Instacash - MoneyLion's wage access product

Problem statement:

The active percentage of Instacash's user base has stagnated at ~40%. In other words, of all recent Instacash users, only 40% are still actively using it.

Background:

Instacash is a wage access product allowing users to access a portion of their pay 14 days before payday.

Money is credited to the user's bank account (3-5 days) or MoneyLion's Roarmoney account (1-2 days) as per the user's choice. It can be credited instantly for a nominal fee—also called turbo fees; fees are slightly higher to credit to a bank account.

Instead of a traditional credit check, the app reviews transactions in the user's salary account before dispersing the amount.

On payday, money is debited automatically from the user's bank account. If money is unavailable, a late fee charge may apply, though no late fee chart is available in the public domain.

The paid version of the app, MoneyLion Plus, includes Roarinvest, which manages the user's investment portfolio.

Analysis:

Use case 1: get to their next month's salary first

Increase the Instacash limit and allow users to use Instacash to invest in Roarinvest - either one-time or recurring. Quite similar to SIPs, but MoneyLion gets to the user before others; 14 days earlier.

User A doesn't hold a MoneyLion app and receives $1000 on payday. Pays a total of $500 for debt and recurring expenses like educational loans and home rent. Reluctant to invest a portion of the remaining because unsure about upcoming expenses.

User B holds a MoneyLion app and receives $1000 on payday. 14 days before payday, $200 posted to Roarinvest from Instacash. On payday, $200 deducted from salary account to repay the Instacash loan. Pays a total of $500 for debt and recurring expenses, leaving $300 for the rest of the month. Spends it freely, knowing full well that all obligations are met and that Instacash is ready to lend a helping hand if more expenses arise.

Users get 14 days of returns even without paying any money upfront. Jackpot.

Moneylion's Roarinvest holds the cash, hence the flexibility to increase limits. Users who default could be locked out from withdrawing the investment portfolio. No stress.

Data points:

1. Proportion of users with balance in their salary account, yet pausing SIPs because of potential expenses. Greater than 0 is an opportunity.

Use case 2: Instacash for e-commerce transactions

Allow users to purchase products on e-commerce platforms using Instacash.

User A is interested in buying a product from a third-party e-commerce site but is low on cash. Considers using the MoneyLion app, but realizes there is a need to open the MoneyLion app and add money to Roarmoney via Instacash to make the purchase; too much friction, so ends up using the Amazon pay later-like option available on the e-commerce website.

Expenses happen spontaneously; it's unplanned, so be there to make the most of it.

Data points:

1. Proportion of users utilizing the Instacash amount soon after it’s credited to their account. Higher implies impulse needs.

Use case 3: grow Roarmoney base

Instacash is a "bait on the hook to catch the fish." Instacash is the bait. Roarmoney account is the hook.

Continue marketing Instacash to ensure more users give it a try.

Roarmoney account holders get better Instacash rates and provinces, so ideal from a user's perspective to enroll for it. What could stop them? Lengthy process, information disparity.

Instacash process could be lengthy with all details diligently captured. However, the Roarmoney account creation process needs to be quick. On the last screen of the Instacash process, provide a single-click option to create a MoneyLion account alongside details of what they would miss out on if they choose not to.

Once they are onboard, they are susceptible to moving portions of their business from other banks to MoneyLion. Banking in MoneyLion app is more intuitive - UI and systems. Just need to let them see it.

Instant cash loaners are a small chunk. Pie is bigger.

60% inactive Instacash user base is less concerning if Roarmoney account holders constitute a higher percentage of it.

Data points:

1. Proportion of Roarmoney account holders amongst the Instacash users for the years in question.