There’s a catch 22 problem here I think. As least for me, a large part of the reason I’m not willing to commit to any of these banks as a primary account is precisely because they are unprofitable. Most people know what happened to banks when they ran out of money to fund their losses in 2008/9 and how that worked out for their customers (took months for people to get their money back). It’s not like eg Uber where I…
Does the UK or EU not have deposit insurance? In the US, as long as the FDIC insures it I wouldn‘t blink an eye. (They cover $250K at a single institution.)
(It‘s also why Robinhood in the US initially got in trouble for its checking & savings account, because as an investment broker it is not subject to the FDIC but the SIPC, which does not have the same exact guarantees.)
Are there any challenger banks with an API? I'm not entirely sure what I'd do with one but it seems like a neat idea.
In the UK, Monzo has a personal API, and Open Banking (PSD2) APIs: https://docs.monzo.com/ Unfortunately, I think you need to be licensed under the PSD2 even to send money from your own account - you can do things like attaching receipts to transactions to view in the app, or pulling transaction data in real time, though.
Yea, I have been following Monzo for some time. My understanding is that they originally had big plans for their API, but pulled back on development of it as they got more popular. It looks like it still has a lot of restrictions.
Are there any challenger banks with an API? I'm not entirely sure what I'd do with one but it seems like a neat idea.
Yes, bunq. They are absolutely wonderful and the API is so good there's a whole community of apps out there including a Linux desktop app. But they cost 9 eur a month, they don't have a serious free tier. Still, I use them because I think their offering is worth what I pay for it.
Very cool, thanks. Do you know if they operate in the United States?
Are there any challenger banks with an API? I'm not entirely sure what I'd do with one but it seems like a neat idea.
The EU’s PSD2 (second Payment Services Directive) specifically introduces the concept of Third Party Providers (TPPs) that are allowed to interact with your bank account on your behalf either to collect/aggregate information or to initiate payments. These of course require an API to do so, but unfortunately, within the same piece of legislation, the TLA ‘API’ unfortunately suffers a namespace collision with “Authoris…
> I’m currently heading a project to set up such an institution so I’m into this stuff up to my neck
There’s a catch 22 problem here I think. As least for me, a large part of the reason I’m not willing to commit to any of these banks as a primary account is precisely because they are unprofitable. Most people know what happened to banks when they ran out of money to fund their losses in 2008/9 and how that worked out for their customers (took months for people to get their money back). It’s not like eg Uber where I…
Does the UK or EU not have deposit insurance? In the US, as long as the FDIC insures it I wouldn‘t blink an eye. (They cover $250K at a single institution.) (It‘s also why Robinhood in the US initially got in trouble for its checking & savings account, because as an investment broker it is not subject to the FDIC but the SIPC, which does not have the same exact guarantees.)
It does but (i) I’m not sure how many people actually trust it, (ii) it’s limited to GBP100k per customer per institution I think, assuming they are UK regulated banks, so they may struggle to get big deposits and (iii) the time and administrative hassle of getting your money back may be a problem. The experience during the crisis was that it took months for some people to regain access to their money in some instances, even though it was covered by one scheme or another. That is supposed to have been improved upon since, but it hasn’t been tested with a large scale bank failure and it’s not clear if a mass migration of accounts could even be done seamlessly. Eg see the catastrophe of TSB trying to change their own backend in an operation which had been planned for years. In the mean time, people might miss mortgage and other critical payments for example, and for most people I suspect it just isn’t worth the risk. I certainly wouldn’t risk it with my own money.