Fintech is positioning itself as startup upgrade Nebank. And yet, the company focuses mostly on personal loans and more recently credit cards. You cannot change your bank account with an upgrade. The upgrade is combining two important missing pieces of the puzzle with checking accounts and debit cards.
With today’s launch, the upgrade competes directly with other challenging banks such as Chaim, N26 and others. You can open a checking account, control it from the mobile app, send and receive money from that account.
There is no monthly fee and no minimum account balance. Under the hood, Cross River Bank offers 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 five times a month for its most loyal customers. You need to maintain a minimum balance or deposit direct payroll for that facility.
You will get 2% cash back when you pay with a debit card for membership and general everyday expenses. Eligible shopping includes convenience stores, gas stations, restaurants, food distribution, etc. You earn 1% on other debit fees.
Reward on debit card transactions are somewhat unusual. Most financial companies focus on credit card rewards because the interchange fees on credit card transactions are very high. Debit cards do not generate that much interchange revenue.
Renaud LaPlanche, CEO of Upgrade, told me in an email, “Neebanks cannot pay high rewards (or any rewards) specifically on debit cards because interchange fees are often their only source of revenue.”
Interchange fees may increase if you manage to attract millions of customers. According to The Information, Chaim generated more than $ 600 million in revenue last year thanks to interchange fees.
The company still plans to generate the majority of its revenue from credit products. “Our strategy is to monetize our base through credit,” LaPlanche said.
The upgrade also offers a credit card with 1.5% cash on all purchases. If, for one reason or another, you cannot pay your monthly balance payment, the company helps you combine monthly fees into installment plans that you can pay back in 24 to 60 months. You pay your balance at a fixed rate with the same monthly payment. Upgrade customers using the company’s checking account will get a lower rate on the upgrade loan.
You can also get a personal loan from an upgrade without a credit card or checking account. And perhaps you will discover other products of the upgrade after signing a personal loan.