Planet Money The hidden world behind your new "banking" app
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Aug 16, 2024 Dive into the alluring yet risky world of modern banking apps that promise convenience without the constraints of traditional banks. Discover how a Texas couple navigated the ups and downs of their financial journey and the gamified savings approach of one enthralling app. Hear the chilling accounts of users facing crises when their accounts were suddenly locked, revealing the darker side of fintech. As trust issues and regulatory ambiguities surface, experts weigh in on the future of saving in a tech-savvy world.
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Fintech vs. Banks
- Fintech apps, like Yotta, often resemble banks, offering accounts, debit cards, and even FDIC insurance.
- However, they are not banks and operate under different regulations, posing risks to consumers.
Yotta's Appeal
- Sharinda and Jordan Gonzalez, a couple in Texas, were drawn to Yotta, a fintech app, for its prize-linked savings accounts.
- They deposited increasing amounts, even their entire paychecks, attracted by its ease of use and rewards.
Frozen Funds
- Sharinda's Yotta debit card was declined at a bookstore, revealing a larger issue.
- Thousands of Yotta users lost access to their money due to problems with Synapse, the intermediary company.
