Savvy cash offering to boost money management

Booster's latest innovative offering is designed to help investors, however it won't make any money for the company.

Wednesday, November 22nd 2023, 8:58AM

Booster Savvy has been in the making for more than two years now and has now been released to investors.

It's innovative and there is nothing like it in the market making it impossible to pigeonhole. It's a MasterCard debit card which earns interest as it is linked to a cash fund. Plus it has a number of features to help users better manage their money and put additional funds into investment accounts such as KiwiSaver.

Booster managing director Allan Yeo says Savvy is unique as it is a transaction account that earns interest - something bank accounts do not offer customers.

At launch it is offering a 5% return. "Booster is excited to be offering a more competitive return on every dollar, something different to what Kiwis have typically seen from standard on-call accounts."

The new product provides a better way to manage how New Zealanders spend and save for the here and now, while also earning competitive returns, without penalty.

“With Savvy your money is working harder for you – but is still available.

The debit card is linked to a Booster cash fund. Booster's only fee is a 60 basis point management fee on the fund. Unlike bank accounts earnings made from transactions on the card are funnelled back into the fund.

"Booster adopts a transparent approach with its fixed management fee of 0.60%. And, instead of pocketing earnings from transactions as most banks do, Booster channels these profits back into the fund."

Savvy, Yeo says, is essentially a "virtual branch" of BNZ which is the bank underlying the product.

Savvy is underpinned by an investment account but with a debit card and NZ bank account number, providing customers with access to their money to enable day-to-day payments and transactions, while still making a return.

Yeo says Booster is taking a long term approach to building products like Savvy which help customers.

"We are taking a long term view," he says.

The product is about helping people, rather than making more profit. He goes on to say Savvy will probably not make money for the company.

"If you were to do a cost/benefit analysis this would never get over the line."

He is also critical of banks sitting on around $42 billion sitting in transaction accounts

Within the account customers can create various buckets to manage their money and, if they choose, any money left over at the end of each pay cycle can go into an investment account, including KiwiSaver.

"Booster Savvy is designed to take away the guesswork and help customers spend and save better by providing personalised insights, a way to portion out your money, savings tools and competitive returns. The account is tailored to each customer's needs, forecasting, tracking, and nudging them towards better habits every day,” chief customer officer, Diana Papadopoulos says.

“We saw a gap in the market to offer something that no one else is doing. While technology is creating so many new opportunities, the way we save and spend has stayed the same. With Savvy, we are bringing customers a new and powerful way to manage their money,” Papadopoulos says.

Savvy will be accepted in more than 210 countries and territories, with cardholders able to make purchases everywhere Mastercard Debit is accepted. Booster Savvy is also supported by a trusted financial services partner network, including Banzpay, Moneythor, Apple Pay, and Google Pay, ensuring that customers can feel safe and secure using Booster Savvy.

Ruth Riviere, country manager, New Zealand and Pacific Islands, Mastercard, “We are excited to work alongside a local partner who’s breaking new ground in the personal finance space. At Mastercard we’re all about powering innovation and Savvy will bring an extensive range of new services and tools. Today, people are looking for more from their payment cards. Booster Savvy provides a lot of extra value on both the savings and spending side. That's unique and we believe Kiwis are going to really benefit.”

Tags: Booster Booster Savvy