Mark Cuban took on big banks with the recent launch of Dave, an app that is intended to help millennials avoid overdrafting. The way it works is that it predicts future expenses of the users and unlocks their upcoming paychecks. Dave lets its users decide on the aspects that are fair to cash in. This is to disrupt the overdraft fees that banks collect. In 2016 alone, banks all over the country collected $38bn.
Jason Wilk, together with co-founders Paras Chitrakar, Dr. John Wolanin, and Zack Martinsek, raised $3M from high-profile investors. This was including SV Angel, Jonathan Kraft, Diplo, Skip Paul, The Chernin Group, and Mark Cuban. They created the app in order to outsmart overdrafts.
Upon connecting a checking account, the app instantly analyzes the trends that can be derived from the bank history of an individual. After the analysis, the app will display the person’s ‘7 Day Low,’ which is a number that represents what your account balance gets in a week. The forecasts will be made by Dave. Think of it as a weather report, but only for your personal checking account. Whenever the person’s ‘7 Day Low’ hits the $0 mark, the AI will notify the user to take action.
“We invented this brand new type of balance checking because the current balance won’t tell you if you have a Netflix bill that is due tomorrow or if your rent check will be cashed tonight,” Dave’s CEO, Jason Wilk, said in an interview. Wilk is currently working with the billionaire Mark Cuban on a different company as well.
When Mark Cuban was asked for the reasons why he invested on Dave, he said that he got so crushed by the overdraft fees he received in his 20s.
“If you want to be successful, you should cut down all the useless expenses you have and save money. Bank’s overdraft fees are in all sense useless.”
If a person’s ‘7 Day Low’ becomes negative, the AI will offer a truly unique borrowing capability. With this feature, the founders are hopeful that the banks will finally turn their head. In the app, the users will be able to advance as much as $250 with their upcoming paycheck. However, the advance will only be used to get the balance back into position. The ultimate goal of Dave is to keep a user safe until the next payment. Dave does not charge interest. Instead, it lets its users decide on what’s fair to pay. The app will give you the option to donate to the company.
The founders of Dave also plan to plant trees. They have a partnership with Trees.org. For every percentage a particular user decides to donate to the app, a tree will be planted.
According to a beta tester of the app, it is always a good idea to outsmart overdraft fees. The charitable component is also something to love as the app won’t force you to make a payment. Dave is expected to make a huge impact on the banking industry.
