Dave, the neobank that forecasts your checking balance
Dave, sometimes referred to as dave.com is a fairly new digital banking service created to give Americans innovative opportunities and financial tools. The neobank’s main objective is to “advance America’s collective potential.” In this article, we’re going to discuss exactly what Dave is? We are also going to talk a bit about its history, its advantages, its features — and, primarily, settle the question, once and for all, if Dave is a real bank.
What is Dave?
According to a report published by the Consumer Financial Protection Bureau (CFPB) two of the biggest costs consumers face when owning a checking account are overdraft and non-sufficient fund fees. How much do banks make off these two revenue streams? A collective $17 billion a year. That’s a huge amount of money most Americans are giving away for free.
Dave’s main mission is to help you skirt these two costs. Dave is an app designed to forecast the next 7 days of your checking account balance. Dave highlights the lowest amount your balance can hit and gives you a warning when you’re getting near that number — something most other banks, for obvious reasons - their profit margins - don’t do.
Dave underscores not only your current transaction and your pending transactions but also makes predictions, based on your history, on future transactions. The app then makes a forecast and based on your projected paycheck, on whether or not you’re likely to overdraft and when. Once Dave hands you this report, the app gives you the option to borrow $25, $50, or $75 at no interest - if you earn at least $500 in income - in order to side-step this hiccup.
Dave also has all the features and tools of a completely digital bank. Including checking and the ability to build credit with your rent and utility payments.
Also, Dave has one extra key feature, which we’ll delve into in a couple of paragraphs — Side Hustles.
The Story Of Dave
Dave was started up by 3 friends - Jason Wilk, Para Chitrakar, John Wolanin - that were simply fed up with their banking services. Their biggest complaint was overdraft fees. They began to understand, after months of research, that most banks want you to bottom out on your funds.
Why? It was a billion-dollar cash flow. They were making a huge profit. Most banks had all manner of notifications, for all manner of services, yet somehow, update after update, they failed to install a tool that could help their customers get a head’s up when it came to overdraft. What's worse, Banks were aware that 1 in every 4 Americans would incur an overdraft at least once every year --- and more than 10% over 8 times.
Instead of building a bank, right out of the gate, they decided to simply fix one of the biggest pain points 99% of Americans were facing. How? By initializing a $1 a month-service that gave millions overdraft protection and an automated budgeting algorithm.
The service must have hit a vein because almost overnight they managed to snag Shark Tank star Mark Cuban who ended up investing $3 million in the company. Cuban, in later interviews, told reporters that he felt compelled to help out due to personal experiences — In his 20s he had been crushed multiple times by overdraft fees.
Dave became the Apple App of The Day in April 2017 and has been downloaded over 10 million times on IOS. The company was named one of the next billion-dollar startups by Forbes and, less than 4 months after that headline, Dave proved the publication right. In October 2019, Dave received a valuation of $1 billion.
Today, Dave has increased its funding from Mark Cuban’s initial $3 million to more than $180 million.
Another one of Dave’s biggest features is Dave’s Side Hustles. Side Hustles are ways Dave can help its consumers put a little extra cash into their pocket every month. How does Dave do this? By hooking its clients and members with local, flexible jobs that they can fit into their schedule.
Dave has a network of key partners who are constantly on the lookout for new talent. Dave customers can apply directly to the partners and start working with them right away. The company has helped tens of thousands of members discover their next big side hustle and find new exciting employment opportunities.
Most Americans, over 34,8%, have subprime credit scores. That means they are subjected to extra scrutiny when trying to get a loan. An extra 16% have extremely bad credit, this means that if they do get a loan, they will have to face unfair cutthroat interests.
What most Americans fail to understand is that there are multiple, easy ways to build credit and improve the one you already have.
Dave has partnered with LevelCredit to help you out. It lets you report rent, and utility payments to major credit bureaus, which in turn gives you a serious credit-building advantage. This is normally a $100 a year service, but if you set up Direct Deposits through Dave, members can get it for free.
Dave Banking Features
Aside from overdraft protection, build credit, and side hustles, Dave also offers standard banking services through their partner bank, Evolve Bank & Trust. This includes:
- A Dave Debit Card that gives you access to your funds.
- A spending account.
- FDIC protection for up to $250,000.
- Access to ATMs.
- No monthly fees.
- No overdraft fees.