- 86 400 has become the first publicly available neobank to offer transaction and savings accounts in Australia on Tuesday.
- The app-based bank will launch a transaction account as well as a savings account with an interest rate of 2.5%, conditional on depositing $1,000 per month.
- It also promises near-instantaneous transfers, reminders about upcoming bills, fingerprint and facial recognition, as well as an overview of your entire financial wellbeing.
- 86 400’s launch came just hours after competitor Xinja received its full banking licence. While Xinja immediately announced it would begin rolling out transaction accounts, its customers are required to join a waitlist. That means 86 400 has managed to just scrape in to become Australia’s first consumer-facing neobank to market.
Correction: A previous version of this article mistakenly referred to Xinja as having been the first neobank to be available to the public. It has subsequently been amended to clarify that Xinja has a waitlist requirement, making 86 400 the first — not the second — publicly available neobank in Australia to offer personal banking. You can read about their feud here.
For years, Australia has been stuck with the same big four banks, and a handful of smaller ones, with no real new competitors in sight. Until now.
In the space of mere hours Australia has managed to welcome its first two neobanks — digital banks with no physical presence — to the market. On Monday, Xinja received its full banking licence and announced it would begin rolling out transaction accounts to its waitlist — a process Business Insider Australia understands will take a couple of months to complete.
Just hours later on Tuesday, rival 86 400 announced its own launch without any wait time, making it the first to publicly offer transaction accounts in Australia.
“[Today] we’re launching a fully-featured transaction account and a savings account with an interest rate of 2.5% as long as you deposit $1,000 a month in either,” 86 400 CEO Robert Bell told Business Insider Australia.
86 400 — named after the number of seconds in a day — received its full banking licence in July and managed to turn around its app in just seven weeks. Xinja now appears to be undertaking the same process.
The last of the trio in the personal banking space is Volt which, despite having received the first full banking licence in Australia of the three, is yet to launch publicly and offer banking services.
That journey has been anything but quick, Bell said.
“We’ve been effectively running a bank for six months over which time we’ve been operating with staff as customers. We’re actually already up to our 29th version of the app,” he said.
“When we got our full banking licence seven weeks ago, we put out the app within 48 hours and could get 5,000 early users onto it for testing. Now we’re happy to launch to the whole of Australia.”
In doing so, 86 400 will be the first taste the country has of neobanks.
The class of new challenger banks promise to be cheaper, faster and smarter than the unwieldy big banks. They say that with no physical branches to maintain, their lower overheads mean more savings for customers. With no old tech weighing them down, their apps should help you to manage your money faster and smarter.
That goes for everything from signing up for an account as well as all the traditional banking functions you require.
“You can download the app on the app store and sign up in two minutes. The digital identification is done in real-time so you use your passport or driver’s licence and that’s all you need. We literally designed it so you can actually do it sitting at the bus stop,” Bell said.
Once completed you’ll instantly have access to your two ‘Pay’ and ‘Save’ accounts and an aqua-coloured Visa debit card will be on its way to you in the mail.
In the meantime, you’ll have access to Apple/ Google / Samsung/ Fitbit and/or Garmin Pay as you see fit. Payments are made by Osko, making it near-instantaneous to transfer money to a friend for a round of beers for example.
You’ll have free cash withdrawals from 10,000 ATMs in Australia and just like any fully-licensed bank in Australia, deposits up to $250,000 are guaranteed by the Australian government.
Lacking the brand and branches, Australians might feel sceptical of a neobank and the security of their money but they promise to be as secure as any of the big four.
“We’ve got the same security you’d expect at any bank. You’ve got a passcode to log in and you can choose one for each of your devices. We also have biometrics so you can use your face ID or fingerprint,” digital product Bryce Guderjahn said.
Then there is the app itself.
“We know Australians have relationships with multiple banks and there’s more money coming and going automatically than ever before. So we give you a full picture of your finances to understand exactly how you’re tracking across all your different accounts,” Bell said.
“That helps customers feel less anxious and more in control of their situation.”
That means you should be able to see your next Netflix subscription payment or electricity bill before it drops, helping you get ahead of the curve and ahead with your money.
“Australians waste about $2.7 billion a year on unused subscriptions so those kind of reminders are vital to make sure you’re not flushing money away,” Bell said.
That’s just one major feature that neobanks hope draw customers over to help you save and spend, as well as offering other helpful nudges.
“If you’ve deposited just $999 and the end of the month is coming up, we’ll send you a reminder to top it up to $1,000 so you get the bonus interest. What neobanks are really about is having the customers’ interest at heart, not our own profits,” Bell said.
It’s that idea, on top of all the bells and whistles, that 86 400 and its ilk hope to convince Australia to switch from a big bank and go digital.