at mixed messages.

While digital banks have been the main culprits for account closures, it is now becoming a more widespread problem, with James pointing out that over the past nine months they have also received a growing number of complaints about traditional banks.

Systems Changes

For their part, digital banks are trying to remedy the problem. But with the threat of regulatory fines and even potential jail time hanging over their staff, it’s hard to strike a balance.

N26, for example, said it has increased its investments and strengthened its measures in the areas of AFC and anti-money laundering, in particular by strengthening governance, risk and compliance functions, and is working in working closely with supervisory authorities to prevent problems.

It said it has “heavily invested” in expanding its internal financial crime team and supporting product and technology teams by 150% in 2021. It also plans to expand its business operations department. Last year, the bank pledged to invest more than 25 million euros in the fight against money laundering and to make progress in the fight against online fraud.

Monese has expanded its customer service, anti-money laundering and financial crime teams to more than 100 employees, representing more than a third of the bank’s total workforce.

Elsewhere, Revolut said around a third of its 1,500 financial products and services employees work in the AML and fraud investigation unit. In order to improve the effectiveness of its controls, so that they report more suspicious transactions and have fewer false positives, the group has increased the use of machine learning tools.

A Revolut spokesperson added that at any time a very small number of its 18 million customers worldwide could have their accounts suspended.

Despite all the system updates and the use of artificial intelligence and machine learning, there will always be legitimate customers who get caught on the net where the goal is to stop criminal activity, said a Revolut spokesperson.

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[App Friday] NiyoX has the right idea of ​​what millennials expect from banks today, but its execution is glitchy and needs fixing https://innovativewords.com/app-friday-niyox-has-the-right-idea-of-%e2%80%8b%e2%80%8bwhat-millennials-expect-from-banks-today-but-its-execution-is-glitchy-and-needs-fixing/ Fri, 11 Mar 2022 01:12:32 +0000 https://innovativewords.com/app-friday-niyox-has-the-right-idea-of-%e2%80%8b%e2%80%8bwhat-millennials-expect-from-banks-today-but-its-execution-is-glitchy-and-needs-fixing/ The problem with having a formula that works is that everyone starts using it so much that it becomes difficult to tell one from the other. Think of websites, apps or platforms that have recently stood out for you in terms of design, and you will notice how their design language is – minimalistic, some […]]]>

The problem with having a formula that works is that everyone starts using it so much that it becomes difficult to tell one from the other. Think of websites, apps or platforms that have recently stood out for you in terms of design, and you will notice how their design language is – minimalistic, some cute human figures, random emojis in text, pastel blue color, sans serif font and clean interface.

As someone who likes to use multiple fintech apps, I probably wouldn’t be able to tell one neo-banking platform from another even at gunpoint – just based on design elements.

When we compare apps like Fi and NiyoXwe’re reviewing today, you’ll see how similar they are in terms of design, although Functionality is a whole different ball game.

It’s the little things – the design elements, as this rant clearly points out – that make using one app more enjoyable than using another, especially since the basic services offered are almost the same.

Let’s move on.

NiyoX is Inasmuch asNIYO-SOLUTIONSInasmuch asonline banking platform for consumers which allows users to quickly open a bank account with just a few clicks. NiyoX works with Equitas Small Finance Bank — So when you create an account on NiyoX, your bank account will be at Equitas. NiyoX is just the technological layer on top, which is a model that every neo-banking platform follows today.

Based in Bangalore Finnew Solutions, which owns and operates consumer-oriented fintech startup Niyo, was founded in 2015 by bank executives Virender and Vinay Bagri. He raised $150 million in funding so far from Accel, Light Rock India, Beams Fintech Fund backed by Venture Catalysts, Prime Venture Partners and JS Capital among others.

Niyo offers three main products:

1. NiyoX – his neo-banking Platform

2. Global Niyoforex banking platform which offers 0% margin on exchange rates

3. Niyo Silver wealth management app which allows users to invest in mutual funds and other financial products

NiyoX is the startup most used product and has seen traction, particularly from millennials. Indeed, the startup, in the first 150 days of its launch, declared to have integrated five lakh customers — a new user almost every 30 seconds.

The NiyoX application is available on Android and iOS. On the Google Play Store, it has had over a million installs and received a 3 out of 5 stars.

App usage experience

As with any neo-banking application, registration involves entering personal information and identification details – all part of the basic KYC it takes to open a bank account, online or offline.

The first hiccup we encountered occurred after the KYC capture. the waiting screen, when NiyoX verifying your KYC details and creating an account, flashed for almost 10 minutes after which I decided to reopen the app.

It still didn’t work.

When you reconnect to the application for the first few times, it generates a OTPs which is sent to your email id and mobile number.

For some reason NiyoX’s OTPs – not just on the login screen – takes time to arrive, and if you press “resend OTP”, the first original OTP, which arrives after a good five minutes, becomes invalid. Which means you have to wait for aa few more minutes before getting the current OTP.

The good old days of trying to connect to COWIN came to mind, which was triggering, to say the least – and this OTP problem persists in different aspects of the app, like when trying to unlock/lock your virtual card.

Struggling with OTPs and long wait times

After some effort with modern technology, you come to the main homepage, which is quite aesthetically pleasing. You can find almost every basic functionality buttons in one place, without even having to scroll. There is a very useful “pending actions” bar right at the top of the app, which is good for tracking your registration and KYC verification progress.

Some noteworthy features on NiyoX:

1. The application offers interest rates of 7% on savings account, which he calls to several places – but it is only for savings of Rs 5 lakh and more. Up to Rs 1 lakh, it offers 3.5% interest, which is comparable to most other banks.

2. NiyoX integrates Niyo Silver, its wealth management offering, on the same platform, and lets you track your savings and investments on the same platform, which is a feature I haven’t seen offered on a single platform. form, so far. Fi, NiyoX’s competitor and an app we recently tested, does not yet offer mutual fund investments.

3. The spare currency investment feature is superb on NiyoX mainly because unlike other platforms including Fi which locks this spare currency into a fixed deposit, Niyo allows you to invest in a mutual fund.

For some of the currency to turn into real, usable cash, faster than it would have in a fixed deposit, that’s really helpful. And yes, apps which specifically allow that exist – but Niyo offers this functionality from within the savings account ecosystem, which means you don’t need two separate apps! It’s a feature well worth taking advantage of to partially rid yourself of the guilt that comes with buying sheet masks you don’t need on Amazon.

The app, overall, is smooth.

Again, no standout When it comes to design, but in terms of functionality – or at least what it’s trying to achieve – it’s sound. You can see all your credits and debits easily, and you don’t have to wade through the platform to easily access other options.

the the search function could be better, especially when compared to Fi’s superb search tool which presents your transaction history using any filter you choose (such as ‘transactions below Rs 500’).

Signing up for the investment and wealth management service was a real problems. The app asks you to verify/e-sign the final KYC document to open your demat account on the NSDL portal – after which for some reason it directed me to the Equitas banking portal where it requested the information connection to Equitas. website!

NiyoX, operating as a technology layer on Equitas, should not direct users to the bank website, because otherwise what is the difference between registering directly with the bank and using a neo-banking app?

It’s also worth noting that NiyoX’s Google Play Store review page is flooded with less than favorable reviews – including a few where people said they found it difficult to close your savings account with Equitas when they wanted to withdraw, signing up for the investment service was an unnecessarily stressful step to treat, OTPs took too longno response from the team for a full KYC, and even being asked to visit a physical Equitas branch for verification.

Some reviews from Google Play Store

Our final verdict is that while NiyoX has its heart in the right place and the combined savings + investment feature is sure to be a to hithis infrastructure needs some serious TLC and even a kind of overhaul. It should also make it easier for users to withdraw and close their bank accounts, without having to use Equitas’ netbanking interface as many have pointed out, or even visit the physical branch.

Maybe waiting and seeing how this app develops is the way to go, for now.

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Announcing the New TAB Bank Mobile Platform – Utah Business https://innovativewords.com/announcing-the-new-tab-bank-mobile-platform-utah-business/ Thu, 10 Mar 2022 17:30:07 +0000 https://innovativewords.com/announcing-the-new-tab-bank-mobile-platform-utah-business/ Ogden — TAB Bank today announced the launch of its latest online and mobile platform, ushering in a new era of customer experience and future capabilities for businesses and consumers. The new external banking interface and back-end platform creates a consistent experience between mobile and online banking and gives customers full control over their interactions […]]]>

Ogden — TAB Bank today announced the launch of its latest online and mobile platform, ushering in a new era of customer experience and future capabilities for businesses and consumers. The new external banking interface and back-end platform creates a consistent experience between mobile and online banking and gives customers full control over their interactions and account views.

Behind the scenes, the platform enables easier connections to new products and features with third-party app integrations, faster new account creation, and the ability to track outside funds. The completion of this platform moves TAB Bank towards a banking-as-a-service model, creating new capabilities to leverage TAB Bank accounts in everyday life.

Opening a new account with TAB Bank is now simpler and easier. Customers can be up and running with a TAB Bank account in minutes. Through third-party applications, the bank can provide almost limitless potential service offerings.

“With this new platform, TAB Bank is moving forward with bold solutions that will help our customers track and leverage their money for greater financial success,” said Curt Queyrouze, CEO and President of TAB Bank. “This enables TAB Bank to realize its vision of banking as a service. Over the coming months and years, the bank will unveil new products and features that will provide access to financial success for small businesses and consumers. We know we will succeed if we help our clients succeed financially.

Future plans for TAB Bank include adding financial tools, rewards programs and account features to more effectively manage business and personal accounts and provide personalized advice on what account holders can do to become financially stronger. These features include budgeting tools, financial strength scores, tips for saving and spending money differently, and more.

Individual customer accounts will immediately see the new interface. Professional accounts will have access to these features in the future. The bank expects more product and service announcements in the coming months.

About TAB Bank

TAB Bank is an innovative and technologically advanced bank that provides personalized banking solutions to individuals and commercial enterprises in a wide range of sectors. Our bank is and always has been a fully mobile online solution that makes banking easier and more intuitive.

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Zenith Chain Launches Centralized Exchange to Create Many Usability Options | The Guardian Nigeria News https://innovativewords.com/zenith-chain-launches-centralized-exchange-to-create-many-usability-options-the-guardian-nigeria-news/ Thu, 10 Mar 2022 09:53:00 +0000 https://innovativewords.com/zenith-chain-launches-centralized-exchange-to-create-many-usability-options-the-guardian-nigeria-news/ < Previous 1 out of 10 Next > image2 image4 picture3 image1 (1) Main image from the press release As part of the vision of Zenith chain Ecosystem, Zenith Chain is proud to announce the launch of the commercial edition of its Centralized Exchange (Zenith CEX) on March 10, 2022. This is to create extended […]]]>

As part of the vision of Zenith chain Ecosystem, Zenith Chain is proud to announce the launch of the commercial edition of its Centralized Exchange (Zenith CEX) on March 10, 2022.

This is to create extended usage options for our ever-expanding market. The Zenith centralized exchange will be the first in a series of products. The exchange will serve as a medium where cryptocurrency users can buy, sell and trade on approximately 200 cryptocurrencies and other digital assets in over 175 countries.

The centralized exchange will have the following functionality:

  • KYC Verification: Users will be able to complete the identity verification process in 2 minutes. There is also an automation system in place to ensure they get their results in less than 6 minutes.
  • Global reach: Trade from over 175 countries worldwide
  • Fast transactions: Trade and exchange assets at super-fast speed as the Zenith Smart Chain ecosystem can host over 300,000 TPS
  • P2P Trading: Users will also be able to trade certain digital currencies with each other securely. Zenith CEX will provide them with a platform to do so.
  • Spot Trading: In addition to trading tokens or coins with each other, users will be able to buy and sell cryptocurrencies on the platform. There are a significant number of tokens and trading pairs.
  • Users can store over 200 crypto assets securely.
  • Margin trading: The Zenith CEX also offers a margin trading option. Users experienced in crypto trading can also engage in margin trading to earn more profits on the Zenith CEX.
  • Launchpad: There is also a launchpad on the CEX, users will be able to access IEOs, IDOs, IGOs, INOs, etc. This launchpad will serve as a major platform where other blockchain, crypto or NFT projects can offer their cryptocurrencies or NFTs for sale.
  • Staking: Users will be able to lock in their favorite tokens and earn interest over a period of time.

Zenith Chain is an innovative solution to bring programmability and interoperability. Using Proof of Authority (POA) consensus which can support short blocking time and low fees. The most related validator candidates in staking will become validators and produce blocks. Double-sign detection and other slashing logic ensure string security, stability, and finality.

Features of the Zenith chain

ETH compatibility

Compatible with the Ethereum network and smart contracts

Scalability

Scalable consensus algorithms and custom Wasm runtimes, ensuring enterprise-level adoption.

Security

24 independent nodes operating on 51% consensus and providing security at the fox node level.

Sovereignty

Dedicated throughput/resources, fully customizable technology stack, sovereign governance.

User experience

Low mining fees, making mining and on-chain transactions more efficient. Comparable to Web2, “zero gas” transactions, instant finality (deterministic) of transactions

No developer experience

Equivalent to Ethereum, no protocol-level knowledge is required to rely on the Zenith Chain network.

Modularity

High customization, extensibility and scalability, short time to market, community collaboration

Zenith channel projects

There are a number of other present and future projects on the Zenith channel. Below is a summary

Zenith Coin

Zenith Coin is the first product developed on the Zenith chain. It is currently compatible with Ethereum (ERC-20), BNB Smart Chain (BEP-20) and Zenith Mainnet networks. It is currently available on crypto exchanges MEXC Global, Probit, Lbank, Azbit, Coinsbit, Bitmart, LAToken, and PancakeSwap.

Zenith scan

Zenith Scan is a blockchain explorer where users can check all transactions that have taken place on the Zenith chain. With any transaction detail like transaction hash or wallet address, users can find results in seconds. After revamped version and migration to bigger server, users will enjoy premium UX.

Zenith Centralized Exchange (CEX)

The Zenith Centralized Exchange is a product that is almost ready to release. It offers spot trading, margin trading, futures trading, peer-to-peer trading, and direct deposit. It also features a launchpad for listing new products, staking, and initial exchange offerings (IEOs). To ensure the safety of digital assets on the exchange, they will be stored externally on a cold wallet. The confirmed release date of the Zenith CEX is March 10, 2022.

Zenith Multi-Chain Wallet

As its name suggests, the Zenith Multi-Chain Wallet is a crypto wallet that provides maximum security. To further ensure scalability, this digital wallet will be compatible with most blockchains and their respective networks. This includes BTC, ERC-20, BSC 20, TRC-20, ZRC-20 and many more. This digital wallet is expected to go live after the launch of the Zenith CEX.

Zenith Decentralized Exchange (DEX)

The release of Zenith DEX will come after the release of Zenith CEX. Zenith DEX will offer security and decentralization. There will be multiple liquidity pools, allowing crypto holders to contribute or buy.

Zenith Pay

Zenith Pay is the first product from Zenith Chains that seeks to bridge the gap between blockchain technology and orthodox technology. This product will connect cryptocurrency wallets to bank accounts. In this regard, users will be able to withdraw tokens directly to local bank accounts as fiat currencies. Similar to crypto ATMs. However, it will be deposited directly into your bank account.

Metaverse Zenith

The Zenith Metaverse is still a forward-looking product. However, Zenith Chain remains perfectly suited for the development of a Metavserse. It is compatible with smart contracts and will make it easier to mint NFTs. Considering the low fees, Zenith Chain provides a very effective foundation for developing a metaverse.

www.zenithchain.co

https://twitter.com/zenithchain_co

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How the war in Ukraine is affecting many financial industries https://innovativewords.com/how-the-war-in-ukraine-is-affecting-many-financial-industries/ Fri, 04 Mar 2022 00:29:15 +0000 https://innovativewords.com/how-the-war-in-ukraine-is-affecting-many-financial-industries/ Powell: Fed to proceed cautiously with rate hike amid Ukraine dispute Federal Reserve Chairman Jerome Powell said Wednesday that the central bank still plans to raise interest rates despite the “very uncertain” economic effects of the war in Ukraine. “Ultimately we will continue, but we will proceed with caution as we learn more about the […]]]>

Powell: Fed to proceed cautiously with rate hike amid Ukraine dispute

Federal Reserve Chairman Jerome Powell said Wednesday that the central bank still plans to raise interest rates despite the “very uncertain” economic effects of the war in Ukraine. “Ultimately we will continue, but we will proceed with caution as we learn more about the implications of the war in Ukraine,” Powell told the House Financial Services Committee. In an unusually clear comment, the senior central bank official added that he backs raising short-term interest rates by 0.25% at the upcoming March 15-16 policymaking meeting. . the central bank to raise interest rates more aggressively through a “double” interest rate hike of 0.50%, which had not happened since 2000. [Yahoo Finance]

Ukraine has raised over $54 million as Bitcoin donations pour in to support war on Russia

Donations of cryptocurrencies like bitcoin and ethereum are pouring into Ukraine as the war with Russia enters its second week. Since the February 24 invasion of Moscow, more than 102,000 crypto-asset donations, totaling $54.7 million, have been made to the Ukrainian government and Come Back Alive, an NGO that supports the military. Accepting donations in crypto is new for the Ukrainian government. Until Saturday, all donations had to go through traditional payment channels, but on February 26, the government decided to get creative. [CNBC]

Visa and Mastercard block Russian financial institutions after sanctions

US payment card companies Visa and Mastercard have blocked several Russian financial institutions from their network, complying with government sanctions imposed following Moscow’s invasion of Ukraine. Visa said it was taking swift action to ensure compliance with applicable sanctions, adding that it would donate $2 million for humanitarian relief. Mastercard also pledged to contribute $2 million. In 2021, around 4% of Mastercard’s net revenue came from activities inside, inside and outside of Russia. Meanwhile, business within, inside and outside Ukraine accounted for 2% of its net income. [Reuters]

75% of Americans have missed credit card payments due to Covid-19

A new survey has found that Covid-19 has added pressure on the personal finances of many households. In fact, more than three-quarters of respondents admitted to making a late credit card payment during the pandemic or missing a payment entirely. If you’re one of the many Americans who aren’t aware of the benefits included on their specific card, you’re not alone. According to our survey, only 29% of cardholders strongly agree that they understand the benefits of their card. Forty percent of cardholders are dissatisfied with interest rates according to this survey, making it the number one source of frustration when it comes to credit cards. [Forbes]

Paceline Introduces Cash-Back Credit Card That Doubles Your Workout Rewards

Paceline, an app that rewards you for your physical activity, announced that its Paceline Visa Signature card is now open for applications as the first cashback credit card that “connects your health and finances through its wellness platform. be unified”. This unique card not only rewards you for spending more, but rather inspires you to seek better health and finances together. And so far, the app has proven popular as over 500,000 Paceline app users have logged over 2 billion workout minutes and redeemed $4 million in rewards.. [CNBC]

Few Americans have a credit card balance of $0 every month

As credit card debt among Americans continues to grow and paying with plastic becomes more common, a new survey of credit card usage from Lantern by SoFi finds that only 13% of respondents have a balance $0 month over month. The most common credit card balance people carry ranges from $1 to $2,500, with 40% of people reporting carrying this amount monthly. A small percentage (7%) reported having a balance of $10,000 or more. SoFi also reported that women were 1.5 times more likely to have a zero balance on their card than men. In fact, 16% of women said they had “no regrets” about their credit card purchases. [Fox Business]

Consumers Prefer Physical Gift Cards, Despite Digital Growth

Physical gift cards are still preferred by just over half (54%) of consumers, according to new research from payment company Fiserv, despite the rise of digital cards. This is similar to data from a 2019 study which also showed that physical gift cards were preferred by both buyers and recipients, although more of those who gave than those who received had a preference for the gift card. tangible map. But just as the Covid-19 pandemic has accelerated payments innovation, it has fueled the rise of digital gift cards: in the past two years, 48% of consumers surveyed said they had purchased more digital gift cards than physical cards. About 37% have stored a gift card on a mobile app, and a third load the gift cards they receive into their mobile wallets. [Retail Dive]

JPMorgan’s secret project aims to push the bank deeper into the growing private enterprise market

JPMorgan Chase is preparing to go all-in on private companies. Over the past year, the bank has quietly hired programmers and created products for a new fintech company that aims to provide a range of services to start-ups and investors around the world. The company is known internally by the code name “Project Bloom” because of its focus on helping private start-up companies grow. CEO Jamie Dimon is investing aggressively to help his bank battle fintech companies, and executives see an opportunity to create a winner in private markets before startups can dominate the space. A key part of Project Bloom is a digital network for JPMorgan clients that will connect start-ups with investors, helping them with fundraising. [CNBC]

Most Small Banks Avoid the Buy Now Pay Later Market

An overwhelming majority of small banks are avoiding the buy now, pay later market, according to American Banker, citing an IntraFi Network survey showing that 81% have little or no interest in it. The publication reported that only 2% responded that they currently offer BNPL or plan to do so. Fourteen percent said they were interested in getting started, but wanted to do so by partnering up. [Business Insider]

94% of Mexican consumers use mobile banking

A recent report found that 94% of Mexican consumers use mobile banking apps or online banking, even though the country has a large unbanked population. The report also shows that alternative mobile payment services – those not tied to traditional bank accounts – are even more popular in Mexico, with 96% of respondents using them. These results indicate that smartphones are likely to continue to play a major role in Latin America’s online banking ecosystem, especially as social commerce (purchases made using apps or social media platforms) also increasing in the region. The report notes that half of all consumers surveyed in the countries of Argentina, Brazil, Colombia and Mexico have made purchases from social commerce, a sign that this channel could also see substantial growth in the coming years. [PYMNTS]

How to Prepare for Buy-Now-Pay-Later Purchases Showing Up on Credit Reports

People using buy-it-now and pay-later services such as Klarna and Afterpay take note: these purchase and payment records will soon appear on credit reports. Equifax said it would begin recording the popular “paid-in-four” installment loans, which have attracted millions of buyers but have largely not been tracked by traditional credit-reporting methods. The move is part of a broader effort by the three major credit bureaus to provide lenders with a broader view of a borrower’s financial obligations. [The Wall Street Journal]

Credit card application rules by issuer

While the number of credit cards has increased with the generosity of welcome bonuses, issuers have also made these cards harder to obtain. There is a litany of rules regarding endorsements, eligibility for welcome bonuses, and how many cards you can have. Navigating all these rules can be confusing and quite stressful. Here’s an overview of all credit card enforcement rules broken down by issuer. [Bankrate]

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Smart Bitcoin Investments Educates Investors on the Best Ways to Buy Bitcoin Using a Bank Account https://innovativewords.com/smart-bitcoin-investments-educates-investors-on-the-best-ways-to-buy-bitcoin-using-a-bank-account/ Sun, 27 Feb 2022 18:36:38 +0000 https://innovativewords.com/smart-bitcoin-investments-educates-investors-on-the-best-ways-to-buy-bitcoin-using-a-bank-account/ Educating Investors on How They Can Buy the World’s Most Popular Decentralized Asset Fontana, California, February 27, 2022, ZEXPRWIRE, Bitcoin is the most popular decentralized asset in the world and can be easily exchanged for dollars through many exchanges. Many exchanges, including Coinbase, Kraken, Gemini, Bittrex, and many more, support buying and selling cryptocurrency using […]]]>

Educating Investors on How They Can Buy the World’s Most Popular Decentralized Asset

Fontana, California, February 27, 2022, ZEXPRWIRE, Bitcoin is the most popular decentralized asset in the world and can be easily exchanged for dollars through many exchanges. Many exchanges, including Coinbase, Kraken, Gemini, Bittrex, and many more, support buying and selling cryptocurrency using bank accounts as a linked payment method.

Bank account is a preferred payment method for many people due to its low fees compared to credit or debit card purchases. Many users also consider the security of a banking institution and the custodial services available to them. For these reasons, depositing and withdrawing funds in an exchange using a bank account is a good option for professional and institutional traders.

“Bitcoin is an opportunity for anyone to be their own bank in a decentralized way,” says Jeffrey Ito, founder of Smart Bitcoin Investments, “Although Bitcoin does not offer customer support, it can be used as an asset digital backed by a blockchain that can be transferred to other Bitcoin wallet holders easily and securely.

There are many bank transfer methods you can use to instantly buy bitcoins worldwide. Here is a selection of guides to some of the most popular types of bank transfers.

It’s a good idea to research the pros and cons of all online banking and wire transfer options that your bank of choice has made available to you when opening a bank account or sending money abroad.

About Smart Bitcoin Investments

Smart Bitcoin Investments (SBI), founded by longtime entrepreneur and bitcoin enthusiast Jeffrey Ito, is dedicated to creating education that meets the public interest in bitcoin and alternative asset investments worldwide and helps investors make smart, informed decisions.

Media Contacts

Smart Bitcoin Investments

14109 Bluewood Drive

Fontana, CA 92337

Telephone: +1 (833) 863-2020

E-mail: [email protected]

Website: https://www.smartbitcoininvestments.com

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Tiiik prepares to bring DeFi savings to the masses https://innovativewords.com/tiiik-prepares-to-bring-defi-savings-to-the-masses/ Thu, 17 Feb 2022 18:00:00 +0000 https://innovativewords.com/tiiik-prepares-to-bring-defi-savings-to-the-masses/ The eye-watering returns are made possible by pledging stablecoins, which can be borrowed by others who pay interest. Lenders also receive income from collateral pledged by borrowers, to secure blockchain networks. Initially, Tiiik will provide TerraUSD (UST) in the Terra blockchain. Governed by smart contracts, DeFi lending systems rely on a principle of overcollateralisation: if […]]]>

The eye-watering returns are made possible by pledging stablecoins, which can be borrowed by others who pay interest. Lenders also receive income from collateral pledged by borrowers, to secure blockchain networks.

Initially, Tiiik will provide TerraUSD (UST) in the Terra blockchain.

Governed by smart contracts, DeFi lending systems rely on a principle of overcollateralisation: if the collateral (various cryptocurrencies) pledged to receive a loan falls below a predetermined level, a computer program will sell it to repay the lender with principal and interest.

Regulators are struggling to keep up with rapid developments as decentralized technologies invade the financial services industry.

Tiiik wants to operate within Australian regulations. He has applied to the Australian Securities and Investments Commission for an Australian Financial Services Wholesale License (AFSL), which he needs before joining a waiting list of 30,000 retail investors.

Tiiik will connect directly to bank accounts, allowing users to easily transfer Australian dollars to the high-yield savings product. It plans to add expense and payment functionality.

“We want to build a Web3 digital wallet, powered by stablecoins. This is a new innovation,” said Tiiik Founder and CEO Erez Rachamim.

“Our clients want a certain return and are willing to take that risk to get it.”

Pending the ASIC, Tiiik operates as an authorized representative of Boutique Capital and onboards approximately 300 sophisticated investors to the platform over the next few months.

Among the prominent investors in his round are Zip co-founder and AFR Rich Lister Larry Diamond; and Alvin Singh and Bosco Tan, co-founders of personal financial management app Pocketbook, which was acquired by Zip.

Zip connections extend beyond investors; another founder of Tiiik is Bernardo Bilotta, who led Zip’s global expansion as senior product manager. Mr Rachamim, who previously launched crowdfunding platform Equitise, said the team was building a global product from Australia.

Other investors include DACM, Global Founders Capital (part of Rocket Internet) and US venture capital investors FinTech Collective and Jump Capital. Plans are underway for a Series A round.

Currently, access to DeFi protocols such as Maker, Aave or Compound based on Ethereum is complex. Users must configure gateway software such as the MetaMask wallet and protect private cryptographic keys. Simple mistakes can lead to big losses; centralized institutions are not there to reset passwords.

Tiiik will provide investors with easy access to complex DeFi protocols. Customers will only need to interface with their fiat currency. In Australia, there will be direct connections to bank accounts through the real-time payment system.

“We obfuscate a nine-step process to make it accessible. We eat the volatility for the client and all the fees,” Rachamim said.

The founders, which also includes Daniel Li, have been developing the idea for 12 months. He received high-level legal advice and hired former Westpac private banking head Tim Smith as “head of growth”.

Regulators are monitoring the space, which was under the spotlight of the U.S. Securities and Exchange Commission this week when it ordered BlockFi to pay a $100 million fine for operating outside U.S. laws. on securities.

Mr. Rachamim hopes to avoid similar problems in Australia, where the federal government has agreed to implement a crypto regulatory regime to protect investors while encouraging DeFi blockchain developers to come to Australia to create new models of cryptocurrency. global financial services.

“We have adapted to Australian regulations, so people have confidence,” he said. “We gave in to a high level of regulation. The regulations are there for a reason. If we go into retail, we will ensure there is integrity.

Tiiik’s revenue model charges customers a withdrawal fee of 50 bps when bringing their crypto back to Australian dollars. He also makes money through a net interest margin concept similar to banks, which he calls a “maintenance fee.” Setting a payout rate at 10% will allow Tiiik to generate revenue if the protocols it invests in pay more.

Anchor on Terra

At least initially, Tiiik will invest user funds in Anchor, a decentralized savings and lending protocol that runs on the Terra blockchain. He plans to diversify into other protocols over time using a strategy known as “yield farming,” where crypto assets are leveraged to generate the highest possible returns.

Anchor offers a stable annual percentage rate of 19.5%, much higher than other DeFi savings protocols such as Aave or Compound, which pay less than 10%.

The higher level of return is possible because, in addition to interest charged to borrowers, it also pays out rewards from borrower collateral, which is used to validate the network under a “consensus mechanism” called “proof participation”. Anchor requires its borrowers to pledge a yield-generating token as collateral for the loan.

Proof of equity returns works the opposite of loan returns. As markets fall, evidence of stake returns increases to prompt network validators to check the network in volatile markets. In the loan market, Anchor’s interest rate drops when capital is available, to encourage people to borrow. When capital is scarce, interest rates are programmed to rise to encourage loan repayment and additional savings.

The model creates several new risks. The first is that the smart contracts governing savings and lending protocols are not working as intended. This could prevent lenders from being repaid as the value of the borrower’s collateral declines. Another is that the UST stablecoin is losing its peg to the US dollar. There is also counterparty risk and regulatory risk.

There is also debate about the sustainability of Anchor’s yield, particularly if more savers flock to the yield and borrowing demand declines.

The Anchor Protocol was highlighted in January after cryptocurrency market prices plummeted in December, reducing demand for DeFi borrowing, which can be used to exchange crypto for real money. This forced its operator, Terraform Labs, to top up the liquidity pool this month.

But believers in UST say that because it is a decentralized stablecoin, which runs purely on algorithms, it could become more popular if regulators crack down on centralized stablecoins such as USDC, operated by Circle, which plans to list on the US public markets.

Similar start-ups are joining the race to provide investors with access to smart contract loans. Another is Block Earner, which also recently raised seed capital.

“We have begun beta testing with a select group of early waitlist customers and are now in the final stages of improving our pre-launch user experience,” Block Earner says on its website.

Tiiik is an example of a trend sometimes referred to as a “crypto mule”: traditional fintech on the front-end and DeFi on the back-end.

“When you look at DeFi and crypto, there are a lot of advancements on the technology side, but the user experience is very poor,” says co-founder Bernardo Bilotta.

“We thought it would be cool to be able to take the traditional user experience that people are familiar with in fintech apps and merge something very complicated like DeFi to deliver DeFi in an understandable way and simplify a complex thing.

“If people are talking about bringing technology to the masses, we need to think about how you lower the barriers of entry for people to use technology.”

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Best credit cards for bad credit: February 2022 https://innovativewords.com/best-credit-cards-for-bad-credit-february-2022/ Fri, 11 Feb 2022 22:00:00 +0000 https://innovativewords.com/best-credit-cards-for-bad-credit-february-2022/ CNN Underscored reviews financial products such as credit cards and bank accounts based on their overall value. We may receive a commission through the LendingTree Affiliate Network if you apply and are approved for a card, but our reporting is always independent and objective. If you have a low credit score, you might be surprised […]]]>

CNN Underscored reviews financial products such as credit cards and bank accounts based on their overall value. We may receive a commission through the LendingTree Affiliate Network if you apply and are approved for a card, but our reporting is always independent and objective.

If you have a low credit score, you might be surprised to learn that getting a new credit card could actually help. If you can get a new card approved despite having bad credit, you’ll have the opportunity to develop better credit habits and better creditworthiness through responsible use. Plus, adding a new card can improve your credit utilization ratio and credit score if you’re already in debt.

Unfortunately, credit card options for people with bad credit tend to have few benefits. For example, you usually won’t get a welcome bonus with these types of cards, and they usually charge fees, such as annual fees and foreign transaction fees. Credit cards for bad credit can also come with high interest rates, which can make maintaining a balance expensive.

But with all that said, it’s important to understand that some credit cards for bad credit are considerably better than others. So let’s take a look at the types of credit cards you might qualify for with poor credit, and how you can use them to your advantage.

Click here to see the latest list of the best credit cards for people with bad credit.

If you have bad credit, you are probably already aware of it. After all, a bad credit score usually means that you’ve been denied a credit card or other loan in the past because a lender felt you posed too much of a financial risk. You probably also know the reason why you have bad credit to begin with, whether it’s because you let a loan or credit card go into default, you have an account in collection, or you go bankrupt. case.

But even if that’s the case, it never hurts to check your credit score so you know exactly where you stand. Fortunately, there are several ways to check your credit score for free.

You can start by signing up for a credit monitoring service that provides a free credit score or a program that offers free credit monitoring tools. For example, Experian Boost gives consumers a free snapshot of their FICO credit score, and it can even help you improve your score quickly.

When working on your credit score, you’ll probably want to pay the most attention to your FICO credit score because it’s the most commonly used scoring model. FICO credit scores range from 300 to 850 and are broken down into the following levels:

  • Excellent: 800 and above
  • Very good: 740 to 799
  • Good: 670 to 739
  • Fair: 580 to 669
  • Poor: 579 and below

While truly “bad” credit is a FICO score of 580 or lower, “fair” credit between 580 and 669 is still below average compared to other US consumers. If your credit score falls into one of these categories, you need to take steps to improve it as soon as possible.

See if you qualify for one of these credit cards for people with fair credit.

If you have poor credit, you can qualify for two types of credit cards: secured credit cards and unsecured credit cards.

Secured credit cards are usually the easiest to get if you have bad credit. However, secured credit cards require a cash deposit to get started. This means that you may need to deposit $200, $500 or more as collateral, and you will usually get a low credit limit at or near your deposit.

The biggest advantage of secured credit cards is that they are usually reported to major credit bureaus. This means that all of your one-time payments are added to your credit report, which can help you increase your credit over time. And even though you need to put down a cash deposit to open a secured card, if you later close the account or upgrade in good standing and with a $0 balance, your deposit will be refunded.

Save money with these best credit card offers for people with bad credit.

In addition to secured credit cards, you may also qualify for an unsecured credit card with bad credit. These cards tend to come with fees, low credit limits, and few benefits, but they can still help you build credit.

Store credit cards are also a type of unsecured credit card that may be easier for people with bad credit to approve because they can usually only be used at the store or chain that issues the card.

Besides being easier to get, the biggest advantage of store credit cards is that if you find yourself shopping at a particular retailer often, you may be able to save money, whether on your initial purchase or later on a future shopping spree. Typically, using a store credit card saves you 5% on your purchase, and store credit cards can also have other benefits that you might not have thought of. .

Before you get a new credit card, you need to make sure you have a clear understanding of what you hope to accomplish. Although obtaining a credit card gives you the opportunity to improve your credit, you could worsen your credit if you are not prepared to take on this responsibility. So before you apply, ask yourself these questions:

  • Do I plan to carry over a balance? If you want a credit card so you can carry over a balance, be aware that credit cards for bad credit come with high interest rates. Not only that, but secured credit cards require you to deposit money as collateral, so they’re not a good option if you need a loan.
  • Am I interested in the rewards? Some credit cards for people with bad credit offer the opportunity to earn rewards on your spending. Although rewards can be lucrative, keep in mind that they often entice people to spend more than they intended.
  • Do I want to pay an annual fee? Not all credit cards for people with bad credit charge an annual fee, but some do. If you decide to pay an annual fee, you need to make sure that any benefits you get in exchange are worth it.
  • Am I ready to take my credit seriously? A new credit card gives you the opportunity to improve your credit, but it won’t happen automatically. In most cases, getting a new credit card will only help your situation if you keep your balance low and always pay your bill on time.

The best credit cards for bad credit may not sound very appealing, but the point is to use them to boost your credit score so you can qualify for better deals later. But there are a few “gotchas” to be aware of and watch out for, including:

  • Costs: While you should try to avoid annual fees if you can, you should also be aware that some credit cards, especially those for people with bad credit, try to charge an account set-up fee or program fees. Avoid these offers as much as possible.
  • High APRs: Beware of high interest rates which can make debt incredibly expensive. In fact, if you’re considering using a credit card to improve your credit, you should try to avoid carrying a balance on the new card entirely.
  • Credit errors: Finally, watch out for mistakes that hurt your credit in the first place. The worst thing you can do is pay your credit card bill late, as this will have a major negative effect on your credit score, so avoid it at all costs.

Compare credit card offers available to people with fair credit.

If your goal is to get a new credit card to help rebuild your credit, you need to know and understand how your credit score is determined in the first place. Let’s take a closer look at the five factors that make up your FICO credit score:

  • Payment history: 35%
  • Amounts due: 30%
  • Length of credit history: 15%
  • New credit: 10%
  • Credit mix: 10%

By looking at these factors, it’s easy to see what your next steps should be. More importantly, you should strive to pay your credit card bill — and all your other bills — on time each month. Also, you should keep your debt to a minimum, because the amount you owe against your credit limits is 30% of your FICO score, also known as your “credit utilization rate.”

Since any credit card you get with bad credit will likely have a low credit limit to start with, you’ll need to be extra careful not to go over your credit limit and pay off your balance as much as possible each month to keep your credit utilization rate is low.

The length of your credit history can also be increased if you keep old credit accounts open and in good standing, and you can keep your score high in the “new credit” category by refraining from opening too many new accounts.

Your credit mix is ​​a final category to keep in mind, but you might not have too many different types of credit — such as installment loans like a mortgage or car loan — when your credit score credit is fair or bad. Once you’ve improved your credit score, you can worry more about diversifying your credit with installment loans, revolving accounts, and other types of credit.

Ultimately, if you’re going to get a new credit card in an effort to improve your bad credit, you need to make sure that you don’t make the same mistakes that got you into trouble in the first place. So if you decide to apply for a new credit card, be smart about how you use it. Don’t overspend, don’t pay bills late, and avoid cards that charge high fees so you can get back on the path to good credit.

Learn more and apply now for the best credit cards you can get with bad credit.

Is your credit rating good or excellent? Or maybe you have no credit? CNN underlined has you covered with our other stories in this series:

Check out CNN Underscored’s list of best credit cards available now.

Get all the latest personal finance deals, news and advice from CNN Underscored Money.

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Do online “neobanks” protect our money like ordinary French banks? https://innovativewords.com/do-online-neobanks-protect-our-money-like-ordinary-french-banks/ Thu, 03 Feb 2022 17:21:41 +0000 https://innovativewords.com/do-online-neobanks-protect-our-money-like-ordinary-french-banks/ Reader’s question: Are funds deposited in “neobanks” the same protection mechanisms as funds deposited in ordinary French bank accounts? Neobanks, or internet-only banks, are financial services companies that operate exclusively online and do not have physical branches. Although these companies, including Nickel, Aumax and Qonto, cannot necessarily be called “banks” in the traditional sense, customers’ […]]]>

Reader’s question: Are funds deposited in “neobanks” the same protection mechanisms as funds deposited in ordinary French bank accounts?

Neobanks, or internet-only banks, are financial services companies that operate exclusively online and do not have physical branches.

Although these companies, including Nickel, Aumax and Qonto, cannot necessarily be called “banks” in the traditional sense, customers’ money is normally always protected.

The French Prudential Control and Resolution Authority (ACPR) rejects the term “neobank” because it suggests that these companies are banking establishments (credit institutions) approved by it or another equivalent authority.

“It was the historic status of banks,” said Geoffroy Goffinet, head of authorizations at the ACPR, to Le Monde. “The authorization process conducted by the ACPR takes time – at least 12 months – and is demanding.”

Since these financial services are not subject to the same controls as traditional banks, it can often be much faster to open an account and transfer money.

How are customers protected by neobanks?

Some neobanks, such as Younited and Memo Bank, have obtained ACPR approval and their clients’ funds are protected by deposit insurance from the Deposit Guarantee and Resolution Fund (FGDR), which covers traditional banks. .

This means that if the bank fails, each of its depositors will be covered up to €100,000.

Payment and electronic money institutions

Other companies are incorporated under the name of payment or electronic money institutions, so they do not benefit from the protection of the FGDR, other measures exist to cover depositors’ money.

These payment services do not normally hold all of the money that their customers deposit themselves, but keep it in a deposit account with a traditional bank, which means that in the event of a business default , the funds in the physical bank account would be protected by the FGDR.

Agents and distributors

However, other companies such as Lydia, Pixpay and Kard are not payment service establishments but merely “agents” or “distributors” of payment service establishments.

These are not covered by the FGDR but “the payment service on which they depend will be and will carry out all the necessary checks”, specified Yves Eonnet, the president of the financial services technology company Skaleet.

The ACPR therefore encourages customers to check which payment service or electronic money company an agent is attached to via the Regafi register of the Banque de France before opening an account.

“If it is an agent, the register will allow you to make sure that it is indeed attached to a payment services company. However, this is not possible for distributors [such as Kard or Pixpay]which are not declared to the ACPR by electronic money institutions,” said Mr. Goffinet.

Cyril Chiche, the co-founder of Lydia, who is an agent, told Le Monde that: “We are constantly monitored by our partner electronic money institution, SFPMEI.”

“Our status ensures good security for the client because we work with quality partners in all our activities. But this multiplication becomes financially punitive. So we started the process to become a payment services institution.

“Fintechs need to get started quickly to test their model and control their costs. Their status as an agent or payment service provider directly addresses these concerns,” said Alain Clot, President of France Fintech.

“And it is possible to evolve later if necessary.”

“The granting of the title of credit institution is not a guarantee of security for the customer because the regulations will protect him in all cases”, declared Geoffroy Guigou, the general manager of Younited Credit. “But it’s a marker of success for fintech.”

What about other popular services like Revolut, Monzo, and Transferwise?

Revolut is a British company that uses an easy-to-use phone app where customers can manage their finances.

Although it has applied for a UK banking license, it is not yet protected by the UK’s Financial Services Compensation Scheme (FSCS). However, it holds customers’ money in a traditional “closed” bank account, which means it is covered in the same way as the payment services and e-money institutions detailed above.

In the EU, Revolut has a banking license in Lithuania and therefore the funds are protected by the Bank of Lithuania.

TransferWise is also a UK company that makes it easier for customers to manage their money wherever they are in the world.

It is fully authorized by the Financial Conduct Authority in the UK and the National Bank of Belgium in the EU, and so customers’ money is protected.

Monzo is a regulated bank and therefore depositors’ funds are covered by the FSCS.

Read more: Brexit and the British in France: consider a neobank account

German internet bank taken to court over confiscation of funds

German neobank N26 [with many clients in France] is being sued by former clients who accuse him of abruptly closing their accounts and confiscating their money.

“We have never seen a bank block money in such a totally random and unjustified way, money that belongs to people who need it for their daily life,” said Emma Léoty, the lawyer for Choose and Associates in charge of the file.

The ACPR also asked for explanations from N26, which specifies that the accounts are closed in the event of suspicion of fraud or money laundering, and that only 3% of the customers concerned have not yet recovered their money.

The case will be heard on April 12 in Nanterre.

Related Articles

Bank accounts, gifts: Eight tips to avoid a French tax audit

Can I pay a UK check to my French bank account?

Tabacs in France can now have ATMs in latest service addition

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Neobanks say they are insensitive to the overdraft movements of the old guard https://innovativewords.com/neobanks-say-they-are-insensitive-to-the-overdraft-movements-of-the-old-guard/ Thu, 13 Jan 2022 19:34:00 +0000 https://innovativewords.com/neobanks-say-they-are-insensitive-to-the-overdraft-movements-of-the-old-guard/ Challenger banks have long marketed themselves as being more consumer-friendly than traditional banks because they don’t charge overdraft fees, but can they still make that claim now that more and more banks are lowering or reducing costs ? These companies usually bundle services for low or no fees that only a few traditional banks offer, […]]]>

Challenger banks have long marketed themselves as being more consumer-friendly than traditional banks because they don’t charge overdraft fees, but can they still make that claim now that more and more banks are lowering or reducing costs ?

These companies usually bundle services for low or no fees that only a few traditional banks offer, such as credit building, early access to paychecks and protection against identity theft.

Neobanks also claim that their overdraft programs remain more user-friendly. Some, like Current and Chime, allow user accounts to go negative up to a certain amount without charging a fee. Others, like Brigit, Dave and FloatMe, push cash advances on users’ external accounts to cover a shortfall for an optional tip or monthly subscription that bundles into other services.

“We wanted to make sure our members had a sense of [overdraft program SpotMe] to be there for them when they needed it most,” said Aaron Plante, vice president of lending products and banking strategy at Chime (left). Kyle Beilman, CFO of banking app Dave (right), explains that one of Dave’s differentiators is that users don’t need to deposit directly with Dave to use his overdraft protection.

Banks are gradually catch up. Bank of America recently reduced its fees from $35 to $10. Capital one and Allied Financial abolished these penalties entirely. Other banks, such as PNC Financial Services Group and Citizens Financial Group, have added mechanisms to help customers avoid accidental overruns.

While fintechs may need to evolve their overdraft products over time to keep pace, some, like Brigit, Chime and Dave, still say their offerings are competitive. They highlight their transparency, the strengths of all of their user-friendly offerings combined, or their ability to prevent a user’s external main account from going negative in the first place.

Bank customers generally receive higher limits on a wider variety of transaction types if they are overdrawn, compared to fintechs. Yet the perception of many consumers is that bank overdraft policies are punitive or misleading while neobank policies are supportive, said Alex Johnson, director of fintech research at Cornerstone Advisors.

“Fintechs have done a good job of positioning banks on the wrong side of the problem,” he said. “Even though the actual product and cost are not that drastically different, the perception in the market is that banks are ripping off consumers with these fees and neobanks are trying to fix it.”

SpotMe is a free Chime service launched in 2018 that supports this message. It allows customers who receive direct deposits of $200 or more per month to withdraw up to $200 from their accounts. Chime will apply all incoming deposits to the negative balance, so the SpotMe allocation is constantly replenishing. Customers can leave a tip, which Chime says is optional and will not affect their SpotMe service.

“We wanted to make sure our members had a sense of [SpotMe] to be there for them when they needed it most,” said Aaron Plante, vice president of lending products and banking strategy at Chime.

As a bonus, Chime is also giving each eligible SpotMe customer four free “Boosts” each month, worth $5 each, which they can send to other Chime customers to “increase” their SpotMe limits. On social media, people will even offer a “nudge for a nudge” or trade their $5 nudge with someone else, Plante said.

Plante says SpotMe is one of the main reasons people are drawn to Chime. “We will continue to innovate on the product,” he said. “As the alternatives become less punitive and more appealing, it might make our job a bit more difficult, but overall we see this as a very good thing for the consumer.” Plante points out that Chime differentiates itself with a suite of services that help customers manage their financial lives, including its credit builder card and access to advance paycheck.

Dave, a banking application provider whose parent company recently went public, took a different approach with its overdraft capabilities.

Dave will allow users to connect to their external bank accounts through Plaid and then analyze transaction data to alert them to any gaps in those current accounts. Users can request an advance of up to $250 for Dave to transfer to this account and avoid an overdraft. They are encouraged to leave an optional tip.

“One of our biggest differentiators is that you don’t need to have direct deposit or a bank account with Dave to help you with your overdraft situation,” said Kyle Beilman, Dave’s chief financial officer. He said the company generally approves 85% to 90% of people who want cash advances for external accounts, and anecdotally, people tend to access cash advances a few times a year. Users cannot request a new cash advance if they have a balance.

Beilman says users find Dave’s approach to overdraft protection empowering. “A lot of times people don’t like to zero or negative their account to access credit,” he said.

The Brigit banking app takes a similar approach. In its free version, users have tools for budgeting and financial information, including overdraft prediction on external accounts. Under its paid Brigit Plus plan, users can access the Instant Cash feature to request transfers of up to $250 or opt for automatic advances to a linked account if Brigit anticipates an imminent overdraft.

Asked about the value of customers paying $9.99 a month to access cash advances, the company points to other benefits of that price, including credit monitoring, identity theft protection, and building loan, while overdraft fees usually average more than $30 and may occur. several times.

One of the advantages of the services offered by fintechs over banks is that they communicate the idea that they want to help customers with cash when they need it, but their overdraft prevention measures are not intended for habitual or accidental use, said Johnson of Cornerstone. .

“Historically, the big problem with banking products is that they facilitate or in some cases even encourage accidental overdrafts, whereas I think fintechs design their products to be used more intentionally,” Johnson said. “The value proposition offered by fintechs is that we won’t charge you a $35 fee every time you make a mistake.”

At the same time, as banks phase out overdraft fees, they can offer the most attractive proposition overall, Johnson points out. Challenger banks typically limit overdrafts to a few hundred dollars and only work for certain transactions, such as debit card withdrawals.

Ally Financial and Capital One have eliminated these fees entirely or plan to do so. Ally Financial proactively waived overdraft fees during the pandemic and said there was no change in customer behavior or usage. A Capital One spokesperson said the bank’s decision was the culmination of many years of movement toward a no-fee model, including the removal of the insufficient funds fee in August.

“Fintechs will have to figure out how to offer a competitive product,” Johnson said. “Chime and Current don’t have the same depth or multi-product customer relationships as PNC or Capital One. We’ll see fintechs trying to broaden the overall scope of their relationship with customers and being a true primary banking provider so that their business model gives them the ability to increase those overdraft limits or get rid of fees. subscription or stop asking for tips.

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