A new artificial intelligence–based app Dave, launched Tuesday (April 25) aiming to save consumers for costly overdraft fees.
According to a report in TechCrunch, users give Dave access to their checking accounts, and the app’s machine learning algorithms analyzes a user’s spending data so they can be warned about pending transactions that may cause an overdraft fee, such as a monthly subscription or a restaurant bill in which the tip will create an overdraft fee. The app, which is only available in the U.S., also predicts a seven-day low or the lowest the app thinks the balance should fall to in the next seven days to prevent an overdraft situation. In an interview with TechCrunch, Dave’s cofounder, Jason Wilk, said the goal of the app is to have people avoid overdraft fees and likened the app to a weather forecast but for managing money.
In addition to helping users keep track of overdraft fees, the app includes a payday loan feature that enables users to borrow as much as $250 in advance of their paycheck if the account dips into a negative balance. Dave’s payday loans have zero percent interest, which is a stark difference compared to other current payday lenders, which often charge high interest rates.
“We’re not even tying this to a timeframe, unlike the payday loan. All we’re saying to users is pay us back whenever you have the estimated income come it,” Wilk said in the interview. In order for Dave’s founders to make money, the free app will periodically ask users for a donation, which is completely voluntary. How much of a tip or donation the user provides is also up to them. Dave is partnering with Trees for the Future, and for every percentage a user tips, Dave’s founders will plant the equal amount of trees. For example, tip 3 percent, and three trees will be planted, noted the report.