Robinhood takes on Apple 😮; Stripe’s expanded fiat-to-crypto on-ramp is a killer to a dozen Web3 startups 🤯; Coinbase beats estimates 💪

FinTech is Eating the World, 8 May

Hey Everyone,

Happy Tuesday! Due to travels and delayed flights, Monday’s issue had to come out only now. But it’s perfect for today as we’re looking at Robinhood taking on Apple (really?, & why it makes me even more bullish on Apple), Stripe’s expanded fiat-to-crypto on-ramp, which is a killer to a dozen Web3 startups (& how it assassinated MoonPay, Ramp, and others), and Coinbase which has just beaten estimates (with a deep dive into their Master Plan that’s already paying off & why it could be a generational buy). Let’s jump straight into the red hot stuff 🌶

Robinhood takes on Apple 😮

The news 🗞 Once stock-trading darling Robinhood HOOD 0.00%↑ has introduced a new instant access savings account paying an interest rate of 4.65%, as per Alfi.

The move seems to be a direct response to Apple’s AAPL 0.00%↑ recent move into Savings.

Let’s take a quick look.

More on this 👉 The move comes just a day after the latest Fed interest rate hike, and it will be for Robinhood’s Gold Members, who pay $5 per month for membership.

More importantly, it is also 3 weeks since Apple launched its own highly competitive savings account offering 4.15%. It brought in $1 billion in its first 5 days.

ICYMI: Apple Savings account takes the industry by storm 🤑

The economics 💸 Robinhood says the rate is 19x more interest when compared to the national average savings rate.

All eligible customers who opt into brokerage cash sweep have their uninvested brokerage account cash automatically moved to deposit accounts at a network of program banks. The cash deposited to these banks is covered by FDIC insurance up to $1.5M (up to $250,000 per program bank, inclusive of deposits customers may already hold at the bank in the same ownership capacity). On June 1st, this maximum will increase to up to $2M.

Non-subscriber Robinhood accounts earn 1.5% interest for all uninvested brokerage cash. Subscription seems like a no-brainer then… 🤷‍♂️

✈️ THE TAKEAWAY

Taking on Apple, huh? 🤔 First and foremost, this move was rather inevitable given the current macro situation and rising interest rates. Also, following the collapse of SVB, Signature, First Republic, etc., the fight for customer deposits has never been so intense (unless you’re JPMorgan JPM 0.00%↑, of course). But more importantly, this is about customer engagement and retention - despite the recent growth, Robinhood has been losing both users and their assets YoY:

Hence, offering 4.65% APY is attractive enough to try to make users come back to the platform. So far, this seems to be working, and a $0.9B increase in deposits in a single month is not bad at all:

Looking at the big picture, this data from Robinhood actually makes me even more bullish on Apple. With a somewhat similar APY (that could be easily increased) yet a 10-50x bigger user base (just in the US), the tech giant can take everyone out by storm. In fact, Apple’s mastery of user data coupled with its size and customer reach is already triggering a rapid change in the financial services industry that will soon leave established banks behind and at a competitive disadvantage.

ICYMI: Apple is building JPMorgan 2.0 😳 [deeper dive + lots of bonus reads]