With the cost of living crisis causing more and more people to worry about their finances, consumers are turning to fintechs to help them manage their money better.
One solution to the saving conundrum comes from HyperJar, a budgeting app and prepaid debit card that allows you to save and spend your money in different ‘jars’ and practise “budgeting like a boss.”
To tell us more about the app and its features, The Fintech Times spoke to founder and CEO, Mat Megens to discuss exactly how the app helps consumers and explore the idea of social spending.
Tell us more about HyperJar
HyperJar is a consumer app that allows people to spend their money better. We noticed there was a gap in terms of consumer finance. You have banks helping people store their deposits, and then you have a lot of different companies and different fintechs helping you spend your money, but no one really helps you on the budgeting journey. We’ve built HyperJar to help you spend your money well so that you don’t have any regret when you spend it. And if you spend it well, that usually means you have a bit of excess money to ultimately help you live a better life.
We revolve around that simple principle of helping people to spend well, building a visual budgeting app and tools around that concept. HyperJar are trying to incentivise the idea of saving behaviour and motivate it by giving real value. We don’t offer credit, we don’t use credit. We’re trying to give people alternatives to credit via our app. Credit can be a wonderful thing, but it’s also a potentially dangerous thing. So we’re just trying to give people alternatives to credit so they can go through this spending journey and a way that doesn’t get them into debt.
What was the initial inspiration behind founding the company?
I’m from Canada, but I was originally an electrical engineer, so I had a bit of a tech background and worked for startups. I then switched careers to finance, which is what brought me to London. I was working in an area called supply chain finance, helping to provide credit for supply chains. When I worked on the products I became frustrated with the nature of it. I kept thinking that there must be a better way to provide financing in the supply chain. I came up with the initial idea to try and make the supply chain more efficient and bring people’s capital into the equation. That quickly evolved into the realisation that people aren’t being given the tools to accumulate savings. By connecting those two ideas, the budgeting app evolved into what it is today.
Could you explain the idea of “social spending” and what prompted the development of the social aspect of finances?
It wasn’t the initial thought process – it was all about me as a saver wanting to earn more value on my savings. But as we were building the concept and had the idea of visually allocating money into different jars, we thought, what if I share this particular expense with my partner and we need to budget together? Say a husband and wife both used the car and needed to spend from the allocated fuel budget, there needed to be a way for them to be able to share that. So that was the original thought, that for this idea to really work it needs to work for households, whether it’s a couple, a family, flatmates or even just caring for your elderly parents or neighbours who need some help with shopping – like during the Covid lockdowns.
We noticed this massive gap that really aligned with our mission to help people spend better, and once we got the ball rolling we thought of all these different use cases. It was a bit of a lucky accident, but it’s extremely popular and has a lot of potential.
You’re still a relatively new company on the market. What have been some of the challenges involved with both setting up the company initially and now as you develop?
The initial challenge was trying to build this technology. And then when we got there it was all about launching and getting the word out about who we are. Being a startup you have limited funds to try and get that message out. Initially, it was a very slow burn to get that level of credibility, and from there it really skyrocketed with the media attention we were getting. Once that happened, the customers were loving it and we started to get organic reviews and people came to us by word of mouth. We now have people every day signing up to our budgeting app with very little marketing spend – so we’ve overcome that challenge of customer growth.
Another challenge revolves around how we’re trying to incentivize spending. Obviously, we have to have the retail sector as part of that. We spoke to a lot of major retailers and everyone was interested in our mission. However, big companies will have so many projects and priorities on the go, getting them to commit to devoting time and energy to integrate with HyperJar was hard. Getting them to take the risk with the small start-up we were was a challenge. However as we’ve gotten bigger the conversation has changed as we have well-established brands on board. This helps us to speak to the next partner and convince them to join us.
Have you seen an uptake in users onto your platform with the current economic crisis?
As a startup, we’ve been closing funding rounds and trying to manage cash flow. We basically shut down all marketing spend as we were focused on the next version of the problems. But what happened is our consumer numbers have actually grown. We’re having more customers sign up every day all via organic word of mouth and positive reviews. It’s people saying ‘this is really helping me and now I’m able to make money work in a way I never could before.’
A lot of that has happened I think because a year or two ago things were very different. Interest rates were low and the economy was strong, even during Covid. Now it’s the exact opposite and so people are searching for solutions to help them. And it’s only going to keep growing.
You recently released some research on BNPL – tell me more about that
We have this expression called ‘save now, buy later’, and we’ve been using this from the start. This idea revolves around the idea of using accumulated wealth to consume versus using debt to consume. Generally speaking, debt is great for investments in bigger assets, like a car or a house. However, for smaller purchases like clothes or shoes it’s maybe not the best tool. We wanted to give people alternatives.
The research we did was all about the emotional effects of debt and BNPL. For the latter, it’s very easy and takes almost no effort to get into a BNPL arrangement. And following that, you get the item that you bought but there really is a hangover. No one really talks about that hangover and how it can have detrimental effects on some people. We wanted to explore that side of things because we want people to be happy financially secure. The research focused on ways to avoid that feeling while also balancing with the need to consume in today’s world.
It all leads to the idea of financial education, so many people just aren’t equipped to deal with this pressure. Whether that’s pressure to keep up with friends or an influencer or have the next shiniest thing. Then there are also predatory loans that people might be sold and not understand the consequences. There’s a lot of complex financial terminology that people don’t necessarily understand, and you often find elderly or vulnerable people targeted. If people could understand more about healthy financial behaviours and avoid being targeted by these schemes then that’s already a head start. We have a big emphasis on education and we want to make sure that everyone can access it.
What’s next for HyperJar?
In terms of the product, the next big release is around integrating the retailer side into our current budgeting app. We’re going to make it much more seamless, and a big function of that is going to be gifting. We’re going to allow you to give someone a gift voucher for a shop but the way you redeem it is through spending via your HyperJar card. The difference with this gift voucher is that it’s effectively bankruptcy-proof. So if the shop goes into financial trouble, your money is safe and you haven’t lost the value of it. It would all go back to your HyperJar account. We think this is going to be extremely revolutionary as well as help incentivise spending – especially with parents and children.
We also have a big reward engine that’s coming soon. Any type of incentive you can think of that retailers can publish, you will be able to search these via the HyperJar budgeting app and integrate them into managing your money. So for example, a delivery company like Deliveroo could offer a monetary reward for spending with them on a Friday evening. It would be automatically redeemed when you purchase the item. The idea is to try and help people have more money off of all the things they would spend on anyway to try and make sure they have more money in their pocket at the end of the month.
