Upgrade launches checking accounts and debit cards

Fintech startup Upgrade has been positioning itself as a neobank. And yet, the company has mostly been focused on personal loans and more recently credit cards. You couldn’t just replace your bank account with Upgrade. Upgrade is adding two important missing pieces of the puzzle with checking accounts and debit cards.

With today’s launch, Upgrade competes more directly with other challenger banks, such as Chime, N26 and others. You can open a checking account, control it from a mobile app, send and receive money from that account.

There are no monthly fees and no minimum account balance. Under the hood, Cross River Bank provides FDIC-insured checking accounts.

You also get a debit card with your checking account. When it comes to ATM withdrawals, Upgrade will reimburse ATM fees for its most loyal customers up to five times a month. You need to maintain a minimum balance or set up direct payroll deposit for that feature.

Debit card payments on subscriptions and common everyday expenses let you earn 2% cash back. Eligible purchases include convenience stores, gas stations, restaurants, food deliveries, etc. Your earn 1% on other debit charges.

Rewards on debit card transactions are somewhat uncommon. Most financial companies focus on credit card rewards as the interchange fees on credit card transactions are much higher. Debit cards don’t generate as much interchange revenue.

“Neobanks in particular cannot pay high rewards (or any rewards at all) on debit cards because the interchange fee is often their only source of revenue,” Upgrade CEO Renaud Laplanche told me in an email.

And interchange fees can add up if you manage to attract millions of customers. According to The Information, Chime generated more than $ 600 million in revenue last year thanks to interchange fees.

The company still plans to generate the vast majority of its revenue from credit products. “Our strategy is to monetize our base through credit,” Laplanche said.

Upgrade also offers a credit card with 1.5% cash back on all purchases. If, for one reason or another, you can’t pay your monthly balance payment, the company helps you combine monthly charges into installment plans that you can pay back over 24 to 60 months. You pay down your balance at a fixed rate with equal monthly payments. Upgrade customers who use the company’s checking account will get lower rates on Upgrade loans.

You can also get a personal loan from Upgrade without a credit card or a checking account. And maybe you’ll end up discovering Upgrade’s other products after signing up to a personal loan.

Image Credits: Upgrade

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Revolut to move its Irish accounts to Lithuania due to Brexit; launches new metal cards for business customers

London-based fintech startup Revolut has announced that it will temporarily migrate its Irish users’ accounts to its business in Lithuania because its e-money license will no longer be valid as a result of Brexit.

The move is aimed to ensure that Revolut can continue to serve its non-UK customers and hedge against a no trade-deal Brexit. 

Revolut’s Irish customer accounts have until now been regulated by the UK Financial Conduct Authority under EU passporting rules. These passporting rules allow financial institutions to ‘passport’ or transfer the license to another country without having to get full regulatory approval every time. However, after Brexit, on December 31st, Britain will give up its so-called ‘passporting rights’ and the UK regulator will no longer be able to oversee the accounts of EU citizens.

Speaking on the development, a spokesperson for Revolut says, “While that process is ongoing, to ensure that Brexit does not impact our Irish customers, we will temporarily migrate their accounts to Revolut’s e-money licensed business in the EU, based in Lithuania.”

He further adds, “Our plan is that once the business in Ireland is authorised by the CBI, we will migrate our Irish Revolut customers to the Irish entity and, in due course, many of our other Western European customers.”

According to the company, it’s 1 million Irish customers will therefore be regulated by the Bank of Lithuania, which granted Revolut an e-money licence in 2018. NB customers are being transferred to the Lithuanian e-money licence, not the Lithuanian bank licence, which lies with a separate entity.

Revolut’s Irish business has hired 32 staff and continues to build up its business in Ireland.

In the interim the day-to-day functionality of Revolut will remain exactly the same as it is. Customers’ money will continue to be held securely in ring-fenced accounts in top-tier international banks.Support and services will be carried out by the same teams as currently. 

However regulatory responsibility for the account, which until now was the regulatory responsibility of the Financial Conduct Authority in the UK, will during this period be the regulatory responsibility of the Bank of Lithuania. While the terms and conditions will have to be updated to reflect this customer migration, they will remain essentially unchanged and customers will still have all the protections of EU law.

Launches metal cards

Founded in 2015 by Nikolay Storonsky and Vlad Yatsenko. Revolut is a financial services company that specialises in mobile banking, card payments, money remittance, and foreign exchange. It includes a prepaid debit card, currency exchange, and peer-to-peer payments.

One of Revolut’s key features includes conversion from one currency to another based on interbank rates with no fee. Customers can hold foreign currencies in their accounts or send money to another Revolut user or a bank account outside of their country.

Image credits: Revolut

The company, today, has launched distinctive metal cards as an exclusive benefit to Revolut Business paid company plans. Revolut Business is the business account from fintech app Revolut and has over 500,000 business customers worldwide. Revolut Business was launched in July 2017 across the UK and Europe and helps customers get more from their business account with powerful tools that provide total control over their business’ finances.

Revolut Business metal cards are crafted from a single sheet of reinforced steel and come in five signature colours: black, gold, rose gold, space grey and silver. Customers on paid company plans receive one, two, or five free metal cards each – depending on their selected plan. Additional metal cards are available for purchase for £49 (€54.4) each, or the equivalent in your chosen currency.

In just five years, the company has more than 12mn customers in the UK and Europe. Earlier this year, Revolut had raised $ 500M (approx €425.8M) in its Series D round of funding with a valuation of $ 5.5B (approx €4.6B). To date, it has raised over $ 800M (approx €681M) in funding and employs more than 2,000 people globally, thus becoming the UK’s most-valued fintech startup.

Featured image credits: Revolut

The post Revolut to move its Irish accounts to Lithuania due to Brexit; launches new metal cards for business customers appeared first on Silicon Canals .

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Bank-as-a-service startup Swan helps other companies issue cards, accounts and IBANs

Meet Swan, a new French startup that wants to let other companies offer financial services by issuing cards, bank accounts and IBANs with just a few lines of codes. The company could be considered as a bank-as-a-service platform, like Treezor or solarisBank.

Originally founded by startup studio eFounders, the startup just raised a $ 5.9M million (€5 million) seed round led by Creandum with Bpifrance’s Digital Venture fund also participating.

Swan has obtained an e-money license from the French regulator, which lets them operate payment services and hold user funds. Unlike a bank, it can’t issue credit lines. The company also handles risk, which means that it handles KYC processes (“know your customer”). Essentially, if you’re working with Swan, they take care of all the risky aspects of managing money.

Compared to other bank-as-a-service companies, Swan doesn’t necessarily want to power neobanks and help them get started. The startup thinks a ton of companies touch on financial services but can’t offer those services because it’s such a big investment.

For instance, you can imagine an invoicing product that generates IBANs for you so that it automatically matches incoming transactions to the right invoice (like Upflow). On-demand companies could issue cards to their delivery employees partners so that they can pay for groceries and food directly using a Swan-powered card. Marketplace companies could handle pay-ins and pay-outs at a more granular level with each client managing their own e-money wallet.

This vision is part of a bigger trend called embedded finance. By expanding your product to control a bigger stack of the experience, you can provide new products and services and make your customers stick around for a long time.

As a Swan customer, you can customize the branding with your own logo and colors. When you issue cards, you can choose between a physical Mastercard card or a virtual one. They work with Apple Pay and Google Pay. You pay €900 per month and a flat monthly fee for each account and card that you issue.

Swan is taking a developer-oriented approach. The company says it can take several months to integrate a banking-as-a-service product into your own product. With an API-driven approach, Swan wants to make it as easy as integrating Stripe on your e-commerce website.

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