Don't know what a fintech is, but sounds bad

Or you know how to play the game, I am $1k richer on the crazy bonuses these firms offered. We have Chime, Cash App, (former) Bloom, and others. I am a big fan of free money.
Fair enough, but what is the risk you took on for the $1000?

EDIT

After quickly perusing the Chime site I go back to the prior post…what exactly are these companies providing that traditional banks are not? What need are they satisfying that has gone neglected?

I’m happy to be enlightened.
 
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And the whole 3 days early thing is such a weird gimmick, once you get it 3 days early the first time you will then after get it every two weeks just like before.
I assumed you could continue to get each paycheck early, but if folks are relying on that every paycheck it’s not good. We had posts here about coworkers that couldn’t pay for lunch if their paycheck was late.
 
FinTech is a world of opportunity, much of which is badly needed. Because it is rooted in technology it’s not easy to understand, and some FinTech initiatives are not to improve or modernize, they just want to get around the regulatory system.

There’s no reason a domestic transfer should take 2-3 days with more for international. Credit card companies capture 2%-3% of each transaction but don’t add that much value. Wealth management and investing tools also capture a large % without adding corresponding value.

In business to business, apps like shopping carts management and payments, sales tax management, payroll taxes, etc. are areas where FinTech can add considerably value.

FinTech is about reducing “friction”, which means reducing the time to carry out a task (like a transfer or payment) and the cost. It also enables new business initiatives that weren’t previously possible. Shopify is a great example.
 
Fair enough, but what is the risk you took on for the $1000?

EDIT

After quickly perusing the Chime site I go back to the prior post…what exactly are these companies providing that traditional banks are not? What need are they satisfying that has gone neglected?

I’m happy to be enlightened.
Very little, never kept much money in any of them. Would put through an occasional direct deposit, grab the bonus and transfer the money out. Cash App (in the early days) would offer $7.5 if you spent $50 at wal-mart (grab a gift card for a future purchase) on a regular basis. Another paid us (2 accounts) $330 just for opening the accounts.

As to their continuing value, absolutely no value, I still have them but they offer no reason to use instead of CCs. But as MichaelB points out, they had enough of an impact that "real" banks copied some of their changes, early deposit and speed of transfers.
 
This is going to come off sounding a bit like a middle age rant, but so be it.

On the one hand, this sounds like many of the hard luck stories from the housing meltdown. People don’t read the fine print and don’t understand what they’re signing up for. You can buy a house with no income and no money down? Yes!

No. Well, yes, but did you read the part where your rate increases from zero to 10% after 5 years and run the math on what that means? You didn’t.

Fast forward to today and you have an entire cohort of people who have been consuming social media like it was news (and not a bunch of solitary schmucks broadcasting stream of consciousness drivel that is packaged as fact) who are RIPE to fall prey to garbage they see online. Why? Because reading comprehension and critical thinking has been sacrificed to 10 second videos and attention spans that lose focus the more they swipe left. Because if you got 1 million followers you must be right.

And so here we are. The land of uneducated social media influencers being paid to promote garbage to ill informed followers.

Just the latest iteration of the traveling medicine shows where people could buy Dr. Gallants Rejuvenating Tonic and Body Elixir that cures everything.
This is a brilliantly written post with a nice bit of humor to end it. Well done.

I agree that fintech ideas (emphasis on tech) are badly needed in the world, but also agree with chemEguy's observation that the popularity of the firms is driven by short form social media and influencers. This can lead to unscrupulous behavior.

This is where I mourn the loss of most forums on the internet. It was a golden age, now gone. This little island we live on, early-retirement.org, is a grand hold out.

Kids may say: "You are criticizing our important contributors, our influencers. What makes them different than the 'influencers' on your quaint little old-fashioned forum?"

To that, I would remind them that well moderated forums are generally cooperative efforts for the good of the users. Posts outside of the goals are scrubbed. Social Knowledge can run the site and make a profit with the ads, but as far as I know, our members don't profit individually on a view or "like" basis. Social Knowledge keeps us grounded through their excellent selection of moderators, so we don't go off in the weeds. (I've been found in the weeds by the mods, thank you for snagging me back.)

What's my point? My point is that on this forum we share a heck of a lot of impactful advice. Advice that really impact a person's financial life. Heck, many of us moved up our ER dates based on the good knowledge we find here. Gumby's yearly post of "important 'trigger' levels" of income is worth its weight in gold, for example.

The advice here is for the furtherance of our community, it isn't to get some click or view in order to pocket a few pennies that can turn into Megabucks if you have enough influence and followers. And that's what makes the original article so disheartening. This fintech's popularity was driven bottom up from TikTok and the like. On this forum, a search of "Yotta" shows nothing until this bankruptcy hit the headlines. And I can guarantee you that if it did come up, people would throw up red flags once they saw "Novel Sweepstakes" as part of their operating procedures.

Four years ago, Lauren Scott was scrolling through TikTok when she saw a video from EcommJess, a personal finance influencer with 750,000 followers, promoting Yotta Savings, a fintech app offering a chance to win cash and other prizes on top of regular interest. Scott liked the novel sweepstakes incentive and Yotta’s lack of fees, along with something way more traditional. “It was FDIC-insured, which was one of the main things that I looked for because you never know what to trust,” says Scott, 27, who lives in the Tacoma, Washington suburbs with her husband and seven-year-old daughter. Eventually, the couple moved all their money to Yotta.
 
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