A few months ago I read an interesting article about a new student banking experience for “millennials”. At the time the proposal, called Loot, was a start up seeking funding to try and get the concept off the ground. Without particularly thinking I went and added my name to the waiting list, and recently got a push notification letting me know that I could register! So far I’ve not seen very many reviews of this, and therefore plan to post a few updates of my experiences using this new app!
The process of registering was much less strenuous than that of a high street bank account. You have to scan your id and take a photo to verify your identity, and also enter a few details about yourself. After a couple of minutes you receive a sort code and account number, with a card put in the post for you…. The app offers you the ability to transfer in and out money straight away (theoretically), and also allows you to begin setting “budgets” and “goals”. The budget is a weekly limit on the amount that you can spend using the card, which can be adjusted when needed. Once a budget is set the app shows the amount that “you have left to spend today” (the weekly amount divided by 7). Goals can be created to set monetary targets of how much you want to save. The App lets you name them, assign a target amount and a date you wish to achieve it by. You can then transfer money between that which is on your loot card and that which is being saved. As a current, fiscally stretched, university student I can certainly see the use for all these features, and have been unimpressed with my current bank’s provision of these form of tools.
At the moment I have a few worries regarding the app. Firstly, the way that e-money apps are currently regulated mean that bankruptcy of the firm providing the account could lead to complete loss of any money saved. This is because the money is purely virtual and so the European Financial Compensation Scheme doesn’t cover it. At least while the app is in start up phase I personally won’t be saving significant amounts of money through it. Secondly, the fee structure of the app seems to be (at least at the moment) questionable. At the moment, on my newly created account, the “Fees and Limits” tab is blank. This could very well be because my account is not completely enabled, I’ve tried transferring a small amount between banks accounts and this has yet to appear in the Loot app. The only clear area of this, from their website, is that there are a maximum of two free cash withdrawals a month. I will update this post below when I know more on this. My final current worry relates to the contactless nature of the Loot prepaid Mastercard. One of the biggest problems I currently have is that contactless transactions do not appear in my internet banking for a few days. This is because authorization is not instantly sought by the vendor for the goods. I feel that using the contactless feature may undermine my ability to budget daily by altering the date of purchases. This is something I will definitely test when my Loot card arrives!
I’m very excited to receive the card and see what I think of it! I’m also particularly interested in how the features of the app will change as it develops, and will be paying close attention to this. I will post again once I’ve suitably tested it to let you know what I think…