One, a banking app that launched to the public on Tuesday, is trying to take many of the products one might find at different fintechs — from spending to saving to borrowing — and bundle them into a single account and debit card.
The effect of accumulating those features in one place, its founders hope, will make One a true challenger to traditional banks.
“It seems like the [neobank] space is almost overcrowded, but I don’t think they’ve cracked the nut of acquiring customers from traditional financial institutions,” said Brian Hamilton, One's chief executive, the founding CEO of Azlo (a banking service for freelancers) and a onetime Capital One executive. “There is more value having things in one place rather than going to different startups to get competitive savings ... and a cool loan product.”
Hamilton co-founded One with Bill Harris, a former CEO of PayPal and Intuit and founder and CEO of the financial planning advisory firm Personal Capital.
Hamilton says there are a few things that set One apart from traditional and challenger banks.
For one, users can create pools of money called "pockets" for any spending or savings goal and share these buckets with others. This system is meant to be simpler than signing up for a joint bank account and more convenient than repeatedly transferring money through a peer-to-peer payment service.
Users can connect their One card to whichever Pocket they want to use for a specific transaction. For instance, if three One customers want to save $250 for a surprise birthday party for a fourth friend, one of them could set up a birthday party pocket that all three could put money into and spend out of. The person who starts the pocket has the power to shut it down.
“It’s like having unlimited free joint accounts,” Hamilton said.
Each account also comes with a line of credit that comes into play when the account is overdrawn; if users pay back this amount within the calendar month, they won’t be charged interest. When users set up a direct deposit, they are eligible for a larger line of credit.
Finally, the primary savings pocket earns 1% on balances up to $10,000. But customers can earn 3% on a portion of their paychecks that are deposited directly to One. If they choose to automatically round up spending on their One card and shift the excess funds into savings, the difference will also earn 3%.
One’s banking services are provided by the $1.7 billion-asset Coastal Community Bank in Everett, Wash.
Hamilton would not say how many customers One acquired during its beta testing, but said they numbered in the tens of thousands.
“We built a digital bank from scratch, rebuilt the stack down to the core and rails,” he said. “Having a minimum viable product is a misnomer when you think about a credible primary banking alternative for middle-income households. If you want me to not bank with JPMorgan Chase, there’s a baseline you need to meet there before that will be a credible alternative for me.”
