Financial Times reported recently about an increasing trend for free trading apps. For investors who want to deal with share market, a few commission free trading services have come into the market which lets them do for free. These free apps are shaking the investment market with free trading options, as the already established brokers cost hundreds of dollars to investor’s bills each year. But even free trading is not entirely free. These services need revenue to be a functional state and to do so they rely on a huge number of customers signing up to make some money.
Due to new trends in investments and fragile condition of the industry, the investment platforms are reconsidering the flat fees they charge for every transaction. These fees are difficult for users to compare as they find it “complex”. These apps use a freemium model, where customers can use a limited set of features free of cost, and if they want to use the premium features, they have to subscribe. It claims that almost 50% of users prefer to subscribe.
Revolut is a financial app that offers a freemium trading service to its 4.7m customers. The company allows customers to send or transfer money for free using a pre-paid card and digital wallet. It has 3 subscription models – free, premium and metal. Each has different monthly trade fee.
The main drawback of such free apps is their limitation. These offer fewer resources to investors than traditional platforms. These apps are collecting funds through crowdfunding and will tap investors again this year. Free trading apps are popular but such apps need to turn popularity into profit. The average age of Revolut customer is 34 and 42 percent of these are female. Free apps surely give a platform for younger investors to invest but more experienced and big players would prefer the old traditional way of trading shares.