What is a NEOBank? How do NEOBanks make money?
What is a NEOBank? How do NEOBanks make money?
What is a NEOBank and how do NEOBanks make money, let’s find out with FinFan.
What is a NEOBank?
NEOBank, sometimes called challenger bank, is a fintech company, often a start-up, that offers nontraditional banking services digitally. Typically, this company provides checking and savings accounts through a mobile app or website and does not have branches. It is common to find a NEOBank that includes tools to help customers budget and reach savings goals. NEOBank customers often enjoy lower fees and higher interest rates than their traditional counterparts.
How do NEOBanks make money?
Unlike traditional banks, which typically generate revenue from interest rates charged on loans and credit cards, low account balance fees, overdraft fees, ATM fees, and annual fees for credit cards, NEOBanks generally make money in two ways: collecting out-of-network ATM fees and through interchange fees—the fee merchants pay when consumers swipe a credit or debit card. The vast majority of NEOBanks generate revenue through interchange fees.
NEOBanks operate without physical locations, resulting in lower overhead, which allows them to operate more efficiently and rely on interchange fees for the majority of their revenue.
How safe are NEOBanks?
As a general rule, NEOBanks have a good reputation because they are subject to the same regulations as traditional banks. However, there are a few things you should keep in mind if you’re thinking of using one.
First, make sure you check the bank’s jurisdiction. If it’s located in another country, you may not be protected by the same laws and regulations.
Second, many NEOBanks offer FDIC-insured accounts, but they often charge a higher fee for this service. You’ll need to weigh the safety of using NEOBanks against the cost. But overall, NEOBanks are a safe and convenient way to manage your finances.
Are there any good NEOBanks in the Vietnam fintech market?
FinFan is the pioneer to bring NEOBanks modal To Vietnam when almost the same similar operation banks are using the digital banks modal.
What are the main services of the FinFan NEOBank modal?
FinFan’s vision is to become the international NEOBank of Vietnam. We have been taking efforts to bring the best way on cross border payment to Vietnamese overseas and the citizens in Vietnam.
Currently, we have been building and developing 4 main services:
What is the difference between digital banks and NEOBanks?
The two types of banks are similar when both are established with the same goal of digitalized banking and limited bank branches opening.
The only difference is when NEOBank is opened by a fintech company, a digital bank is built and funded by a traditional bank.
Read more:
Top 3 NEOBanks in the world
- Aspiration (United States)
Aspiration is a fintech company that offers a suite of financial products and services in the United States. The company’s mobile app allows you to seamlessly manage your money, giving you access to cash management and credit accounts under one platform.
Aspiration also provides a debit card so you can spend your money wherever MasterCard is accepted. Their Spend & Save s account allows customers to deposit cash into their Aspiration account at any time.
Features:
NEOBank with a particular focus on the environment and sustainability
Low-cost cash management account with no fees for ATM withdrawals, overdrafts, or monthly maintenance
A Spend and Save account that offers up to 3.00% APY interest or 5.00% for Aspiration Plus
A debit card that gives you up to 10% back on all purchases
A credit card that focuses on environmental rewards to combat climate change
The Aspiration Save Account’s up to 5.00% Annual Percentage Yield (“APY”) with up to 71x the national interest rate is variable, subject to change, and only available to customers enrolled in Aspiration Plus after conditions are met. Customers not enrolled in Aspiration Plus receive 3.00% APY after conditions are met. Terms & FAQ. The Aspiration Spend & Save Accounts are cash management accounts offered through Aspiration Financial, LLC, a registered broker-dealer, Member FINRA/SIPC, and a subsidiary of Aspiration Partners, Inc. (“Aspiration”). Aspiration is not a bank.
- Chime (United States)
Chime is one of the best NEOBanks you can use today. It partners with Bancorp Bank and offers a spending account, savings account, and debit card. All of which is very easy to manage from their finances app.
Chime was founded by Bill Harris (who previously co-founded PayPal) and Ryan Steelberg (who had worked at both Google and Facebook before his role at Chime). The company launched its first product in 2016 but didn’t begin offering customers their debit cards until 2017.
Chime has no monthly fees for a checking account and the Chime savings account pays up to 3% interest on balances over $10,000. It’s also one of only two NEOBanks available in all 50 states, the other being Simple – we’ll get onto them later.
Features:
Early direct deposit to help you get ahead with your finances
No monthly account fees
Savings account with up to 3% interest on balances over $10,000
An automatically-updating budgeting tool
Secured credit card
- Revolut (United Kingdom)
Revolut is a UK-based financial technology company that offers international money transfers, currency exchange, and payment cards. The company was founded in 2015 by Nikolay Storonsky and Vlad Yatsenko.
Established in 2015 with a focus on traveling cards and low exchange rates, the company expanded to America and Europe in 2016 with plans for opening a subsidiary in Hong Kong. Revolut’s mission is to empower people to take control of their finances with the best value-for-money banking services on the market today.
They believe that banks are too expensive, outdated, and not transparent enough with their customers so they set out to provide something better: low fees, instant payments & withdrawals around the globe at real exchange rates (no hidden markups).
Also access to over 70 (and counting) currencies at all times with no extra charges, UK & EU customer support 24/7 through live chat or phone calls. Read our full Revolut review for more information on this banking option.
Features:
Save money on currency exchange and international payments
Get more for your money with complimentary payments and budgeting support
Easily invest in stocks and crypto
Get a card that rewards debit card purchases
They offer overseas medical insurance
This article was curated and authored by FinFan's market research and development team, alongside our marketing department.
About FinFan
FinFan is a cross-border embedded financial services company that focuses on mass disbursement, fund collection, card processing, IBAN, and digital APMs solutions, which can provide valuable input and integration on and for the same.
FinFan is already integrated with almost the world's well-known MTOs, PSPs, switch, and core fintech platforms such as Money Gram, Thunes, Qiwi, Remitly, World Remit, Bancore, PaySend, Terrapay, Ria Money Transfer (Euronet), Dlocal, Ripple, TripleA, FoMo Pay, Wings, etc.
For more information, please get in touch with us through:
🌐https://finfan.io
📞(+84) 2866 85 3317
✉ support@finfan.vn
LinkedIn: FinFan
Dr. Tuyen Nguyen
Money Beyond Borders
_-Case-Study---ShopBack-Left-The-Buy-Now-Pay-Later-Market-(1).jpg&w=3840&q=75)
_-The-trend-of-quickly-opening-credit-cards-changes-the-embedded-payment-industry-in-Vietnam.jpg&w=3840&q=75)
