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How Does Flyp Make Money?

January 02, 2022

by Flyp

We’re glad you asked.

There’s an abundance of companies out there that promise you rainbows and riches without explaining how they do it.

That doesn’t make them sketchy or anything, it’s just…

Okay, you’re right, maybe it is a little sketchy. After all, there’s no such thing as a free lunch, right?

So in order to better understand how Flyp makes money, it’ll be helpful to understand how traditional banks make money. Most people don’t know how banks do what they do.

We want you to have a positive financial journey and get the financial rewards you deserve.

Here’s a brief explainer about how Flyp makes money. Let’s first go over how banks make money.


How Banking Works

Banks earn money in a few ways. More often than not,one way they generate revenue is by charging interest on loans (like mortgages, for example).

This is known as interest income.

Secondly, large banks also make money from asset management (like handling investment portfolios).



And then there’s the third category, the one that hits consumers smack in the face: fee income.

Banks received over a billion dollars in overdraft fees a quarter in 2020. And you know who paid 95% of those fees (a whopping $11.8 billion)? Americans who are financially struggling the most. Black and Hispanic families paid a combined $4.5 billion in overdraft fees in 2020.

According to Jennifer Tescher, CEO of the Financial Health Network, “The data shows those least able to afford [Bank fees] are disproportionately shouldering the costs…contributing to a well-documented and growing financial gap in this country.”

Here’s something even more alarming: These billion-dollar numbers were reported during a pandemic year that saw millions of Americans drastically reduce their overall spending.

We don’t play that game at Flyp. Why? Because it’s your money.

How We Feel About Customer Fees

As a Flyp member, you know how we feel about fees. We’re not fans. They appear as annual account fees, monthly maintenance fees, minimum balances fees, insufficient funds/overdraft fees, and more.

We want you to use your money, find ways to save it, and feel more financially secure.


How Does Flyp Make Money?

Flyp earns revenue from the money merchants pay to process transactions. Here’s a quick crash course in what that means.

Merchants and Your Money

“Merchant” is a centuries-old word that stems from the Latin, “to trade.”

After the French popularized the word “marchaunt,” the English anglicized it and created the same word we use today. Even Shakespeare wrote about a particularly famous merchant in Venice.

Merchants are shopkeepers, but today, they are classified as any type of individual or business that accepts a credit or debit card payment in exchange for goods or services.


Flyp Doesn’t Charge Customers to Use Their Money

For example, let’s say you use your Flyp debit card at a local coffee shop. It’s the middle of Fall and you’re feeling festive, so you splurge on a large pumpkin spice latte that costs $4.99.

When you swipe your Flyp debit card, you’ll pay the asking price of $4.99 plus tax.

Meanwhile, the shop owner (the merchant), will pay an additional fee for processing the payment. A portion of that fee is a source of Flyp’s revenue.

We don’t charge our customers to use their money.

Rather, our money comes straight from the merchant.

If you’re interested in the technicalities of it all, these fees are often called “interchange” fees, and they comprise a very small percentage of what the merchant pays to process your payment.

Keep in mind that whenever you swipe a debit card, the money doesn’t simply transfer from your bank account directly into the merchant’s pocket. Instead, given the rather labyrinthine process of authorization, clearing, and settlement, it can sometimes take several days for the merchant to receive the payment.

So, long story short: every time you swipe your Flyp card, we get paid by the merchant. The more you use your Flyp card, the more capital we can invest in offering innovative services, products, and rewards.

It’s that simple.

You might be asking “how can you build a company on such a small fee?” Because we’re not building a bank!

You won’t see us building a skyscraper with large offices, flying around in private jets, or buying the naming rights for Flyp Memorial Stadium. We are running a lean operation in order to not charge you any fees. All we ask in return is that you help spread the word about Flyp so we don’t have to spend money on advertising. We want you to trust us with your finances so we are treating our customers how we want to be treated.


Let’s Flyp the Script

It’s unfortunate, but it’s a reality. And it’s time for Americans to make a change.

That’s why we’ve followed through on our founding mission: no hidden fees, no fees to access your money in-network, and we will help our customers cover shortfalls by providing free overdraft protection of up to $100.

We get it: life happens and sometimes you need a cushion.

Ready to flyp the script?

Join the waitlist now to become part of the solution!


Flyp is not a bank. Banking services provided by Sutton Bank, Member FDIC.