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  • Jazgul Ismailova

Business Models for PFM apps

With the Payment Service Directive 2 (PSD2) regulations in place, third-party personal finance management apps have enormous potential to enhance customers’ money management. Cashless societies, use of niched financial service providers, information overload, and normalized credit purchases are all factors, which, when combined, raise the need for an easy money management tool. Using personal finance management (PFM) apps, customers can connect their bank accounts and credit cards to provide an overview of their personal finances, create budgets, cancel subscriptions, and other services.



There are several ways that PFM apps generate revenue today.


1. B2B PFM solution for banks or 3rd parties.

Swedish Tink changed its business model from a consumer-facing app to an Open Banking platform for business-to-business (B2B) customers. Initially launched in 2012 and as the most prominent free personal finance app in Sweden, today, Tink serves more than 2500+ banks and institutions.


Miina Technologies is another successful example of a company that changed the business model. Founded in 2016, they began as a consumer app for subscription management (“Mina Tjänster”), and today, they offer subscription management solutions for banks.

Both Swedish Zlantar and Danish Spiir offer free PFM apps at present. Zlantar offers contract management on top of expense tracking and budgeting. Their revenue stream initially originated from a referral fee for switching contracts and subscriptions. However, at present, both Zlantar and Spiir are tapping into the B2B market by offering Open Banking SaaS solutions, including account aggregations, transaction categorization, and agreement management.


One take-away from these journeys is that Open Banking API is a new and lucrative market. These players built time-consuming proprietary infrastructures, and are capitalizing on these infrastructures by offering SaaS business models. Their experiences in serving end-customers and agility are other strengths being leveraged by traditional banks. Tink received the best business model acknowledgment by Cordial in 2019 for tapping into this opportunity.


2. Data mining, native ads, and referral fee

One of the leading free PFM apps in the United States, Mint, has several revenue sources: (1) selling anonymized and aggregated data, (2) advertisement, (3) premium accounts, and (4) referral fees from other financial services. Users appreciate that it is a free app, but customer satisfaction seems to be low with 18% of users giving a score one on Trustpilot.

A new challenger–player in Belgium, Cake, offers a free PFM app, and their revenue stream is data mining, particularly, selling aggregated and anonymized data to B2B commercial partners.


3. Freemium model

United Kingdom (UK)-based PFM apps, Cleo and Emma, both offer a freemium model. The app is free for the majority of users. Besides, they offer premium subscriptions in which extra features are included. Emma app charges GBP 4.99/month for its Emma Pro subscription in the UK while Cleo Plus is £5.99 a month. Customers receive more customization in-app usage, such as changing the number of transactions, adding manual transactions, emojis, and splitting transactions.


4. Premium Subscription Model

Launched in 2019, the US-based Copilot offers only premium subscriptions at $2.99 per month (for a limited time). Their customers appreciate accessing all features, thus avoiding advertisements or worrying about their data. This transparent and straightforward pricing model builds trust among customers in the long-term.

As one of the investors said, “something happens in customers’ minds when they can get a ‘free’ solution to their problem.” Customers are used to getting free financial services and can become furious if fees are applied afterward. This type of reaction provides a lesson that we learned from Dreams’ recent pricing attempt.


The advantage of “FREE” models as mentioned above is the quicker and less expensive customer acquisition costs. Securing traction and a large customer base, companies with freemium models can easier raise capital and grow. Challenges are difficulty in converting free subscriptions into a premium, lower brand trust, and high customer service costs.


We, at Sparla, inspired by Copilot’s transparent pricing model, plan to follow their business model journey. After doing consumer testing, we are assured that setting a fair and transparent price upfront is the best way to secure a viable growth. We are happy that we can offer a pricing model that is in line with our sustainability strategy.

Stay tuned for our pricing strategy and follow us at LinkedIn.


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