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Uber has unveiled a new division called Uber Money which will offer its drivers bank accounts along with digital wallets, credit and debit cards, to receive instant payments.
Ride-sharing giant Uber Technologies Inc. plans to foray into the payments and financial services market. Citing a massive opportunity in this sector, Uber announced a new division called Uber Money catering to the company’s debit and credit card offerings along with digital wallet facilities.
Uber Money will first focus on providing services to its fleet of 4 million drivers and couriers across the globe. Peter Hazlehurst, the head of Uber Money said that the drivers will get a mobile bank account to receive instant payments upon completing their drives. Currently, the drivers have to opt for weekly payments or cash out using the Instant Pay feature.
Now with the Uber Debit Account, driver and freelancers offering Uber Eats courier services will have real-time access to their earnings. During a phone interview with CNBC, Hazlehurst said:
“We wanted to help everybody understand that there’s a new part of Uber that’s focused on financial services and that has a mission of giving people access to the type of financial services they were excluded from”.
Growing Competition in the Ride-Sharing Space
Citing rising competition in the ride-sharing space, Uber is creating its financial ecosystem to incentivize drivers and riders. Uber believes that this move will help keep drivers and riders loyal to its platform instead of losing them to its competitors.
Uber will roll-out the Uber Driver app with a built-in digital wallet, in the coming weeks. The company said that the digital wallet will help drivers to “easily track their earning and spending history, manage and move their money, and discover new Uber financial products all in one place”.
Currently, the Uber platform has over 100 million monthly active users. Besides, it also found that most of its customers make payments through credit cards. Introducing the new payment system is likely to remove costs associated with financial middlemen thereby giving a boost to its revenue stream.
The U.S-based drivers can currently sign up for a no-fee debit card. Uber has partnered with a California-based financial technology company called Green Dot that will provide an account linked to this debit card. The company has also put several cashback offers for drivers signing up for this debit card.
Currently, Uber is offering the bank account service only to its registered drivers and courier service providers. However, it is likely to consider bringing these financial services to its millions of riders as well.
“The reality is that the needs of our partners in the U.S. and in Brazil and in Australia and in India mirror in many ways the needs of consumers as well, particularly in the cash-heavy economies. And the opportunity that we have is to expand to help all of those people have access to financial services,” said Hazlehurst.