Our time is valuable, there’s no questioning that but if you think you think 5 seconds of your day is that valuable, Americans can set up automated direct debits tied to their paycheck through fledgling fintech Douugh (ASX: DOU) and their banking app.
According to Douugh, the process of switching direct debits manually “has a lot of friction” so through their new 1-year partnership with payroll data company Pinwheel, users can assign a recurring direct debit that will send their paycheck to a transaction account with Douugh.
The automation process effectively saves a customer the effort of logging into their banking app, and sending money to another account if they don’t have 5 seconds spare in their day.
To enable this, Douugh will even pay a per-transaction fee to Pinwheel for every customer that engages the 5-second saving feature.
“We are excited about partnering with Pinwheel to be able to make it effortless for US customers to switch their payroll to Douugh,” said Douugh Founder and CEO, Andy Taylor.
“Our efforts to date have been focused around making it easier for people to switch their primary banking relationship to Douugh in order to unlock the platform revenue opportunities.”
In the US, neobanks see a direct deposit of $1,000 per customer each pay cycle so Douugh is hopeful to get a slice of the action where just 1,000 customers doing so would increase cash inflows to the Douugh platform by $26 million.
At the same time, Douugh will be hopeful their prospective US customers can overlook the continued regulatory issues that have plagued Douugh since the fintech listed on the ASX in 2020.
Within months of being listed, Douugh was ordered by Australia’s banking regulator to cease calling themselves a neobank as they did not hold a banking licence to do so.
Shortly after, shares were suspended by ASX when regulators identified public disclosure failures around a Director’s parents being issued pre-IPO shares which were sold for a $252,291 profit as soon as the Company was listed publicly. This came at a time when DOU shares reached an all-time high of $0.18 before crashing down to now be trading around $0.03 per share.
The timing couldn’t have been much worse with it recently revealed that Douugh Founder and CEO Andy Taylor was served court orders last month to repay $2 million to investors from a previously failed startup, Yatango Mobile, in which Taylor was deemed to have misled investors in 2013 and 2014. Taylor plans to appeal the ruling and has stated that those dealings have nothing to do with Douugh.
While things may be doing better for Taylor at Douugh than they did at Yatango Mobile, the fintech company is still facing an uphill battle to acquire customers.
For the half year ended 31 December 2021, Douugh reported $192k in revenue while also reporting a $7.1 million net loss over the same period. With $9m in cash in the bank at the time, the Company secured a $20m equity funding facility last month to ensure they can survive beyond 2022. If the funding is drawn down, it will be paid in DOU shares to US-based investment fund Long State which Douugh claims has been structured to “minimise shareholder dilution”.
Alfred Chan is an Analyst at Emerald Financial, specialising in ASX-listed small cap companies.
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