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3 Comments

Idea: short-term investment of bill and rent money

You know how we get paid at the end of the month - typically last working day or something like this? And we have to pay bills during the month, they are on various days, arbitrarily distributed. This can include stuff like rent, internet/TV, mobile phones, any other subscriptions, utilities, etc.

You have this money in your account but you know it's not really yours. If it's a loan or credit card, paying early actually helps a bit. If it's regular bills, you don't even have the option - just for the sake of keeping your account clean and bills always paid.

So here's the idea from a user perspective: get the bill money on payday, put them into a super short term investment account of sorts, and pay the bills when they're due automatically from there. The interest will be small, but still - free money. If this is automated, it's really free money.

From a business perspective, if there's a way to make money out of large sums of money (a lot of people's bills = a lot of money) available for short amounts of time (that varies, but you know exactly how much every penny is available), you can make a profit and pay your users a chunk as a reward.

Ways to make money out of money me and a colleague thought of:

  • match people who need help with their bills but guaranteed later income with people who have the money already and want to put them to work before they go to pay the bills (automated, of course, it's sort of a peer-to-peer lending, borrowers pay small interest)
  • high-frequency-ish trading

What do you think? Is there anyone doing this already (if yes, I want to use it)? Anyone with finance knowledge - how can this be made to work?

  1. 3

    The first part is a good offer if interest rates are enough of a motivation.
    I have a feeling nowadays you might provide like 4 cents a year for customers.
    It's not worth it to trust you, setup accounts etc for that.
    Also would you garantee and have insurance on the money and process so it's on time and I don't get fined or listed for missing a payment due to a glitch?

    I wouldn't mix the 2nd part with the first, there are many rules, regulations, risks etc...

    Also were we are at and heading with rates you'd have to charge customers rather than reward them which is a real headspinner..

    In short while the idea is decent I don't think there is enough money on the table. I could be wrong, do the numbers, try to presell it..

  2. 2

    Why not just setup automatic transfers from interest yielding savings account to transaction account, and then next day from transaction account to the payee? Bit easier than founding a new bank :)

  3. 1

    The interest would amount to almost nothing. There's way more money to be made in payday loans, but it's highly regulated. Similar to LendUp.

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