Loot, the smartphone banking app aimed at helping millennials stay on top of their finances, has finally launched this week and started to open accounts of the 25,000 people on its waiting list.
Started by Ollie Purdue, a 23-year-old Law graduate who was frustrated by the limitations of banking apps, the app works by connecting to prepaid contactless debit Mastercards. Each customer has their own Loot account number and sort code, and the underlying e-banking services and license is provided by major UK issuer Wirecard.
Loot is different from a ‘challenger’ bank because it did not choose to pursue a banking license, instead preferring to keep costs down by working with Wirecard to hold the app’s cash.
In a statement, Loot said:
The Loot philosophy is all about helping customers make optimum use of the money they have by giving them unique visibility and control of their spending and the money they have left. Given the age and typical circumstances of Loot’s younger target audience, it does not currently offer any overdraft or borrowing facility, ensuring that Loot customers avoid the trap of falling into debt.
What the company does offer a more hands-on, detailed control over finances. The app automatically categorises spending into groups such as entertainment and travel and track spending. It also lets you set budget targets, transfer money into the account (free of charge) and the card can be used at all places that accept Mastercards and ATMs.
The app also works abroad by showing the user their balance in local currency and the exchange rates.
“By automatically categorising all of your spending, as it happens, and showing you how much you still have available to spend to stay on budget, Loot puts you totally in control of your money,” said Purdue, the company’s CEO.
During the launch, Loot will be making its way through the 25,000 strong waiting list, sending out invitations to start the process of opening an account.
The app isn’t available for Android users just yet, but the company said that will change “very soon”.
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