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Could the future of banking not even involve a bank? This is exactly what's ahead of us according to Wildcard - Australia's brand new fintech disruptor with (on the face of it) a pretty genuine customer-first outlook. Wildcard don't have any branches, but they're not a digital bank. They provide a transaction account, but have no banking license. Wildcard even offer a service entirely via a mobile app - yet they're not even a neobank, in fact they're not any kind of bank - and they're determined to ensure we're aware of this fact. So what exactly is a Wildcard?
The personal finance start-up drip-feeds your paycheck from a 'pay account' into a 'spending account' throughout a month, fortnight or week, however long until the next lump sum of your salary is usually deposited. This essentially creates a 'beforepay' barrier aiming to stop millennials from spending too big too soon when they see a couple of extra zeros land in their account, enforcing budgeting and encouraging saving. Wildcard boasts that with their service, you will get paid every day - and it's hard to argue, especially if you're one of the 24% of Australians under 30 who have less than $1000 in savings.
Unlike most of the new online-only neobanks entering the Australian banking market, Wildcard has not applied for, nor needs an APRA banking license, it has instead partnered with EML Payments - quite deliberately distancing itself from the tag of being a bank. Instead of a banking license, Wildcard has a financial services license, allowing it to offer 'basic deposit products'.
You might be wondering as we did where exactly your paycheck is while its being drip-fed into your 'spending account'. EML Payments is an ASX-listed Mastercard issuer, and it holds all Wildcard customer funds in escrowed accounts, this means that Wildcard is paid a rebate by EML based on the total amount held in these accounts - contrary to the profit structure of banks, credit cards and buy now, pay later services which make money by getting customers into debt - Wildcard actually makes money when its customers have more of their own money.
Wildcard's biggest coup could however still be to come, with the disruptor being included in the list of ten financial organisations participating in the ACCC's Consumer Data Right (CDR) testing program ahead of open banking's full Australian launch in February 2020. This puts the start-up in the box seat to make the most of financial customer data sharing law changes as they come into effect and consumers are made aware of the benefits. In a stark warning of how easy it may be about to become for consumers to jump ship from established banks, Wildcard founder Nathan Tesler said last month he is planning to "build a 30-second bank account switching service based on this (financial data sharing) technology”. It seems the only thing standing in his way is how loudly he can shout about Wildcard. After all, we've all heard of Afterpay, but how many of us knew of 'beforepay?'
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