How to Develop an App Like Dave? Features, Business Model, Cost, and so on

How to Develop an App Like Dave? Features, Business Model, Cost, and so on

“Want to develop a payday loan app like Dave? Here is a complete guide on how to develop an app like Dave.”

An instant cash app like Dave makes it possible for you to take out a small loan from your next paycheck before you receive it. It has proved particularly useful when you have an urgent need for cash, preventing expensive overdraft fees.

A Motley Fool report says that there are over 11 million users of the Dave app. The growing user base of the Dave app perfectly demonstrates the demand for peer-to-peer money lending apps.

The success of an app like Dave is an inspiration for aspiring entrepreneurs and many of them want to replicate it by developing an app similar to Dave.

If you are also inspired by the success of Dave, then this blog is meant for you. Here in this blog, you will have all the information you need to turn your Dave app development vision into reality.

Let’s start with the basics first.

What is a Dave App?

By far the most common use of the Dave app is to provide users advance cash from their paycheck before they receive it in order to cover unexpected expenses such as car repairs, gas bills, medical expenses, etc.

The most common benefit of the Dave app is that it doesn’t ask for interest against the amount borrowed. Rather than interest, the app makes money from its monthly subscription fee.
The repayment policies of the Dave app also keep users first. The users can set the repayment according to the date of the paycheck. If the salary gets delayed, no worries, Dave will make sure that you have enough funds in your bank account before making any deductions to your bank to prevent you from being charged an overdraft fee.

Also, Dave won’t charge any late fee but put all your next request advance cash on hold until you clear the previous debt.

How does the Payday Loan App Like Dave Work?

Dave makes the process of browning the loan from the application a lot simpler. Users need to install the application on their smartphones. Sign in on the application by providing the bank account details. After the successful verification of the details submitted, the user will be able to borrow the amount decided by the application up to $100 per pay period. While withdrawing the loan amount, the users need to pay the subscription fee which is $1 per month.

After the successful disbursement, the user needs to set the repayment date. The users have the option to choose auto-debit or they can set up for manual payback. The users can also decide how much they would like to tip money to Dave app developers.

Why Should You Consider Developing an Instant Cash App Like Dave?

In the wake of the feature of apps like Dave, it might seem profitable to develop an app similar to Dave. In spite of this, it is worth it to gain practical knowledge about your thoughts since it requires a large amount of investment, time, and resources.

Growing Popularity of the Payday Loan App Like Dave Among Millennials and Gen Z

The youth population is more inclined towards the loan day apps. According to an estimation around ⅓ of the young population has student loans. This is the reason why they see the payday loan app as an easy way to get an instant loan to pay their EMI which falls before their paycheck.

According to a report published by Citizen’s Advice 4 out of 10 young people have ever used payday loan applications.

Progressive Market for Payday loan Applications

According to Allied Market Research, the global market for payday loan apps like Dave was valued at $32.48 billion in 2020. During the financial year 2021-2030, the market is expected to grow at a CAGR of 4.2% resulting in a value of $48.68 billion.

Features to Include in Cash Advance App like Dave

1. Registration and Profile Verification

If someone wants to request and receive a payday loan, that is going to be a very effort-taking and time-consuming process. However, your first move should be to jump to sign-up on the application. It connects the user’s account to the app account in order to process the loan. If anyone needs money through the money lending app, then the user has to verify his account on the application during registration.

2. On-Demand Funding

On-Demand means needing the service immediately. When someone needs money to lend but cannot acquire it due to the long procedures by the time; it is a very bad turn-off time for them. Here comes the cash lending apps; where the applications will fund the users immediately in the shortest duration possible. Within just a few simple taps, the users can request money lending and get that instantly.

3. Options for Repayment

People can follow repayment alternatives. It means that whenever the user’s account is credited with any paycheck; the loan amount will be automatically deducted from the deposited amount in the user’s account. It becomes easier for the user also to repay their loan amount, and track their repayments as well.

Also, the users have an option in cash lending apps; is to repay the loan amount sooner than required. If you want to close the lent amount sooner; the users can do that. On the other hand, if the user wants some extra time to pay the amount; then he can raise the invoice to the cash lending app to resolve the problem.

4. Quick Notification

Is your application capable of predicting loan amounts? Is it necessary to warn your users of an impending debt payment? Do you want to warn someone about upcoming expenses? Do you want to learn more about money lending applications?

Have you added a new service to your business? Consumers can acquire all of the necessary information by using the mobile app’s fast alerts. You can also send your consumers real-time notifications if they spend more money than they should.

5. Cards (frozen or unfrozen)

What if one of your customers lost their debit card? Or did you lose it? Or maybe you changed it? In such instances, your company should be able to let customers freeze their old cards and apply for new ones.

This shows that you care about your customers, which increases client happiness. Similarly, if a customer wants to unfreeze one of their frozen cards, the money-lending mobile app should be able to reuse it; otherwise, you risk losing the customer.

6. Loan Calculator

Another distinguishing element of money lending software that you should not neglect is a loan calculator. When the money lending application gives consumers a rough estimate of the amount owed after interest, this function becomes valid.

This encourages people to make more informed decisions. When your company is fully reliant on a long-term loan, this feature appears to be a blessing. It saves you and your team the time and effort required to calculate the loan amount.

7. Grant Tipping (Optional)

There is a voluntary tipping function in your application, in which the application offers a free money loan or very low charges like a $1 monthly membership fee.

8. Credit Score Improvement

Are customers spending more than they can afford to repay? Such situations can be handled using credit score-increasing software. It allows the program to track users’ real-time rent payments and report them to credit bureaus.

Furthermore, they will increase their credit ratings, providing them an advantage in credit-building. Your organization will know how much money it can give in this method.

Keep in mind that the availability of these services differs amongst cash advance apps. Users should undertake considerable research and comparisons before deciding on the app that best meets their specific financial needs and preferences. Furthermore, it is crucial to understand the terms, fees, and privacy policies before utilizing any cash advance app.

How does an App Like Dave make money?

At the end of the day, the ultimate goal of the development of a money app like Dave is to generate revenue. Dave app makes revenue from multiple sources. The following is a quick overview of the business model of apps like Dave:

1. Membership Fee

The major source of revenue for the Dave app is its membership fee. The app charges a $1 membership fee per month from each of its users.

2. Tips from Users

Tips from users are another major source of revenue for the Dave app. Whenever a user borrows money from the app, the app promotes them to pay a tip. The Dave app never forces its users to pay a tip.

3. Interchange Fee

In addition to being an advanced cash app, Dave also offers its users debit cards issued by Mastercard. Whenever the card is used on any platform, Dave receives an interchange fee.

4. Interest on Cash

The amount left unused in the user’s account landed to the institutions on a certain percentage of interest. This is also a good source of revenue for Dave.

Business Model

By all means, the final outcome has to be making money. There is, however, a distinction between earning money by vacating the opposite pocket and earning money by becoming nice with the same pocket. Dave is a very cost-effective program that assists you financially in times of need without penalizing you with interest or costly fees. Without a question, Dave is profitable, which is why it has been in the market for more than a half-decade. However, Dave’s business model is more focused on helping the users and making them feel valued for the money they spend on the service.

1. Membership Fees

Dave makes money by charging $1 on a monthly basis through membership fees. This is a subscription-like fee, which allows Dave to cover its operational and invested fees for the product. This membership charge will be deducted automatically from your bank account. Compared to other fintech start-ups, charging membership and subscription fees is fair among others.

2. Donations

There is another way by which Dave makes money, which is ‘Donations.’ Users can willingly pay the tip to the company whenever they borrow it. Dave plays behavioral psychology, which entices the users to pay a tip. The application plants a partnership with “Trees for the Future.” This way it encourages the users to pay tips.

3. Interchange Fees

There is one Mastercard Debit offered by Dave, which allows to bring good interchange fees to the platform. This fee is basically the percentage of purchase amount, which is paid by the merchant when they receive payment.

4. Internet on Cash

The software lends money from the user’s account to other institutions like banks and professional organizations. Dave charges these institutions 3.35% interest on money lent, which is a valuable source to generate higher revenue for cash advance apps like Dave.

5. Referral Fees

This feature also called “Side Hustle”, which was introduced by Dave became a significant source to generate revenue for the company. It is a type of online marketplace, where the users attract to work in gigs for jobs. The Dave partners offer gig jobs, because of which they have to pay commission or referral fees to Dave whenever the app gets a new worker to work through the application.

Tech Stacks

Parameters Tech-Stacks
Front-End HTML / CSS, Vue.JS, React, JavaScript, jQuery UI, Ember, Angular
Back-End Node.JS, C#, C++, Java, Ruby, PHP, Go
Databases MySQL, MongoDB, Maria DB, Postgre SQL, Berkeley DB, SQLite, SSQL
UX/UI Adobe After Effects, Figma, InVision, Marvell, Sketch, Adobe Photoshop, Adobe Illustrator

How Can You Make Your Dream of Developing a Money App Like Dave a Reality?

The following steps will help you to make your dream of developing a money lending app like Dave a reality:

Set the Primary Goals for the Development of Advance Money Lending App

Start with the basics. Having the mobile app idea is one thing but making it a reality requires a lot of things to be taken care of. The very first thing you have to do is set the primary goal for your money lending. Having a clear picture of your idea will help you decide on the feature that you can build with your app. The best practice is to offer something unique with your mobile app idea instead of creating another copy of Dave money lending app.

Register Your Business

It is mandatory in almost all countries for financial mobile applications to register themselves to the government. There are some guidelines suggested by financial bodies, your app must need to comply with them to ensure its legitimacy.

Choose the Reliable App Development Company

Putting great plans into action requires a great team. The same thing goes with the Dave app development. You need to hire a reliable app development company with previous experience in developing finance-related mobile applications. Also, put the client reviews on the top priority while choosing among all the options of app development companies available to you.

Design and Develop the App

This is the step that requires utmost attention. Make sure all your design and development goals are successfully interpreted by the development company. Keep yourself in the loop with the development process to make sure all your development goals are successfully interpreted into reality.

Testing and Launch

This is the last step in your journey of advanced money lending app development like Dave. Upon the development, test your app on multiple parameters to confirm that it strongly adheres to the needs of users and delivers a flawless experience to them. Once the quality of the mobile app is confirmed, the next step is to launch it.

What will be the Cost of Developing an App like Dave?

Estimating the cost for any kind of mobile app development is not feasible. In the case of the Dave-like app development cost, it depends on the complexity, features, tech stack, team structure, and so on. The essential factor that determines the cost is the location of the app development company you opt to work with.

The effective way to get an estimation of the payday loan app like Dave development is consulting with an app development company. Share your development goals with them and they will provide you with the estimated cost of development that you need to bear.

Final Take

The success of the instant cash app like Dave is not a hidden secret after reading this blog. The demand for payday loan applications is constantly raising and creating a new revenue stream for fintech startups.

If you also want to set your footsteps in the fintech sector, then an app like Dave is the best option for you. All you have to do is walk through the ITfirms list of top application development companies and pick the one that aligns with your development goals.

Frequently Asked Questions

What are the alternatives to the Dave app?

  • Brigit
  • Earnin
  • MoneyLion
  • Branch
  • Even
  • Empower

Where Can I Find a Reliable Mobile App Development Company?

The selection of the mobile app development company is going to put a direct impact on the success of your application. You can consider checking out ITfirm’s list of the top app development companies to choose the best one for your project.