The app also lets couples stay on top of money matters in other ways, such as being able to comment on individual transactions and manage bill reminders together — so they can, in the words of co-founder Eugene Park, “be on the same page” about money.
“My co-founder, Thien Tran, and I are pretty passionate about personal finance and helping others develop better financial habits and literacy,” Park tells TechCrunch, explaining how the idea for the app came about.
“When we started this project both [of us] were living with our partners and arguing, from time to time, with our partners about money. And it sort of hit us — with all of these basic tools that are out, there if couples like us can’t get on the same page with money then these tools really don’t matter.”
The target user is typically in the Millennial age-range — with Park noting there are some 32M Millennials now living with a partner. “We believe all of them should be co-managing their money together and certainly co-developing their financial literacy habits together,” he says.
The founders surveyed 600 couples to help spec out the app’s feature set, and the research threw up a few surprises — such as how much demand there was for a bill reminder facility. Sixty per cent of users who sign up to use the app now create at least one bill reminder during the onboarding process, according to Park.
“We were shocked,” he says of this appetite for bill reminders. “We thought, maybe it’s because we live in this Bay Area bubble where everything’s being auto-paid, but why do people want bill reminders?
“[W]e took a deep dive into it and I think the narrative that’s emerging is… 75 per cent of Americans generally are living paycheck to paycheck. And are having to make a very difficult decision of which bill to pay. And for that reason that’s why they’re not autopaying it.”
“The top four banks in this country are charging $6.4BN in bank fees — whether they’re late fees or overdraft fees — and so I have to imagine, I don’t any data to prove this, that that money is coming from some of the most vulnerable parts of our culture,” he continues.
“And so these folks, they’re very sensitive to two things: one is the actual timing of when to pay their bills. And two, their account balances so that they don’t go under certain minimums that result in monthly fees.”
The team also found the most used existing application for couples to manage their finances together is spreadsheets — hence spying an opportunity to build something better.
“If financial literacy is bad in this country, spreadsheet literacy is almost as bad,” says Park. “18 per cent of couples that we surveyed are using spreadsheets. And it was 3x over any other app or service. And so we’re setting out to build a better alternative to these spreadsheets that couples are co-managing.”
“If nothing else we’re automatically updating your balances and activity, whereas a spreadsheet can’t do that,” he adds.
A key friction point the app aims to address is to enable users to choose how much information they share.
“One of the hesitation points that we saw in a lot of the couples was that they didn’t necessary want to argue about the little things,” he explains. “Did you take Uber vs Lyft, The number one argument we read in a study was over frivolous purchases. So a lot of couples said that they want to goal set and plan but they don’t necessarily want to argue about did they make frivolous purchases. So one of the features we allow you to is we allow you to track your account balances but choose what you want to share.
“So you can choose which accounts you want to share, you can choose whether you just want to share the balance only. Or whether you also want to share activity and transactions as well.”
“We looked at… existing tools like Mint.com and others, and they are generally not collaborative in nature,” he adds. “One of the friction points for a lot of couples is choosing what they want to share with each other. Choosing how much of their finances that they want to delegate vs collaborate on.”
The Honeydue app soft launched on iOS in late January and Android in March. They have around 20,000 registered users at this point. The app is currently US-only.
“We skew female, I believe it’s 60 per cent. Which makes us relatively unique relative to other personal finance apps,” he adds.
“What’s interesting is from a generational perspective and a behavioral perspective we’re seeing that Millennials are more likely to co-manage their finances together as opposed to my parents generation, my generation (X).
“So we did a survey of 600 couples and 75% reported that they co-manage some to all of their finances together so that is generally our target market: People that are committed to sharing financial responsibility as well as financial literacy with each other.”
Users are typically using the app to connect and share their bank account balances — which is what the team consideres “our core use-case and our core pitch/value proposition” — although, interestingly, couples still choose not to share information on a portion of their accounts.
“What’s interesting is that approximately 60 per cent of accounts are shared at some level but 40 per cent are not,” notes Park. “And so couples that are signing up for our app are exercising that privacy and autonomy.”
Another “interesting use-case” that’s emerged for the app is a feature called “what’s that charge?” — which lets users query each other about individual transactions.
“What we were noticing is that a lot of couples, before we built this app, they were looking at their bank statements and whenever they saw a transaction that they didn’t recognize they would screenshot it in a mobile app and then they would MMS it to their partners and ask do you recognize this charge? And that loop was regular, was repeatedly regularly and we just thought that was so silly, so we made it easier for partners to identify these transactions and share them or ask their partner what’s that charge?
“So we added a comment section under each transaction as well as a emoticon button. So you can flag transactions, you can express shock to a transaction with your partner or thumbs up support. We’re seeing a good number of couples that are using that on a regular basis, so that’s another common use-case.”
Another feature that’s proving popular aims to help couples who are trying to budget together — by allowing them to see their spending autonomically categorized.
Bill splitting (or “sharing” in the app’s language) is also supported, although Park says this turned out to be less popular than the founders thought it would be, with only around 5 per cent os users making use of it.
There’s no native payment facility within the app itself either — if couples need to settle an IOY between each other Honeydue links out to PayPal or Venmo to do the actual moving of money.
“Once you’re getting into the business of helping people move money then we expose ourselves to another level of scrutiny,” adds Park.
Currently, the app supports integrating with around 9,000 of the biggest banks in the US, via its data provider — which he describes as “pretty broad coverage of the most popular banks”.
“Like other personal finance tools we go through one of three major financial data providers. Generally the way it works is when you enter your credentials, it’s validated with the bank and they provide us with a token and we store that token and with that token we can’t do anything other than look up your balance and your transactions. and keep them up to date.“
In terms of business model, the app is free to use — which does of course bring up the question of how they intend to monetize the visibility they’re gaining into users’ bank accounts and spending habits.
“Essentially we want to help guide our users to better financial products and services that we think will save them money, and we will use your data to help tailor some of these offers to you, without compromising your identity to third parties,” he says, adding: “It’s not at the top of our roadmap but in some point in order to keep it free we’ll start testing that.”
The Y Combinator backed startup is graduating in the accelerator’s summer 2017 cohort, and will be looking to raise seed funding shortly after demo day.