Wealthsimple has entered into the spending space with the launch of Wealthsimple Cash, its first hybrid spending and savings account for Canadians.
The hybrid account is Wealthsimple’s fourth product alongside its investing, tax, and trading offerings. Wealthsimple Cash marks the company’s first expansion into the spending space.
“We need to be laser-focused on delivering transparent, accessible financial services to consumers.”
The Toronto-based FinTech startup has partnered with two “major Canadian banks,” according to The Globe and Mail, to launch Wealtshimple Cash. Wealthsimple, itself, does not have a banking licence, due to strict Canadian regulations. However, the two banks, which Wealthsimple has not revealed, will hold Wealthsimple client’s assets and money through the hybrid account.
“Canadians are used to the status quo when it comes to everyday banking, multiple accounts, high fees, and low interest,” said Michael Katchen, CEO and co-founder of Wealthsimple. “With Wealthsimple Cash, users can enjoy the power of a high interest savings account for all of their day-to-day spending needs. And they can do so while enjoying the full benefits of a Wealthsimple account: simple, affordable and transparent.”
The launch of the spending and savings account comes as Wealthsimple has been actively working to expand its financial service offerings. Wealthsimple Cash is one of three businesses that Wealthsimple has registered over the past few months. The others include Wealthsimple Digital Assets and Wealthsimple Payments.
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Wealthsimple has plans to divide its offerings into three pillars: saving and investing, responsible credit, and smart insurance. In December, Wealthsimple announced it was separating its direct to consumer and Wealthsimple for Advisors businesses.
At the time, Katchen that Wealthsimple is at a “pivotal stage” in its business and has a “once-in-a-generation opportunity to transform financial services for Canadians.”
“To take full advantage of that opportunity, we need to be laser-focused on delivering transparent, accessible financial services to consumers, both directly and in collaboration with our institutional partners,” he stated.
The spending account offers a 2.4 percent interest rate and allows Canadian users to save and spend through a mobile app and a metal Visa credit card. Wealthsimple Cash does not have monthly account or low balance fees, nor account minimums. It also allows for direct deposits, payment of bills, and supports Apple Pay and Google Pay.