Re:Robinhood Will Retool Checking Product Following Scrutiny
by dmoy on Sunday December 16, 2018 @01:27PM
(#18694327)
So they're making up like 0.7% from fee cuts? As soon as they get big enough all debit card transactions are capped at 0.05% and like a quarter or something.
If the average transaction size is like $20 then they would not be able to make ends meet unless they took basically all of the fee for themselves.
In a universe where debit interchange fees are regulated to 0.05% and less than a quarter, I don't understand how this works.
Edit: I looked up the average debit card transaction amount, and it's over $40. The math doesn't work out at all.
Edit2: I guess if there's 3 more fed rate hikes the math might work out? That's not a good look though, if they don't increase rates along with the fed, because the gap between them and various savings account will shrink to almost nothing.
The remainder would presumably come from interchange fees. Ie, you put $500 into Robinhood, you then pay for something using your debit card, a cut goes to Visa, a cut of that goes to Robinhood, and a cut of that goes to subsidise your 3% interest.