US neobank Current has been able to attract millennials and Gen Z customers with its unique offerings:
New York City-based neobank Current is uniquely offering its banking services through a mobile app, called Step. Its prime offer is a checking account, which has savings features, called ‘savings pod’. In addition to the banking services, its customers can buy and sell cryptocurrencies, manage their budget and accumulate and redeem rewards points. All the deposits in the accounts are FDIC-insured and there is a Visa debit card offered free. Customers can withdraw from 40,000 ATMs across the US.
The personal checking account allows customers to set aside funds in the ‘savings pod’ and the pods offer instant and unlimited transfers from spend accounts.
TRADING IN CRYPTO
There are other benefits that the customers can enjoy, which include a faster direct deposit, overdraft protection, which is called ‘Overdrive’ and which lets account holders have an overdraft up to $200 with no overdraft fees, Teen Banking where parents can link a teen debit card to their main account thereby educating children on managing their own money, and cryptocurrency investing where a customer can buy up to 27 of the most popular coins directly using the Current app, including Bitcoin, Ethereum, Dogecoin and Shiba Inu.
Current’s customers will primarily be banking through the mobile app Step. However, there are no phone or online chat service and customers will have to fill out a request online and the bank will contact them via email or chat support within the mobile app.
Current has partnered with FDIC-insured bank Choice Financial Group and depositors are insured up to $250,000 for each account ownership category. Its cash-back rewards program is very popular as customers can earn 15x points on purchases made at participating merchants.
One of the minus points that customer hold against Current is the fact that depositing cash in the current account will incur a $3.50 fee.
NOT A BANK, BUT A FINTECH
Current does not claim to be a bank; it says it is a fintech that provides banking services.
Current has built a millennial/Gen Z brand image through an effective strategy marked by inclusivity, simple and honest propaganda and word-of-mouth spreading of its advantages. Current’s CEO Stuart Sopp has specifically said he would want Current to serve millennial/Gen Z, underserved sections of people like those who live pay cheque to pay cheque and teens.
Its services are marked for efficiency and speed. There is 24×7 support for customers and withdrawal from ATMs globally are free. It sends pay cheques up to 2 days faster through direct deposit, which has indeed added value, especially for the gig-economy workers, teens, etc. Instead of holding onto customers’ money and delivering on the date specified by the employers, Current makes the funds available as and when required. There is no minimum balance and no hidden fees. Every in-store purchase made using the Current card earns points for the customers, which are redeemable and available to all users, while premium users can earn more points at specified locations.
Current has raised a $220 million round of Series D funding. In Series C funding it had raised $131 million a year ago. It has also tripled its valuation in 5 months, to $2.2 billion.
Interestingly, Current had its beginning as a set-up to offer parents-controlled debit cards to teens, and then graduated to offer personal checking accounts powered by the same underlying banking technology, essentially offering teen banking, its Step mostly appealing to the 13 to 18-year-old crowd directly.
ITS OWN TECHNOLOGY
Unlike other neobanks, Current’s back-end banking infrastructure, essentially core banking, is built in-house completely. The bank has said it is focused on exclusively building technology that enables it to work with many strong partners on the banking side. This approach offered longer-term advantages for the bank, especially lower costs and an ability to create products and services no one has done so far. with it owns basic infra, it can now perform a variety of transactions itself such as debit, ACH, direct deposit, peer-to-peer payments, mobile check deposits, cash deposits, points rewards and points redemptions.
Since the bank has its own banking ledger of record, it is able to build its own in-house debit card points product, with ledgered balances redeemable for cash, a system which others usually outsource to third-party providers. This allows Current to show merchants direct connections between points offers on Step and purchases with merchants – it shows ‘intent’, or the physical presence of the user and the actual transaction.
Its decision to have its own tech infrastructure has indeed been helpful for the neobank in a competitive market as banking-as-a-service enterprises have made it quite easy for many enterprises to get into the market, but for Current, there is a strong tech foundation where it can launch more and more unique products with the least efforts and time. Remember, Current claims it is a tech company and not a bank.
mohan@bankingfrontiers.com
This article has been compiled based on publicly available information on the web, particularly the bank’s own website.
