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Why This Personal Finance App Essentially Turns Your Credit Card Into A Debit Card


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Liran Amrany had spent nearly a decade at JP Morgan and several years working with hedge funds before the urge to do something different overtook him. After an entire career in high finance, he thought he’d go work for a foundation.

But when two friends told him in the span of one week in 2014 that they were abandoning their credit cards in favor of debit cards, Amarany was stumped into curiosity.

“That made no sense to me. So I thought I’d, one, try to convince them otherwise. And when they didn’t listen to me, then I tried to really understand what’s going on here. Why would you do this? Why would you give up hundreds or thousands of dollars a year in rewards to have money come out of your account sooner?”

The more he looked around, the more he realized it wasn’t just his two friends.

“Half the country is using debit cards. And it’s all for the same reason: it comes down to peace of mind. Having an outstanding balance gives people anxiety.”

And with that, he founed Debitize, a startup that pays your credit card bills for you, allowing you to keep the rewards without having to worry about paying monthly bills. In other words, it turns your credit card into a debit card. And it does it for free.

Benzinga caught up with Amrany to ask him about Debitize, and how he went from Wall Street to Silicon Alley.

You don’t have a background in entrepreneurship. How did you know what to do when starting a company?

Amrany: I didn’t initially for sure. If I could redo everything now, I probably could have gotten to where we are in half the time. Everybody who comes from finance and asks me about starting a company, I try to tell them ‘Don’t just do it. Go work for another startup for a year beforehand.’

Founder and CEO Liran AmranyFounder and CEO Liran Amrany

There’s two things that put you at a disadvantage if you do it the way I did. The first is you don’t have a network. I was looking for a cofounder and it took me a long time, like 3-4 months...that didn’t work out and I ended up finding my current co-founder Jeff eight months after that. So I spent a lot of time just building a network, going to a ton of meetups.

The good thing about the other side, in terms of how to actually build a startup, the good thing is there’s a ton of content online right now. I went through something called Startup Leadership Program which was extremely helpful. You can spend months just online finding all these rabbit holes. There’s so much good content online.

How exactly does Debitize work?

Amrany: We’re a personal finance app available on iOS or the web. You link your existing checking account and credit cards, and we effectively turn that credit card into a debit card. So every time you make a purchase with that credit card, we automatically take it out of your checking account the next day so you don’t have to worry about keeping track of an outstanding balance or paying your bills—because before your bill comes due, we’ll have already paid it for you.

Because you’re using a credit card you’re earning rewards, you’re building better credit, you’re getting better security and fraud protection, but because the money is coming out of your account the next day, it’s easier to stay on top of your budget and hold yourself accountable.

When you tell people about Debitize, what’s the biggest question they ask about it?

Amrany: I think people recognize the value in rewards that they’re missing out on, so it depends on who you’re asking. I get that question tons of times from people in my boat, which is someone who’s worked in finance for 10 years: "I have my bills on autopay. Why should I use you?"

They’re not our target use case. They don’t empathize with the people who are living paycheck to paycheck or are much more budget-conscious. For the people who are in our wheelhouse, the questions tend to be around security and timing of payments.

What have you learned about your customers, the people in Debitize’s wheelhouse, and their behavior?

Amrany: One of the things we’ve learned is, we initially thought this was going to be a ‘Set it and forget it’ type of product. And we realized that people want the daily reminders. They want to know exactly how much they’re spending, so we send them a daily notification every morning that says ‘Here’s how much we’ve withdrawn, you spent this much at merchants’ and they love that.

The other thing is, credit card companies obfuscate how credit cards work. There’s a ton of fine print. But I am surprised that even some of what I thought were simpler aspects of credit cards, that a lot of people don’t understand how they work. They don’t understand how interest is calculated or when, they don’t understand the difference between current balance and statement balance. That certainly doesn’t apply to all of our users, but I think the frequency with which we’ve seen those types of questions has been a little bit surprising to me.

How do you feel about where Debitize as a product is right now?

Amrany: There’s definitely a lot of product improvements we want to do to the current product over the next 3-6 months. Once that’s in a better place and we have an Android app, the next step for us is to expand to beyond just credit cards. They’re already asking us, but we want to help our users pay off their student loans, their mortgage, their utility bills, all that.

What do you think is the biggest challenge facing consumers today when it comes to personal finance?

Amrany: I don’t think they should be using debit cards, that’s part of the reason why I started the company. My hope is with Debitize, people don’t need to worry about using a credit card; I think people have a lot of fear and anxiety around credit cards and we’re trying to do away with that.

I think the biggest problem generally is lack of action. There’s a lot of education out there...if you want to understand how to be good at money you can educate yourself on that. The information is out there, but it’s really hard to get people to take action.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.





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