Innovative Lender Fidor Gives U.S. an Upvote

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Fidor Bank, a branchless, bitcoin-friendly German lender that adjusts a number of its interest rates in line with the number of Facebook “likes” it receives, intends to enter the U.S. with the aid of an as-yet-unnamed American partner.

The online bank lists over 250,000 users and says total assets increased by 33% in 2014, reaching 305 million euros. Based in Munich, Fidor is really a regulated bank, meaning it may be employed in all 28 European Union nations. Yet America offer probably the most promise, based on the bank.

“Even though the U.S. may be the motherland of innovative digital developments, we have seen some striking market opportunities for any consumer-centric banking philosophy and product,” Matthias Kroener, Fidor’s chief executive, said in a January statement concerning the bank’s plans for the American market.

Consumer-centric practices

As along with offering traditional services like checking and savings, Fidor also serves as a peer-to-peer lending platform. Customers can use the bank to make loans among themselves, including interest-free options.

The bank’s Smart Girokonto, or Smart Current Account, lets users buy foreign currency, precious metals and swap cash for digital money like bitcoin.

Fidor prides itself on fostering communities, encouraging users to have interaction together in online forums and chat rooms and thru social networking. The financial institution offers cash incentives to those who respond to finance-related questions resulting from others, share general personal-finance tips and rate financial advisors.

Account holders can also earn cash for creating videos in which they let you know that Fidor’s services work. The bank pays as much as 100 euros for every clip that it uploads to the YouTube account. Fidor limits people to one video monthly.

“We integrate the user and customer in to the growth and development of our service,” Kroener says by email in response to questions about how Fidor operates. “Together with our users and customers, you want to develop a financial service they actually need and want.”

In probably the most innovative of their practices, Fidor sets its overdraft interest rates for Smart Current Account users based partly on the number of Facebook likes the financial institution receives.

Fidor’s expansion

Although Fidor hasn’t revealed which services it plans to offer within the U.S., some reports claim that facilitating bitcoin transactions can be a feature. The bank’s partnership with a German cryptocurrency marketplace called Bitcoin.de lets customers send and receive payments while using virtual money directly to and from their Fidor accounts.

A sometimes-volatile currency that’s been targeted by hackers and scammers, bitcoin remains a subject of much debate. In August 2014, the U.S. Consumer Financial Protection Bureau warned that bitcoin along with other forms of digital money pose risks of “unclear costs, volatile exchange rates, the threat of hacking and scams” and total reduction in the event of theft.

Although certain states like Ny and California will work to develop rules coping with bitcoin, the virtual currency remains unregulated in most of the nation, at least for now. Kroener, however, doesn’t necessarily view increased regulation as a bad thing.

“I do not think that regulation all in all is really a burden,” he says. “We believe that the bitcoin environment needs professional, and in particular, regulated support.”

The takeaway

As Fidor plots its U.S. expansion, Americans may anticipate accessing many of the same innovative, community-style services the online bank provides in Germany and other areas of Europe. And who wouldn’t “like” a lower overdraft charge?

Tony Armstrong is a staff writer covering personal finance for?NerdWallet. Follow him on Twitter @tonystrongarm and on Google+.


Image via iStock.