[corin_]

Hi Alex - in a previous comment you said:

> When you get your Simple card, it'll say "issued by {Bank Name}" on the back.

How does that fit around moving money around behind the scenes? Will each customer's money be limited to a single bank, and moved around between account types? Will all Simple's customers be using one bank that you have partnered with?

If not, could one Simple account actually have its funds stored between multiple different banks (or multiple accounts within a single bank)?

And when you say "we automatically move your money..." are we talking about the automated equivilent of when a bank phones / writes to you saying "looking at your behaviour over the last 5 years this account might fit you better...", or is it more like "every day your money might move somewhere else", or (I assume this) where between those two?

If I weren't English then I'd be signing up for sure, good luck :)

[i2pi]

Great question. Josh, CEO of Simple, here.

The way it works is the card gets linked to an account on signup. This account is a non-interest bearing card account. When you deposit funds, we place those funds in other accounts. The other accounts are determined by what products we have available from our partner banks, and your historic usage patterns.

For example, if you start spending less, we'll move more of your money into an interest bearing account so that you can benefit from your financial restraint.

As you spend money, we (in real time) move funds to the card account from your other accounts to cover the cost of anything you buy using the card.

As our portfolio of financial products grow, we'll continually rebalance your money across these products to maximize your return.

This system automates what most people try to achieve, but banks make difficult to do: namely, earn as much interest on money you have and pay as little interest on money you borrow.

We do this because it is the right thing to do for our customers & quite easy for a computer to manage. Other banks don't do this because they earn significant revenue when people make mistakes in managing their money. We have none of those punitive fees, so our interests are aligned with our users.

(PS: I'm in London right now. What's up with English Bacon??)

[corin_]

Let's say I'm a customer and I don't have a huge pile of savings - maybe I'm earning $2500/month and the total cash I own at any one time is between $7500 and $10,000.

My usage patterns might suggest that every month I spend around $2200, so you could leave that on the card and play around with say $7k. What happens if I then want to go out and, in a single transaction, spend more than $3k. Do you let me go technically "overdrawn" without charging me a fee and instantly move money in from elsewhere to replace it? Or do I have to inform Simple in advance of spending that much? Or do people without enough money to give plenty of buffer just not get their money moved around as much?

Thanks for your answers - and what's wrong with our bacon, it's amazing! How long are you over here for?

[i2pi]

If you spend more money than what we have placed on the card account, but you have available funds at other accounts we manage, we'll automatically move over the money to cover the cost of your transaction. No fee. Real time.

We don't have the notion of 'overdraft'. Instead, we set up a special savings goal for each customer called an Emergency Fund. We automatically start saving a small amount each day towards the Emergency Fund. So, you might have $1,000 in your account and $500 in your Emergency Fund. If you then went to a store and spent $1,200, we would draw $1,000 from your Safe-to-Spend and an additional $200 from your Emergency Fund. Again, no overdraft fee. In fact, instead of paying a fee and then paying interest on the overdraft, you will be earning interest on any money in your Emergency Fund. A small tweak on how overdrafts typically work, but a huge bonus for customers.

I'm just here for the day. I came to town to speak at The Economist's banking conference. Flying back tomorrow to celebrate the launch with our team.

[corin_]

Next time you're over here give "streaky bacon" a try, it looks to be closer to the norm in America. And I've made a mental note to eat some bacon next time I'm in LA to see what you're complaining about!

[Lewisham]

As an ex-pat, my impression is streaky bacon == American bacon, but America has no analogous product to English back bacon.

It drives me nuts. I haven't had a decent bacon sandwich in years :(