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Comment by Shank | Hacker News Reader

What bank does the LLC version use?

https://www.azlo.com/

Interesting! I like their pitch.

Azlo.com looks nice. I got fed up with Silicon Valley Bank (awful) a few years back and switched to Capital One Spark Business[1] which is great. However they have "temporary" halted new signups which makes me a bit nervous about their long-term plans.

[1] https://www.capitalone.com/small-business-bank/

This is in no way a criticism of anything and isn't directed at Stripe or any employee, just an honest question to the general HN community: How does Azlo make money?

If I'm going to trust my accounts anywhere, I like to know at least something about their business operations. Azlo is completely fee-free according to their FAQ. They also say they require zero minimum balance and have no ATM fees at 55,000 partner ATMs nationwide. That raises some serious red flags to me. Either they make money from fees or they make money on the interest of your minimum balance, but somehow they have to make money. Of course they're low overhead with no branches and no owned ATMs, but they're not cost-less.

What's the catch? Are they going out of business when the VC/Partner money dries up, or are they aiming to get you hooked and then jack up fees afterwards or what's the deal?

I’d always thought that a bank’s primary revenue source was from loans. Banks are able to actually write more loans (and charge interest) than cash in the bank [0]. Profit ensues.

[0] https://en.m.wikipedia.org/wiki/Fractional-reserve_banking

That's something I forgot to stick in there: it looks like Azlo doesn't do loans either. There is literally no way for them to make any sort of money being fee-free, not offering loans or credit cards, and not having minimum balances. It's all the good will of BBVA, which we know how far the good will of a major bank gets you.

They don't need to write their own loans. They can just open an interest-bearing account with a bank that does and park the money there.

dont forget about interchange fees. every time you use your Azlo Visa, bank gets paid.

https://en.wikipedia.org/wiki/Interchange_fee

and

https://en.wikipedia.org/wiki/Interchange_fee#/media/File:Ga...

They don't make money on the interest on the minimum balance, they make money on the total balance. True, for some customers this will be very low or zero. But as long as some of the companies they work with have money in their accounts (not an unlikely state of affairs), they can make their money from those accounts.

As long as they've set up their underlying tech stack such that the marginal cost of an extra account is nearly zero, then offering accounts with no fees or minimum balances is useful way of attracting customers, many of whom will grow into good sources of revenue.

Hi @freehunter, as a fellow skeptic, I can appreciate your question as to how Azlo makes money if there are no fees. As an executive of Azlo, I can tell you that there are many ways Azlo can and will make money without having to charge fees. Some have been mentioned here (interchange and deposits) and some are coming down the pipe (lending, international payments, etc). Many accounts will be lost leaders in that their deposits and their activity do not give us any substantial revenue. But having LLCs and C-Corps (who tend to have larger balances and do more transactions) will make it very worthwhile. Rest assured that the banking fees you are used to with other banks are not and will not be there with Azlo.

Also, we are a banking platform built for developers. Tech-savvy customers will have access to their accounts through our recently announced API portal https://www.azlo.com/tech/ (scroll down to 'Coming soon')

Hope you give us a shot and provide feedback for our API beta!

Perfect, thanks! I don't mean to criticize, I just want to make sure that my bank will be able to survive and won't unexpectedly shut down. Thanks for the clarification!

We didn't take it as a criticism at all! I love that people other than us, think about these sorts of things. It was a perfectly valid question and one that everyone should know the answer to so that doubt and/or fear are not part of your decision to join our community.

If you are in the market, I hope you check us out. If you aren't, tell your friends!

It appears that azlo is just a front-end reseller of banking services provided by "BBVA Compass."

They probably make a lot of money on transaction fees (charging merchants when you use your debit card) and loaning your money to other customers at interest.

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