May 16, 2020

FinTech profile: Starling is a new household name

Monzo
revolut
N26
challenger bank
Amber Donovan-Stevens
2 min
As challenger banks continue to gain momentum in the finance industry, companies such as Monzo, Revolut, and N26 are becoming household names. Alongside...

As challenger banks continue to gain momentum in the finance industry, companies such as Monzo, Revolut, and N26 are becoming household names. Alongside these is the mobile-only challenger bank, Starling, which has taken the UK by storm, winning Best British Bank and Best Current Account 2019, ranking in Forbes’ best banks of 2019 and generating an average of 4.5 on Trustpilot. FinTech takes a closer look at the bank.
 

Background:

 

2014: Founded by Anne Boden

(image: Anne Boden)

 

July 2016: Receives banking license

(image: Getty)

May 2017: Launches first mobile personal current account 

(image: Starling on Samsung)

 

March 2018: Launches business accounts

(image: Starling business account card)
 

Need to know: Starling’s four types of account

  1. Personal: The personal account has all the classic features one might expect for an individual current account. In addition to this, similar to challenger peers Monzo’s ‘pots’ and N26’s ‘categories’, users can set in-app ‘goals’ to set aside money for particular things.

  2. Business: With all of the capabilities of a personal account, the business account has real-time payments with categorised spending to ensure maximum organisation. The app is optimised for CSV files to assist with exports. The interface also enables alternation between accounts.

  3. Euro: With Brexit impending, this advancement in banking is particularly useful for Britons wishing to hold euros for free. Euros can be transferred seamlessly between personal and business accounts. This account is protected by its own IBAN and covered up to GB£85,000.

  4. Joint: The co-account has all of the features of the individual account, but is designed for multiple users.The app has a scanning location for one-touch, dual-authorisation of payments from this account, enabling all users to track spending. This is suitable for both couples and house shares to pool together finances for bills.

 

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Did you know?

This month, Starling is due to launch an online portal that allows customers to manage their finances outside of its app. The company said in its six-month update: “Starling understands that many SMEs want to manage their banking online as well as through mobile applications and to support this, it will launch its web portal in Q3 2019. Construction of this portal is underway and on track for launch in September 2019.”

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Apr 29, 2021

Stripe backs Step - the digital bank for teens

Stripe
Step
onlinebanking
Fintech
Joanna England
3 min
Stripe backs Step - the digital bank for teens
Payments giant Stripe continues it's startup investment streak and has also announced plans to acquire tax software fintech, TaxJar...

The digital payment solutions giant, Stripe, has re-invested in the San Francisco-based teen banking fintech startup, Step. 

The Series C round raised US$100m in capital from a number of backers, including Coatue, TikTok star Charli D’Amelio, actor Jared Leto, and Will Smith’s Dreamers VC, for the enterprise. 

Step provides a free FDIC-insured bank account and Visa card to teenagers. The accounts are backed by Evolve Bank and there is no subscription charge for its usage. Users don’t pay for their accounts and there are also no overdraft fees. 

The mobile banking app enables parents to set controls and limits on spending and encourage responsible finances. According to data released by the company, 88% of the platform’s users say this is their first bank account. 

Big backers

To date, Step has seen great success in the marketplace. The company has raised more than $175m from investors and now has 1.5m users.

Stripe, which was founded by Irish brothers Patrick and John Collison, previously led Step’s $22.5m Series A round in 2019.

Step's Series B funding round also brought in $50m, and has a distinctly celeb-tinged reputation with investors including Justin Timberlake and the pop duo The Chainsmokers.

Users get access to a free, FDIC-backed bank account, a spending card and P2P payments platform to send and receive money instantly.

CJ MacDonald, chief executive of Step, said the company is aiming to improve the financial futures of the next generation. “Step is the only banking platform that enables teens to start building a positive credit history before they turn 18 and does not charge fees of any kind.

He has previously spoken about the importance of financial literacy for young people. “Money is just one of those things where I think the more educated and equipped you are early, the better decisions you can make down the road,” he told PYMNTS. “And you can also prevent yourself from making costly mistakes. I mean, the average American doesn't have $400 in emergency savings and pays $350 a year in banking fees. If we can help this next generation just ultimately be smarter and more educated as it pertains to money, I think we'll all be better off.”

Kyle Doherty, managing director at General Catalyst and Step board member, explained, “Gen Z is flocking to modern financial solutions that can be easily embedded within their digital lives and Step has a unique model for how to do this right.”

TaxJar acquisition

The news follows on from Stripe’s recent announcement that it plans to acquire TaxJar. The fintech, which builds software for online businesses that automates the reporting and filing of sales taxes, will most likely be integrated with Stripe’s billing services.

Currently, No terms have been disclosed but the Boston start-up had raised more than $60m from investors including Insight Partners.

Stripe chief financial officer Dhivya Suryadevara said of the move, “With TaxJar, we will help millions of internet businesses running on Stripe with their sales tax and make it easier for them to sell internationally.”

Stripe also recently closed a $600m funding round that valued the TaxJar at $95bn and has been investing heavily in fintech startups, including Ramp and Check

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