Yahoo Finance has modernized an age-old practice of pooling money and made it available as a mobile app for the modern user. ‘Tanda’, its latest app, puts a twist on the idea of saving money by making it an innovative project that promotes social harmony by allowing complete strangers to pool their money together. To join Tanda, one simply has to open an account, verify their ID, and link it to their bank account. Following this, the user has to create or join a ‘savings circle’ comprising of five to nine participants and choose a ‘payout position’. The app will then automatically process the user’s recurring contributions and payout when their time comes. The app shall make money by taking an 8% cut of the first payout and a 7% cut of the second payout, says Simon Khalaf, VP and head of media brands and products at Oath. The user who takes the last payout position gets a 2% reward. Furthermore, to ensure an honest pooling of money, each user is assigned a ‘Trust Score’ which can be increased over time. A high trust score will allow the user to join saving circles with higher payouts
and a better payout position. They may also gain access to private saving circles. Contrarily, for a delay in contribution, a user loses three points, and 20 points are reduced in case someone misses a contribution altogether. This trust score is the first step to ensure that no single user runs off with payout money. In case a user stops contributing money to the savings circle, Yahoo Finance, besides reducing their trust score, will also start paying in their stead for a while. In extreme situations, Dwolla, the company that verifies users and bank accounts and transfer funds for Tanda, will resort to debt collection. Tanda has included social feeds where “Everyone” shows all public updates like creating or saving circles, joining and leaving circles, and payout updates. The members of a savings circle have been given the provision of communicating with other members of the circle via a chat feature
. If a circle is public, any user can read the messages posted in the chat area, but they can’t post a message themselves unless they are a part of the circle. Tanda has been posed as a financial alternative to credit cards meant to target a younger user base. Through this app, Yahoo Finance intends to make a profit, apart from building a mobile user base. As of now, it stands to see how Tanda fairs in the competition against similar apps like KyePot, ElGameya, and Cashare.
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