Charlie launches mobile app that ‘gamifies’ deleveraging – TechCrunch
Charly, a personal finance app that started as a chatbot, is relaunching today with a revamped experience focused on the larger goal of helping everyday Americans get out of debt. Charlie does this by presenting users with a complete picture of their current debt and how long it will take them to pay it off. Users then connect their bank account to Charlie for one-on-one help lowering their bills. It also “gamifies” savings to make the process of setting aside money to pay off debt more fun.
According to Charlie CEO Ilian Georgiev, the idea of turning savings into more of a game was born from his previous experience in the mobile gaming industry. At a company called Pocket Gems, he helped scale apps that generated millions of dollars in revenue growth from millions of users.
“A really well-designed mobile game has people obsessively running a virtual economy,” he explains. “And what I was interested in was how do you get people to do better in the real world economy using the same kind of tools?”
To help on that front, Charlie’s team includes people with a background not only in computer science and engineering, but also in psychology. By using psychological tricks similar to those found in games – rules, progress bars and reward mechanisms – the app helps its users save money.
The original version of the Charlie app, launched in 2016, worked a little differently, however. It would analyze transaction data to find areas where the user could improve their finances. It also worked via text and through Facebook Messenger – the platforms Charlie adopted with the idea that users needed an easier way to connect to their finances.
“But what we kept hearing, both qualitatively and quantitatively, was that our users’ biggest concern was, ‘How can I get out of debt?’ So we said, instead of combing this very wide net… let’s laser focus on this particular problem,” says Georgiev.
Today, the chatbot is still a feature of the new Charlie app, but it’s not the core experience.
Instead, users start by providing the app with information about their debt. Georgiev points out that many Americans often know their debt down to the penny — whether it’s how much they have left on student loans, how much they have left on their car, how much credit card debt they have left. they have, etc.
The app then calculates how long it would take to pay off that debt if you only made minimum payments. This figure helps people take action, as they will often find that they will be in debt for another 40 or 50 years.
“For most users, it’s an eye opener because they’ve never seen these numbers before, and the calculations needed – even if you’re doing it in Excel – the calculations needed to figure this out are beyond most people,” says Georgiev.
The app then encourages users to learn how they can reduce the time it would take to get out of debt by paying more than the minimum. With the click of a button, they can visualize what happens if you pay, say, $20 or $50 more per month.
The last step is to help users find that extra money. Part of this may come from savings that the app locates on behalf of users. But it also comes from the “game” which saves money.
Charlie helps users create auto-backup rules that, when applied, automatically transfer money from the user’s connected bank account to Charlie’s digital wallet (an account held at partner bank, Evolve). These can be fun or even ridiculous rules. For example, you could create “guilty pleasures” rules where Charlie will set aside 10% each time you eat at McDonalds, or it could save you $1 each time a contestant on “The Bachelor” says that he is “here for the right reasons.”
When these rules apply, money is saved and a small progress bar fills up. The app rewards you with rainbow confetti as you complete your achievements, also similar to some mobile game experiences.
At the end of the month, the user can use this saved money to make a larger payment on their debt. Currently, Charlie does not manage the bill payment aspects himself, which is a limitation. You must transfer the funds to your bank. But a bill-pay feature should arrive in a few months, we’re told.
Later this year, Charlie plans to offer debt refinancing services to users. In this case, the team believes they can offer users lower interest rates because Charlie users will have proven through their use of the app that they are lower risk.
Further down the road, Charlie aims to move further into neobank territory by issuing a debit card to users that works with the users’ Charlie account. To differentiate itself from the growing number of neobanks, Charlie will continue to focus on debt repayment and savings.
Today, Charlie charges a subscription fee of $4.99 a month, which the company aims to make up for by helping people reduce larger debt loads faster. However, even this small amount might give cash-sensitive users pause, despite Charlie’s perks and successes.
To date, Charlie has registered half a million users for his old chatbot experience. He now hopes to grow that number with his new tools.