bonsai, a Marqeta partner using open banking and real-time funding tech to help Gen Z and young Millennials cultivate a new approach to money management and financial Mindfullness.
For a nation one-and-a-half times the size of Wales, Belgium certainly punches above its weight on the global stage. It’s renowned the world over for its irresistible chocolate, beer and footballing abilities as well as being home to major global institutions like the EU and International Court of Justice.
It’s also the birthplace of financial services innovator and certified B-Corporation bonsai, a Marqeta partner that’s using open banking and real-time funding tech to help Gen Z and young Millennials ‘cultivate’ a new approach to money management.
To understand what this looks like in practice, Marqeta’s Deanna Fernandez spoke to Koen Vanpraet, bonsai’s CEO. Here’s how our conversation unfolded…
Tell us a bit about how bonsai came about and your mission.
We created bonsai because Belgium is a relatively conservative country and people typically do not have a credit spending attitude. Our society is highly savings based and people tend to spend only what they have in their bank accounts, which comes with pros and cons. One of the challenges that comes with conservative spend is that incentivizing Belgians to spend or support the economy is more of an uphill task, especially during uncertain times. Yet we have learned in the past economies that this can be ignited by consumer behavior. This is quite a contrast to London, where everyone uses contactless payments on a mobile phone and folks spend more easily, both online and in shops.
To help drive a shift in consumer behaviour we have focused on the younger generation - Gen Z and young Millennials, which we see as a catalyst. They want to spend the right amount of money but they also have so many perspectives and there is an opportunity to develop new behaviours. We've been in the market for about two years and are proud to have secured a banking licence from the National Bank of Belgium. While we predominantly focused on the Flemish part of the country, we are now moving into the French-speaking part and a number of other European nations.
So what fintech capabilities are you utilising to offer a unique customer experience to Gen Z and young Millennials?
We’ve developed an app that is supported by the main channels, Apple Pay and Google Pay and it’s very easy to activate. KYC is via the Government’s 'itsme' digital identity tool, which many Belgians use to connect bank accounts, medical files, government files and so on. Using this identification tool takes less than two minutes to connect the bonsai app to your bank accounts.
Users have the opportunity to create a free Mastercard credit card, which is attractive to our young audience because most regular credit cards in Belgium cost anywhere from €15 to €25 per year. bonsai uses open banking to connect to your bank account(s) and relies on itsme’s two-factor authentication. Their bonsai Mastercard is effortlessly linked to their existing bank accounts. Once they have connected their existing bank account(s), all info is consolidated within bonsai. The end result for our users is a central user interface where they can manage budgets, financial commitments and spend. It can also be linked to other functionalities based around incentives such as loyalty offers sustainability initiatives, and cost-splitting features for groups.
And where does Just-In-Time Funding come into the proposition?
When you use bonsai for an online or offline transaction, we know our users want to see their financial status at any given point in time. So the way we have built this, we use the Ibanity platform and through that gateway we connect to respective banks. When you use bonsai, transactions show immediately in your app and provide a full history of your payments.
Marqeta's Just-in-Time solution makes it easy for bonsai users to quickly create bonsai Mastercards and start using them right away. We use open banking to check how much money is available in the user's bank account. Then, two days later, we take out the needed funds from the bank account. Even though our card is a credit card, it operates like a debit card because we take into account the available balance on the bank account. This approach helps users steer clear of any surprises at the end of the month.
Can you talk a little more about the Gen Z and Millennial demographics in Belgium and how they view financial technology?
These are our target audience because they are the fastest adopters of modern technology in our society. They have fewer psychological barriers to using banking apps and they are simply the generation that cannot live without their phone. They have much less of an appetite for interacting with traditional banks or institutions. The younger generation wants to use apps and implement easy-and-quick tech for all aspects in their life - this includes banking.
And the way youngsters look at spending money is completely different to older generations. They want flexibility, convenience and zero barriers. They want bonsai to offer them the solution and convenience so they can focus on a more comfortable experience altogether. They also appreciate technological help in managing money. bonsai allows users to easily manage their financial health and frees up time for them to focus on what they enjoy.
What does that growth and evolution look like?
We're currently in discussion with a key financial partner about potential avenues to cater to a specific demographic. In some regions, regulatory constraints pose challenges for this demographic where we are exploring solutions that could navigate these obstacles.
The other area we’re evolving is our sustainability work. The environment is an area that Gen Z and young people in general care about and we wanted to help them contribute to a healthier planet - and in a way that didn’t discriminate based on wealth. That’s why we plant a tree for every 10 transactions regardless of the value. So far we’ve planted just over 700,000 trees in a mangrove project in Madagascar, restoring ecosystems and locking in carbon.
We're continually exploring new opportunities in sustainability and considering various projects for support. One area we're interested in involves environmental initiatives, including efforts to preserve and protect our oceans
To find out more about bonsai, visit the website here.
