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From their FAQ: > If you don't charge fees, how do you make money? > We earn revenue from the interest on deposits in Azlo accounts. We also earn a small sum
by koolba 8y ago
From their FAQ:
> If you don't charge fees, how do you make money?
> We earn revenue from the interest on deposits in Azlo accounts. We also earn a small sum every time someone makes a purchase with an Azlo card—the merchant pays to process the card transaction, and we get part of that payment.
Is this sustainable? From what I’ve seen businesses do not use debit cards, they prefer credit cards so Azlo wouldn’t be making much from the (already limited) debit fees.
The interest on deposits is a hell of gamble as well. Assuming they get about 2%, how much would the average account actually have on hand? Anybody with more than a couple $K to pay their rolling bills is better served with their own dedicated business savings account to get the 2% for themselves. That’d leave small accounts that are going earn next to nothing for Azlo.
- dajohnson89 8y agoif everyone had $2k in their Azlo checking accounts, that's a huge amount of money across -- say -- millions of accounts. So you can accumulate interest or do what retail banks normally do -- invest it. edit: invest it, on margin.
- jjeaff 8y agoSustainable? This is how banks primarily made money in the past. And those were banks with brick and mortar branches. If they are making home loans, they would make around 4-5% plus origination fees (that's where the money is at). For other loans like vehicle or commercial, they could make 6-8% or more. I'm sure there are also overdraft fees and negative account balance fees, wiring fees, etc. These type of fees are how modern banks make their money.