Robinhood is about to start offering free savings/checking accounts with a 3% interest rate. Trying to wrap my mind around how they can make that work.https://share.robinhood.com/cs-CKQH59zREuDDZQM8cfic9k …
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Ya the interchange revenue has to be the key
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If one’s spending is high relative to one’s wealth the effective APR of interchange is *stupid* high, and that is likely the case for most younger users, even relatively well-off one’s.
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(One thought I had is it could just be a bet that interest rates will continue to rise, so they offer above market for a while to grow customer base but then stay there as the rest of the market rises)
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This makes sense, low cost customer acquisition strategy as long as the interest rate expectations are met. I’d assume they can pull back rates if the increase does not materialize.
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Any thoughts on how they’ll get that customer profile instead of people who care about high interest treating it like a savings account?
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Also an alternative to spending marketing $ to grow brand?
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We need a hashtag for "business models that should be added to
@kevinakwok's coffee table book"Thanks. Twitter will use this to make your timeline better. UndoUndo
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