Personal Finance15mo
Is Stable money a stable choice ?
I personally see it as game changer in how invest in FDs.
Any comments or thoughts or guidance would be highly appreciated.
PrancingNoodle
Does this affects stable money or is this an enabler?
Does this affect the stable money value prop.? Because as mentioned in the post fixerra is bringing in multiple FD issuers and providing infrastructure to build. Would that lower the entry barrier for building B2C product in FD segment as any fintech can expand horizontally in this segment by integrating with them.
Or stable money themselves are using these types of tools as an enabler? Just wanted to understand if I'm thinking this right?
9mo ago
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JumpyNoodle
Stealth9mo
Stable money is a financial product distributor. So the only way they can get ahead is showing large number of investors and AUM. Financial product distributors won’t have a strong moat. It’s about who has the most VC money to acquire users. And the margins for distribution of FD is max 1%. So they won’t even make money even if they achieve a large AUM. So they will eventually start lending
FloatingDonut
Stealth9mo
Customers money will be with AUM not with Stable money and with thin margin of 1% how will they start lending and how can a savings platform start lending on their platform it's like a store selling both Nicotine gum and cigarettes
And worth mentioning India's BNPL poster child Zest money huge failure
I believe fintech is all about transparency and giving power back to people that's what banks failed to do but now banks have also realised it's not just the infra they have to provide a good user experience like HDFC sky
PrancingNoodle
@Soprano90 yup makes sense. Agreed on the thin margins and no strong moat part. But somewhat lending doesn't make sense for them in the short term as @Gonxkillua mentioned but might be an option in a long term vision.
But @Gonxkillua then how will they achieve profitability or make a significant chunk of profit. Because even after achieving scale, 1% margin business is not worth pursuing.
Maybe in that case they somehow pivot to lending for a particular segment once they have enough user base and loyal customers. Because even startups like Refyne started with an earned wage access model is looking to be a NBFC for a particular segment (blue collar workers).
FloatingDonut
Stealth9mo
The major question is how did they even get funding ??
PrancingNoodle
That's what I am trying to understand. What is their moat. Is it a bank partnership (Banking partners exclusively tied up with them and offering good returns in FD)?
PerkyPickle
Student9mo
Yes
FluffyCupcake
Amazon9mo
Multiple players exist in digital FD market, for example - M2P
https://m2pfintech.com/blog/how-can-banks-and-nbfcs-leverage-the-potential-of-digital-fds/
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