If you ask 100 people if it is important to invest or not, 90 of them will answer positively. But, if you ask the same 100 people whether they invest or not, the number of positive responses will fall gradually. Most of the time, the reason is that people can’t afford to cut a significant sum out of their salary to invest.
So, micro-investment is not a new but beneficial concept to solve this omnipresent problem. Instead of investing a massive amount in one go, the micro-investment allows you to invest penny amounts more frequently. You can set the frequency and amount criteria per your preferences, and the amount will continue to be deducted accordingly and get invested in your chosen option.
What is a Micro Investment app?
Having known about the concept of Micro-investment, the app is nothing but a medium to get engaged in the concept. The app tracks users’ spending and simply takes the amount out of the account to invest it in the preferred source of the user. The app doesn’t bother users to perform the whole process manually. So, the core role of the app remains to make the investment without letting the user know or do anything about it.
Micro-Investing Apps: The Business Model
Undoubtedly, an app requires financial resources to keep itself updated and equipped the new features. So, micro investment apps follow different business models to ensure an income stream for themselves. Below are some of the business model which is used by most fintech apps:
1. Subscription Charges
Most of the time, the app simply implements a subscription fee for the users to keep using the service. Investment is a long-term process; thus, the monthly, quarterly, or annual subscription charges put good revenue in the pocket of the app admin. However, you must ensure that the app introduces timely updates and new features to keep the users engaged.
2. Data Sharing Technique
It might discomfort a lot of users, but it is true that many apps and platforms make money by selling the data of their users. When a micro-investment app tracks the spending habits of its users, they easily get to know a lot about its customers. They share this insight with other firms to help them sell their products to the users. In exchange, a good commission is gained by the customers.
3. Selling the Products
The micro-investment apps with good investment potential and a product range use users’ data to sell their products. Here, they might be charging a subscription cost as well. So, the user on these platforms helps secure multiple revenue sources for the platform.
Convert Your App Idea Into Reality
Let’s Build A New App Together
Types of Working Principles in A Micro Investing App
To be simple, Micro Investment apps make investment a part of your daily habits. It helps you engage in savings and investments without bothering about the same. There are mainly three working principles that a Micro Investment app follows.
In the first working principle, the app or platform invests the change amount deducted in small day-to-day payments. For example, if you purchase some groceries and the bill is $12.65, the app will round it up to $13. Here, the change of $0.35 will be invested in your selected source.
The other working principle is more uniform. Under this functionality, the app or platform deducts a certain amount (commanded by you) from your account in a constant period which can be daily, weekly, monthly, quarterly, or annually, and invests it in the selected investment bucket.
The third one is trigger-based apps and platforms. This customization will trigger an investment whenever your spending exceeds or touches a certain amount. For example, you can command that whenever spending more than $100 is observed, $10 should be invested automatically. So, whether you pay less or more, your savings will increase.
Features of Micro Investment App
Fintech apps can never be simple as users expect a smooth experience and more usability, both at the same time. Plenty of fintech apps are in the market, making it hard for each other to grab the target audience. So, features are the weapons to fight the competition. Some of the features which are fundamental to a Micro Investing app are-
|Personal Accounts||Every app has a personal account feature where users can track and manage their investments and portfolio. The account is accessed with an ID and password.|
|Multi-Currency Account||The feature is currently rare and limited. Some apps offer to save and invest in multiple cryptocurrencies, which helps to engage even more users.|
|Transaction Management||The app should carry the feature to manage all the transactions in the app only. It might include changing the investment amount, pausing an investment, changing the frequency of investment, etc.|
|Cryptocurrency Trading||Besides the stock market and mutual funds, cryptocurrency has recently attracted users. So, many micro-investment apps make cryptocurrency trading available for users.|
|Kyc and Aml Integration||The app secures the investment and trading transactions with KYC (Know Your Customer) process and AML (Anti Money Laundering) while ensuring a smooth user experience.|
|Analytics Dashboard||The user needs to analyze the different investment options to make the decision. So, the Micro Investing app shows this information within to make it easier for users.|
|Automated Counselors||Based on your spending and investment habits, some apps offer the automated counselor feature in which a bot will provide you with the basic suggestions for taking your investment a step above.|
|Investment Calculator||Almost every investment app carries a calculator that assists users in performing the necessary calculation to achieve a particular financial goal.|
|24*7 Assistance||Leading apps in the industry provide 24*7 support with a chatbot, calling back option, or hiring a support team that works round the clock.|
|Real Time Alerts||To transfigure the anonymous micro-investing, apps provide real time alerts regarding the stock market and crypto market updates. It helps users to invest a more enormous amount when the price drops.|
|Bank Integration||It’s all about finance management which makes bank integration a core feature. The app should be able to connect and work with all the central banks to enlarge their target audience landscape.|
Best Example of Micro Investment App
Some of the best apps which have taken the experience of investment to the next level are:
With over 10 million downloads on Google Play Store, Robinhood rules the micro-investing market. Since the day of its foundation, the app has been making the investment experience smoother for people. The app doesn’t charge any fee for opening the account or moving the funds from bank to app and vice-versa. You can invest in different investment options like stocks, cryptocurrencies, and ETFs without any commission fee.
Acorns is nothing less than Robinhood when it comes to investment options and features. The app has a download digit of 5 million on the Google Play store. It allows you to invest either way. You can invest manually by entering the amount and details of your bank account. On the other hand, you can link your debit or credit card to ensure the round-up investment. The charging criteria in this app are also very minimal, which will not hinder your saving or investment decision.
3. Stash Invest
The platform allows you to choose from more than 3000 individual stocks, ETFs, bonds, and crypto. To start with investing on Stash Invest, the user needs as little as $1. The app offers many other financial services, making it a multi-purpose platform. The app has been downloaded by over 10 million users and is also available for iOS users.
APIs To Develop an Investment Mobile App
Developers can install the feature, but APIs (Application Programming Interfaces) pour the functionality into those features. Some of the basic APIs that make a micro-investing app functional include-
- Plaid API that helps the fintech apps to connect with the respective banks.
- Alpaca Stock Trading API helps to take care of regulatory complexities and investment accounts.
- Several APIs, such as Alpha Vantage, Financial News, Bloomberg Market, Zirra, Xignite, and Yahoo Finance, help real-time stock quotes, commodities, indices, currencies, commodities, etc.
- E*TRADE helps manage user account data, search for exchanges, retrieve option chains, manage orders, and get quotes.
- Finbox and Tradier to get stock metrics and research functionality.
Also Read : Guide To API Development: How To Build An API?EmizenTech
Benefits of Micro-Investing App
The micro-investment apps serve a lot of benefits to users without hanging any sword on their necks. The interpretation for some of these benefits are-
1. Fosters the Investment Habit
Taking a big pie out of your paycheck for investment might not be affordable and convenient. So, the micro-investing app Slice this pie into small pieces to make it more affordable. It fosters investment habits in your daily activities. These small pieces add up to make a handsome investment without bothering you.
You don’t have to sit every time to invest money. The app takes the amount out and invests it automatically without you even knowing about it. So, it makes the investment more convenient for you than manual investment platforms and apps.
3. Ease of Investment
Users without any significant prior knowledge of market and investing can also start their investment journey with micro-investing. The platform invests the money in a diversified portfolio, decreasing the risk and securing a reasonable interest.
While most investment platforms ask for hundreds of dollars from you, micro-investing apps ask just for a few pennies. You will invest even while spending $5 at your local grocery store. So, it makes investment significantly affordable to you.
5. Less Formalities
The app doesn’t require you to fill the long forums to get started and invest. Despite the smooth and quick response, the app ensures complete security for your assets which is one of the most significant advantages of micro-investing apps.
6. Low Fees and Charges
You must have observed in the previous section that most of the leading apps in the category charge a very minimal fee for their services. So, it is very cost-efficient to start with micro-investment.
Monetization Models of Micro-Investing Apps
Undoubtedly, every app is meant to make money, and the apps use numerous models to monetize their facilities. Some of the most used monetization models are-
Giving space to digital advertising has always been the core monetization practice for apps and websites. When an app attracts many users, the ad providers offer a great deal that puts a handsome amount of money in the app owner’s pocket.
While basic features are kept free to use for users, apps offer premium features for a certain fee. The premium features are meant to enhance the investment experience of users by different means. At the same time, the freemium charges bring good income to the app.
Instead of charging for specific features, many apps follow the subscription model. Under this model charges users a specific amount to use the facility. The subscription plans are weekly, monthly, quarterly, and annually.
4. Affiliate Program
The affiliate program is more like the advertising model; however the payment principle differs. In the affiliate program, you will represent the client’s services on your page with a link. Clients will pay you for the leads they gain through the link on your page. So, this principle is more like a commission-based monetization model.
Cost of Developing a Micro-Investment App
Like every other business, developing an app also demands investment. Again like other businesses, you decide the amount of investment. The cost of developing an app is never fixed but is highly variable. You can get your app developed for a few thousand dollars and a few hundred thousand dollars. The cost depends mainly on the following factors-
- Number of features you want to see in the app,
- Type of features you want to install,
- Developers take time to develop the app,
- The market you are hiring the developers from,
- The platform you are launching the app on,
- Tech stack used for the application,
- Changes you seek at different stages, etc.
How Can Emizentech Help You?
People’s concern toward investing is increasing significantly. For example, 59.1 million people owned cryptocurrencies in the year 2021 in America alone. Moreover, it has been estimated that the cryptocurrency market will be thrice more than it is now by 2030 by hitting the valuation of $5 billion.
In this burgeoning craze of investment, it is a good idea to have an app offering similar services. So, Emizentech helps you to step into this digital business journey with its team of innovative and experienced developers. Emizentech has been operating in the market for a decade and has developed numerous Fintech apps for its clients.
As we have already worked on such projects, we know about the challenges and mitigations. So, we ensure that your project is completed on time at the defined cost only without bothering you about this at the later stages.
Gen Z is aware of the significance of investing but cannot cut a considerable amount out of their paycheck for investment. The micro-investing concept arrives as a solution in this landscape that helps them invest small amounts more frequently rather than enormous amounts in one go. The concept has gained momentum since its introduction, and platforms providing this service have already attracted millions of users.
So, besides earning with investment returns, the concept itself is an ample business opportunity. Developing an app focused on micro-investment services can be a great way of securing space at this early stage. With different monetization models, the app can quickly bring a handsome income to you without putting in significant effort and giving much time.
You can contact us to discuss your idea about the same and get the proper guidance. Emizentech treats you as a partner more than a client.
Frequently Asked Questions (FAQs)
Micro-investing apps are easy and affordable to invest often. Anyone can invest in these apps and start with just $5, and some platforms even provide a starting cost as low as $0.01.
If you have budget-restricted or flexible investment goals. The micro-investing apps can help you get a push to start. It allows you to invest and easily save in small amounts. The apps also provide additional features to make your experience more interesting.