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Home Challanger banks Credit Sesame launches digital bank account to capitalize on expense management

Credit Sesame launches digital bank account to capitalize on expense management

 Credit Sesame introduced Sesame Cash, a free digital bank account as part of a new smart digital banking service that will help consumers grow their cash and credit in one place for free as they spend and save.

The account comes with a Sesame Cash debit card, for which Mastercard will now be the exclusive card network. Sesame Cash provides a unique solution geared toward reaching financial stability for the millions of Americans who face the daily dilemma of how to effectively manage and optimize their credit and cash.

Related: Ally Financial will buy CardWorks and it makes a $2.65 billion deal

The majority of Credit Sesame’s customers, along with more than half of Americans, live paycheck to paycheck and rely solely on their available cash and credit to live and make daily spending decisions.

Approximately 500,000 new members join Credit Sesame each month, and a recent member survey suggests that more than five million members want the new digital banking service offering that integrates their cash and credit. 

“We wanted to offer a service that’s not just another digital bank, but takes it to the next level with a financial platform that helps and works for the consumer and makes their cash work for their credit and their credit work for their cash,” Credit Sesame CEO Adrian Nazari told Banking Dive.

Adrian Nazari, Credit Sesame CEO (Source: https://twitter.com/adriannazari )

Unique to Credit Sesame’s bank account are daily credit-score updates, cash rewards for credit score improvement, and free identity theft protection.

Future advancements include a billpay service that helps users lower their interest payments and pay down debt faster, a roundup autosave tool, rewards programs, and budgeting tools.

Related: Credit-building “Self” Raises $20M in Series C Funding!

This move by Credit Sesame comes at a time when many fintechs are launching debit accounts and high yield savings accounts in order to compete with traditional financial institutions for not only consumer deposits but also mindshare. One of the company’s closest rivals, Credit Karma, launched a high-interest savings account last October that yields 1.30% (down from 2.03% at launch).

Credit Sesame’s decision to offer a debit card instead of a high yield savings account will ultimately prove to be a winning strategy. Many fintechs that have launched high-interest accounts in the past couple of years have little differentiation now that the U.S. Federal Reserve has cut interest rates to 1.25%.

Jan Cerny
Jan is an innovation enthusiast and Fintech news reporter. He specializes in news distribution, social media, and content analysis.

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