Mercury and other fintechs serving startups are seeing demand spike. But can they hold on to the new customers?
Meow, a New York startup that lets companies earn interest on their cash through U.S. government bonds, has been seeing “hundreds of millions [of dollars] in daily demand” over the past week, the company. Arc, which lets software companies sell their future revenue streams in exchange for upfront cash, has seen “500 startups apply for a combined total of more than $150 million in payroll financing since Thursday,” says CEO Don Muir.
Of course, nearly all digital banks aren’t technically banks with bank charters and FDIC insurance–instead they partner with traditional banks that hold customers’ deposits in insured accounts. Here Akhund acted fast too; on Monday, Mercury began offering up to $3 million in FDIC insurance coverage, up from $1 million last week.
Other fintechs like Brex also offer more than $2 million in FDIC coverage through the same setup–by chopping up deposits and sending them to multiple banks.
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