Hi 5! The top five fintech stories we’re following today

top 5 weekly fintech stories

ATMs as the distributed bank of the future

A recent study showed that for the first time, there were more ATMs located away from bank branches than located onsite. That’s an interesting outtake as banks shrink their physical branch footprints.

The nature of the ATM-as-banking-node is changing, too. In 2001, Gene Pranger was hard at work on uGenius, a pioneer of the Interactive Teller Machine. Now, with BankOn, he’s on to something arguably even bigger: mobile video banking.


Anyone interested in seeing Facebook’s intentions when it comes to finance should take a look at the social network’s new European payment license. That’s in addition to the firm’s recent hire of David Marcus, PayPal’s former president, to run Facebook Messenger.

Facilitating global payments is a large opportunity that gets even bigger if you can figure it out for B2B payments. Payoneer recently acquired escrow-as-a-service firm, Armor Payments, and is serious about bridging the trust gap in global B2B payments.

What’s going on with demand for banking apps?

Mobile apps are growing, even if that growth is slowing down. Historical numbers of people are using mobile banking apps. The growth has been led by a younger demographic, which makes sense. Getting the rest of banking customers to use their phones for banking service is the next challenge. There’s still a lot of opportunity for banks to migrate older customers to other channels.

Finance bots

I wish I had an on-demand financial planner running my financial life. Now available on Facebook Messenger, Digit bot has helped people save $250 million.

Facebook has been encouraging financial institutions to use its messaging app as a bot platform. B2B communication platform Slack is also competing to become a financial bot platform and is actively investing in a variety of finance bots, including in startup Sway Finance.

Blockchain hype

Blockchain hype still outstrips real world activity. To see what’s going on in the real world, Tradestreaming spoke to a blockchain expert at SAP.

Can blockchain make life better for the world’s poorest people? On the business side, DTCC, Wall Street’s clearinghouse, thinks it can help and wants to adopt blockchain technology.

For its sake, Bitcoin may never be a currency. It’s something way weirder.

Top 10 fintech startups vying to be your next bank

top 10 banking apps

It’s very likely that the bank of the future is light on branches and heavy on technology. There are a variety of these new banking apps floating around. Only a few are traditional banks in the sense that they take insured deposits and operate with a banking license. Instead, they provide easy-to-use technology that people can use to access various banking functions directly via their smartphones, tablets, and laptops.

For the purpose of this list, we’ve included only standalone startups. A few of the early online banking movers, like Moven, Holvi, and Simple, have been acquired by more traditional banks and we didn’t list them. That’s not to say they’re not worth paying attention to — they definitely are. They just weren’t considered startups for the sake of this list.

Top 10 banking apps

1. Acorns
Getting underinvested people to save more isn’t a trivial feat. That’s because, as humans, we aren’t really wired to save for our future; We’re preprogrammed to ensure we’re well fed and satiated today. New banking apps like Acorns address our biology and make it really easy to round up our coffee bills, sending the remainder into an investment account.

You can preprogram the Acorns app to automatically sweep spare change from a mobile purchase into an Acorn account or do it manually by swiping a few cents at a time through the app.

The California company was founded in by the father and son duo, Jeff and Walter Cruttenden. Acorns has done a good job convincing investors of its app-centric banking model, raising over $60 million.

2. Atom Bank
The UK has proven to be a fine breeding ground for many of today’s top banking apps and Atom Bank is a good example of the work being done there. Upstart UK banks are called challenger banks, and Atom Bank was one of the first of its kind to launch a product into the market. It did so by first getting a banking license, so, while its initial app launched with just a savings account, the firm will eventually roll out full banking functionality, including current accounts, overdraft, debit/credit cards, and mortgages.

Spain’s BBVA, which also owns Simple, led a 2015 funding round that totaled $128 million. Atom Bank has an executive roster that’s primed to disrupt traditional banking services: Founder Anthony Thomson was the co-founder of Metro Bank, a low cost financial services firm in the UK and CEO Mark Mullen previously headed HSBC’s telephone/online-only bank, first direct.

3. Card.com

sesame street card.com
Banks with large physical branch networks at a cost disadvantage in a business that’s becoming increasingly digital. Card.com founder Ben Katz certainly believes that to be the case and that’s why he’s built a platform that provides banking-like services with just a website and debit cards. Customers can pimp out their credit cards with their favorite music artists or sports teams with literally thousands of cool designs to choose from. Then, Card.com customers use technology to load up their cards with cash or transfer it to family and friends.

Card.com has a good list of investors including fintech powerhouse, QED Investors. Founder Katz has payments industry experience from Green Dot and PayNearMe and carries a Sesame Street Design Prepaid MasterCard in his wallet.

4. Chime
Chime is another new banking app that leads with a debit card experience. The banking app appeals to millennials in an effort to help them save and budget regularly. Chime focuses a lot on automation — if a user chooses to use the firm’s automatic savings functionality, each Chime card purchase is rounded up to the nearest dollar. Those funds are added to a savings account which the company sweetens by paying users an additional 10% bonus on the money they save.

The company raised over $20 million and has been working on its banking app since 2012. One in three millennials are open to switching banks in the next 90 days, according to The Millennial Disruption Index, a three-year study commissioned by Viacom Media Networks. Who knows, they may be headed on over to Chime.

5. Coin

Coin credit card
Some of today’s top startup banking apps are trying to replace or compete with credit cards. Others, like Coin, were designed to make existing solutions better. Coin bills itself as a payment device: it loads up all your credit cards onto a single Coin card. So leave all your other credit cards at home and when it comes time to make a purchase, just choose which card you’d like to use by pressing a button on Coin. The technology combines credit, debit and gift cards into one card that can be used for magnetic stripe and NFC tap-to-pay purchases.

The firm claims over a quarter million Coins have shipped.

Based in San Francisco, Coin’s raised $15.5 million from Redpoint, Sherpa Capital, and Spark. It recently sold off its wearable payments assets to Fitbit in a transaction in May 2016.

6. Digit
Like Chime, the key to Digit’s appeal is its simplicity in moving money between spending and savings accounts. Because, as a species, we’re flawed when it comes to savings, Digit helps users save without thinking about it. Sure, setting automation rules for savings is hard and to counter that, Digit proactively scans user spending habits, finding limited opportunities to sweep some spare cash as it builds up. Once Digit finds an opportunity to save, the banking app asks for an approval from a user to move money into savings. As micro-savings build up, users can have the app transfer money back to a checking account, as well.

Digit was founded by Ethan Bloch and Michael Murray, and raised nearly $14 million so far for its buildout and marketing. The company sports some major angels as investors, including Alexis Ohanian and Eric Ries.

7. Final
Final is another credit card-first technology for people who want more control over their payment relationships. The app provides a disposable one-time use number that users can issue to the merchants they do business with. Instead of jumping through hassle hoops of despair when trying to cancel a service or dispute a charge, users can simply deactivate that card number and move on with their financial lives.

Compared to some of the other top startup banking apps on this list, Final hasn’t raised boatloads of money (yet) but if its any indicator, its early rounds have some heavy hitters participating, including DRW, KPCB Edge, Ludlow, and Y Combinator.

8. Number 26
This European fintech startup is backed by Paypal founder turned uber venture capitalist, Peter Thiel. Founded in Berlin in 2013, Number 26 allows a user to open a bank account using video-identification in just 8 minutes. Once open, users can transfer money, make ATM withdrawals, and track their spending with personal finance statistics and analytics. A fresh partnership with Transferwise will give Number 26 account holders in-app access to cheap international money-transfer service.

The company has raised almost $13 million worth of venture capital, which includes Thiel but also Axel Springer, Earlybird, and Redalpine.

9. Prism

Prism Money
It’s a pain to have different apps managing different parts of personal finance. Prism brings together money, bills, and payments into one interface. The app connects with billers and notifies users when it finds a new bill that needs to be paid. The Microsoft Ventures-backed app has raised $3.5 million in investment since 2012. The firm’s two cofounders bring together the fin and tech for their fintech startup — one is ex-Microsoft while the other is ex-JPMorgan.

Where other apps have focused on creating a better savings experience, Prism definitely appears to be honing in on bill payments as core to its app. The technology works on pretty much all mobile devices including iOS, Android, Windows, and Kindle.

10. Qapital
Qapital takes a goals-based approach for its banking app. It’s hard to save, and some people just find it easier to save for specific ends in mind (like vacations or college tuition). Users can create these goals, associate monetary objectives with them, and create automated triggers to sweep cash towards them. Behavioral economics has shown that creating accountability for one’s savings actions makes us more likely to hit our goals and Qapital makes it easy to share our goals and the progress towards them with family, friends, and teammates.

Qapital offers FDIC insured deposits on the money saved within its mobile platform. The firm has raised nearly $7 million from a series of seed and venture investors, and has offices in Stockholm and Manhattan.

Photo credit: pkdon50 via Visualhunt.com / CC BY

How Qapital uses IFTTT to integrate its savings app into hundreds of apps

sofi interview digiday podcast

If millennials aren’t saving money, Qapital wants to change that. The Sweden-based technology company has an app that makes it super easy to begin saving more. After connecting to a US bank account, Qapital enables its users to set financial goals and begin working towards meeting those goals by automating the savings process. For example, as more millennials begin their careers by taking on multiple gigs, Qapital helps these freelancers automatically set aside a percentage of their income for taxes (something freelancers find hard to do with lumpy income).

Qapital app
Qapital app

From a behavioral economics point of view, getting users to set aside money can be used as a punishment or reward for certain activities. If automation of the savings process helps overcome individual reluctance to save, Qapital sought a way to embed itself more deeply in its users’ daily lives and in the apps that they use. But integrating Qapital’s saving mechanism into individual apps like Facebook or Fitbit is an endless, thankless process. Instead, Qapital turned to IFTTT to roll out its savings capabilities into hundreds of apps.

At its core, IFTTT enables individual users to get their various apps talking to one another (some have referred to the technology as digital duct tape). To begin using this API marketplace, users sign up for IFTTT and link up their various applications. From there, individuals create what IFTTT calls recipes. Recipes all follow a particular format: if X, then Y (IFTTT actually stands for if this, then that). Here’s a basic use case: every time you take a picture with Instagram, you’d like to save that same image to your Dropbox account. IFTTT can do automate that, even if the two apps in question don’t have a direct integration.

Qapital was designed to make saving money easy and encourages users by offering various ways to save — its integration with IFTTT gives it thousands of permutations how to do that. One of the most popular recipes on IFTTT’s Qapital channel involves a trigger when it snows. The idea is that when the weather turns white, we may want to finally begin saving for a new pair of skis or a tropical vacation that’s been in the works. If a user has this recipe enabled, money will automatically get swept into a savings bucket when the white stuff starts falling from the sky in the user’s city.

Qapital and IFTTT
Qapital recipes on IFTTT

Another popular recipe for Qapital on IFTTT involves the popular UP fitness tracker made by Jawbone. Users motivated to get in shape can reward themselves when they break a sweat. This recipe swipes $3 to savings toward a spa day, a session with a personal trainer, or new shoes if a user hits his or her daily walking/running goals. Given that IFTTT has more than 200 popular apps available on its platform, Qapital users can create recipes for saving more money connected to how much they exercise, attendance at certain events (IFTTT can use your GPS location as a trigger, so better get to the gym), and how much they read.

Just a couple of years ago, to get this level of interconnectivity, app developers would have to code for each individual integration into 3rd party apps. That means specific integrations would have to be coded within a greater development cycle, often resulting in re-prioritizations, pushouts, and delays. With IFTTT, app developers like Qapital have to make a single integration to the IFTTT platform and IFTTT provides the connective tissue to all the other apps on its marketplace. App developers can also seed the recipe database by creating their own recipes alongside those recipes created by other IFTTT users.

In the consumer space, IFTTT is the largest and most recognized API integrator. Zapier, another platform that interconnects apps, has emerged as a leader for apps targeting business users (think connecting a lead generation form directly to a CRM). Plaid is working in the financial space to create its own APIs for bank data to give tools to developers to connect with existing bank infrastructure (think a turnkey solution to access and authorize new customer bank accounts). In fact, Qapital has partnered with Plaid for its own data access pipelines to US banks.

“Introducing a new banking product is a huge hurdle in terms of trust and putting yourself out there, but millennials are just way more open to new services, and they’re not really expecting banks to pull this off for them,” Qapital founder, George Friedman told FastCompany. “Millennials trust different things. They trust design and they trust the message, which are very different factors than the older generation.”

Photo credit: CarbonNYC [in SF!] via Visual Hunt / CC BY