Robinhood is launching a new cash card today that lets you round up purchases to invest in crypto or stocks.
Because it is at the intersection of finance and tech, we have very clear, separate regulatory entities for the overall parent company, Robinhood Markets. You have specific entities that focus on brokerage, specific entities focused on crypto, for example. Then, of course, there are functions that spike across them. There is G&A, there is finance, and so on.
You are correct that most companies that have that kind of structure will ship multiple apps. Here, you have a product that is just one app, that’s Robinhood. People think they are dealing with Robinhood as one single company. It’s fascinating to see the corporate structure reflect the product design.
There are places where you say, “This is a dedicated crypto team. This is a dedicated brokerage team that is just looking at specific features that people want.” I do. Frankly, I tell my team and I tell my leads, when you are in the business — when you are a senior operator in a company — the day-to-day currency is decision-making. It’s a contact sport and you do that over years.
The number of times the answer is, “Actually, it may not be,” is amazing. The only trap is that sometimes we are awful at predicting hyperlinear outcomes. Humans are very linear, so sometimes a lack of imagination may show for the team. They may say they can’t think of an outlier success. Anyway, that is the “why.”
So as you can tell, this is not an easy, neat process with me, but that is decision-making in real life versus on TV. It is messy and kind of non-linear, but that is what you need to make the right decisions. Those are good questions. Again, the analogy I sometimes think of is Google Search. The interface is simple; it’s a search box. Anyone can type into it. Then under the hood there’s indexing, there’s crawling, there’s ranking. There is a whole bunch of machinery that needs to go into it.
Now the SEC is actually looking at this. How can you advance or compress the settlement process so that you don’t have to hold as much of a buffer, in case the settlement goes in a different direction than you expect? I would think of it in three different buckets. There is the Fortran COBOL, which has not changed since the ‘90s, with banks and financial services companies. Then I think about fintech. Folks who have actually been mobile first — thinking about the interface, thinking about the customer outside-in — and looking at more of the building blocks, the Lego approach, to more parts of the financial system.
Payment for order flow is not new. What is new — and what Robinhood has pioneered — is commission-free. Previously, it was extraordinarily difficult for people to say, “Well, I’ll just buy this stock because I believe in it,” because of three reasons. One is that every trade, if you are charged $10 or $35, is expensive for most people.
When I look at Robinhood, I don’t know that the way the company is making money is by collating a bunch of trades, selling them to a clearinghouse, and giving them data about what the retail investors are doing. It’s relatively opaque in the product.
These are products and features that we have shipped in the last few months. I am seeing that both quantitatively and also qualitatively, when we do customer research, they really like it. There are economic barriers, obviously. Then there are experience barriers, like you don’t know how to do it. I think there is the emotional barrier. For a lot of people, this just feels like a black box and they are intimidated.
Thank you for answering all of my foundational questions first. Part of the reason you’re here is because Robinhood has some news. Today you are announcing a cash card. Tell us about that.Yes. We are announcing Robinhood cash card. It’s a debit card and a spending account. It actually does three things. One, when you go about swiping your card or using it anywhere you go, it helps you round up the spare change that you can invest in crypto, stocks, or cash.
There are some parts of the system that we have had to build. But there are great partnerships with companies like Visa or MasterCard. We had to figure out what parts they do well and just rely on their expertise in terms of payment processing and so on. I think what is interesting here is that we are, as you noted, bridging the TradFi/DeFi link here in a couple different ways.
The connection to investing here is basically that you are going to take the round-offs and add the bonus and automatically invest for people. People who are debit-primary is increasing by the year. A lot more younger folks are debit-primary, first of all, either because their credit score is not built up or, with the credit card companies, they can see how they can get bogged down, they want to be more in control of their cash flows. There is more and more of America that is debit-primary.
We already have people who do direct deposit. We have a cash management license. We have state licenses in most states and we are working on the rest. Again, the idea here is to have the licenses that are called money transfer licenses, and it is the same that a classic cash card plus a spending account would have.
I think I would reframe this more. In some of these areas the regulations are very clear; the bright red lines are clear. The goals are common — like customer protection, access to more financial inclusion, which the regulatory bodies also want. And education, we have had many conversations with regulators, they see how we have done this in product, and they’re like, “That’s how it should be done.” We’re not sending them away to a boring seminar and lecture.
Just think about the problems we are looking at. On one hand, it is the consumer experience and customer experience that you want to think about, and on the other hand, it is the finance and culture intersection. As cheesy as it sounds, I think crypto is as much a cultural phenomenon as it is a technical and financial phenomenon.
And then there’s the third thing. In the uncertainty that we are facing at the world level, how does inflation, fiat currency, how do those things intersect? Is there an alternative that is more stabilizing for people? My honest answer here is that I think that it is not at the crypto level, it is actually at specific coins and specific tech. If you look even between Bitcoin and other alternatives, there is a difference. We are constantly talking to our crypto leads. We are actively talking to other folks. This is an actively emerging area and we want to make sure that we understand the implications of it, and the long-term steady-state implications.
We are starting to. I think this is one where, instead of each of these companies trying to do this in their own silos, crypto is fundamentally such an open community and there are a lot of pieces that are developed in the public. Our thinking right now is that it is much better to participate in that broader effort and pitch in. We are starting to do that. I don’t have anything specific that I can share yet, but it is on our minds.
We have a very well-formed asset listing framework that we use. First of all, it is really important that all of these are safe and are things that customers want. That’s been our guiding principle. And, is it something that we can provide on the platform with ease of use. The second thing that is really interesting is this idea of embedded crypto. Do the things that you need to do, but if crypto can make them significantly better, whether it is sending payments, spending money in more efficient ways, or getting more yield on your savings, that is the aperture that we are putting on for Robinhood. Cryptocurrency is an asset class, as an investing company. Then embedded crypto, we try to rethink and help people if there is a 10X, in terms of how they do things.
I think the thing that is interesting about NFTs is that it’s an end in itself, in some cases. I think the really fascinating opportunity is, “How is it a means to an end?” It’s access, for example. It is a portable identity that you can carry around, say if you are moving from one product to another, or one game to another, and so on. It is going to be less and less specific as a purchase. At least that’s my personal opinion.
When I talk to the heads of products, they want their phone apps to be stickier, they want people to use the apps more. Primarily, what you use Robinhood to do is trade. Famously, the more you trade, the more likely it is that you will lose money. How do you think about balancing that dynamic?
Ireland Latest News, Ireland Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Exclusive: Stefania Spampinato & Danielle Savre on Their 'Crazy' Chemistry & What's Next For Maya & Carina in 'Station 19'Station19 stars, spampistefania & D_SAVRE, share with us their feelings towards 'Marina.' Hint: they're just as emotionally invested as we are. 😉 Station19 (🖊KristynBurtt)
Read more »
506.2 Million DOGE Shoveled by Robinhood and Anon Whale: ReportA Dogecoin transaction tracker has noticed several massive transfers of DOGE, carrying $69 million worth of crypto
Read more »
Humboldt Broncos Tribute Centre: Ethan Bear speaks to the importance of the 'core covenant' and building a foundation for future generationsICYMI: Humboldt Broncos Tribute Centre: Ethan Bear speaks to the importance of the 'core covenant' and building a foundation for future generations
Read more »
Advocate Masonic hospital planning sweeping, $645 million construction, modernization projectAdvocate Illinois Masonic Medical Center is planning a sweeping, $645 million project to modernize the hospital.
Read more »
Stock futures trade cautiously to end the weekU.S. equity futures traded cautiously after Western governments promised new sanctions on Russia.
Read more »
Urban Evolution: How Species Adapt to Survive in CitiesSpecies in urban settings are evolving along subtly different lines than their rural counterparts, researchers are finding.
Read more »