Savings is a topic addressed by many fintechs. Digit is trying to set itself apart by introducing automated micro-savings. For several months now, the startup has also been offering to take charge of bill payment to relieve its customers. Read all about it.
Digit intelligently automates user savings
Whether they come from banks or startups, solutions designed to encourage consumers to put money aside are multiplying on the market. American fintech Digit has decided to focus fully on savings by intelligently automating its users' savings, a service that complements those offered by traditional banks. To take advantage of this feature, all you need to do is link a bank account to the application. An algorithm analyzes the saver's income and spending habits and, every 2 to 3 days, generates savings, the amount of which depends on the saver's financial situation.
The savings generated by Digit are placed in a dedicated account within the application. Funds can be withdrawn and transferred to your bank account at any time. Transfers are unlimited and no transfer fees apply.
During its pilot program in August 2014, the startup had managed to save all its users almost $600,000, a figure that demonstrates the effectiveness of its solution.
Automatic bill payment service
For several months now, Digit has been offering to take charge of its customers' bill payments. This new service is initially limited to telephone bills from 6 operators. Users simply need to enter the details of the operation to be anticipated, by entering the name of the supplier, the amount to be paid, the due date and their account details. Those who have activated automatic management will no longer have to worry about paying bills. Digit will take care of deducting small sums at regular intervals to cover the expense on the due date. This service still needs to be improved so that it can determine for itself which bills to take into account, and can be applied to all recurring payments (rent, pensions, subscriptions, etc.).
In 2019, the fintech also rolled out a new feature aimed at students who have taken out loans. The app makes it quicker and easier to repay this debt, which is typically around $20,000 in the US.
Although Digit's system is entirely secure, it requires almost blind trust on the part of users. To overcome this obstacle, the company has entered into several partnerships with banks. Finally, it has to contend with numerous competitors, such as mobile bank Chime, which enables its customers to save automatically by rounding off each transaction, and Sweden's Qapital.