21–30 of 258 posts
Big tech wants access to financial services for a few reasons laid out in the article in addition to FOMO and bypassing regulation.
Is the overwhelming debit spending vs credit spending an emotionally charged and risk averse rationale decision by the general populace or just unfortunate financial illiteracy?
When you're a bank you get rent from many economic transactions without providing anything of value except being rich to start. And even better, if you're a real bank, then you can create money out of thin air as debt on your balance sheet via fractional reserve banking. There's effectively a universal basic income for banks. What company wouldn't want to get in on that?
This article seems to just be an advertisement for the authors new bank account?
its not an advertisement my friend. Just explaining how I see the world as someone who is working in it. Tried to be as unobtrusive as possible!
I think, by focusing on the $5000 emergency cash proposition, your customer segment will generate more costs and hassles than their debit card fees and whatever interest spread you eek out in today's world. You'need a way for your customers to generate more value-- what have you thought of? Ads?
Earlier quoted context omitted.
Another reason is the horrible interest rates. Wealthfront and Robinhood are offering "bank" accounts that have 1.8% APY that is FDIC insured. If your business has a high turnover month-to-month, that money used to pay your bills can accumulate interest.
I bank with a shitty national bank (long story, need access to Zelle/P2P transfers). My emergency fund is 6 months expenses, low 5 figures. 150-200 basis points of interest annually is trivial when 1 or 2 wire fees ($20) to get access to those funds same day blows away all of interest gains over 6-12 months. If interest rate mattered to folks, more would move to providers offering higher rates (you see this sprouting…
Earlier quoted context omitted.
I bank with a shitty national bank (long story, need access to Zelle/P2P transfers). My emergency fund is 6 months expenses, low 5 figures. 150-200 basis points of interest annually is trivial when 1 or 2 wire fees ($20) to get access to those funds same day blows away all of interest gains over 6-12 months. If interest rate mattered to folks, more would move to providers offering higher rates (you see this sprouting…
If you have 6 months expenses saved, you don't need same day access. You keep 1 month in an immediate access account and 5 in the high yield savings account.