Yesterday, fintech startup Lydia unveiled a brand new design for its financial super app. And it’s a quirky take on mobile payments — not just a fresh coat of paint. I sat down with the company founders to discuss Lydia’s thinking and vision for the future.
In many ways, Lydia does not stand still and continues to reinvent herself. The company started out as a peer-to-peer payment app for the French market. For the first time, people could send and receive money directly from their smartphone.
The app has evolved a lot in recent years. The company has recently reached unicorn status and the team is in the process of iterating over more services and features.
In particular, you can now use your Lydia account as an alternative to a regular bank account. Users can order a debit card and send and receive money via a unique IBAN. Users can also trade cryptocurrencies, stocks, precious metals and ETFs.
With this new design, the company streamlines its app with a clear separation between your activity, your accounts, your cards and your trading activities. More importantly, the company is positioning its mobile app as a social product – not a fintech product.
Laying the foundation for the next 10 years
When I met Lydia’s co-founders Cyril Chiche and Antoine Porte, they had both read my recent article on Zenly, another popular social app designed in Paris. And they found some similarities between the new Lydia and the new Zenly.
“We just sent a newsletter to our user base revealing a new chapter for Lydia, setting out the plan for the next 10 years – just like Zenly,” co-founder and Chief Product Officer Antoine Porte told me.
It works, but it was never designed for humans. Cyril Chiche
This is not an arbitrary milestone. Lydia launched the first version of his app nine years ago. “If you count the gestation period, it’s been 10 years,” Porte said.
The company has managed to attract 5.5 million users. And a fraction of them have now decided to use Lydia as their primary account.
“The more we make progress in financial and banking services, the more we try to understand why people hate their bank,” co-founder and CEO Cyril Chiche told me.
“If you dig further, you realize how banks have used technology. They built a wonderful system for interbank business. You can move money from one end of the world to the other. It works, but it was never designed for humans,” he added.
This pretty much sums up Lydia’s design language. The team wants to build an app that is “designed for people”. For example, someone who has never used a banking app before will not need to learn about SEPA transfers and IBANs before sending money to a family member.
When you open the updated version of Lydia, the main tab has been cleaned up drastically. It is now an activity feed with your latest transactions. There are two buttons at the top of the screen – receive and pay.
At the bottom of the screen is a new tab bar with clearly labeled buttons. You no longer have to guess which button does what.
The second tab shows your accounts — your primary Lydia account, your sub-accounts, and your bank accounts that you’ve collected in the app. Personal accounts and shared accounts are now separated into two sections.
The third tab allows you to access your cards and control them from there. Trading now gets its own tab, separate from the rest of the app. If you rarely open Lydia, it’s now much easier to understand where to tap to access what you want to open.
What is money?
Like French entrepreneurs who overthink everything, Lydia’s founders keep coming back to the definition of the terms they use. “We’ve forgotten why money exists, because we see money as an accounting tool,” Porte said.
“Money has a meaning. It’s either a project or a memory,” Chiche added later in the conversation.
And yet, when people open their banking app, it feels like they’re opening an Excel spreadsheet. Worse, it often triggers a lot of negative thoughts.
“Your account was only credited once and everything else is negative edits. When you look at your statement, you feel like you screwed up,” Chiche said.
Money is what you do with it. Antoine Porte
According to the founders, there is too much debt in banking. That is why you will no longer see your account balance when you open Lydia. You have to tap on the second tab to view it. That’s also the reason why you don’t see the € sign next to every transaction. The company does not want to stress the accounting aspect of your transactions.
“The worst thing is neobanks that show you a graph of your balance over time,” Chiche said.
“We need a new definition of money. Money is no longer coins, bills or physical things. That could be the opportunity to go back to the origins — money is what you do with it,” Porte said.
A fintech app or a social app
Any transaction in Lydia can be considered an event. You can open the transaction card, rename it and add emojis to make it mean something to you. For example, you can put your baby’s name on the baby’s room bill.
Today, the company goes one step further. Users can add a photo to any transaction. That may seem a bit odd at first, but Lydia really believes it has a shot at building the best social diaries app.
You may think that keeping a journal is a thing of the past. But a generation of smartphone users is journaling every day without realizing it.
The magazine itself has evolved. Instead of buying a luxury notebook and spending 15 minutes every day writing about the current day, people are taking pictures with their phones. The film roll has become a kind of ubiquitous, effortless diary.
Lydia is so simple and fast that it has always been considered a utility app. But it has always been a social app. Antoine Porte
Lydia plans to capitalize on this by expanding the film roll. First, your past financial transactions represent a structure. Second, adding a photo makes a transaction much more personal. “If you don’t know which photo to use, it probably means it was an unnecessary expense,” Porte said.
Third, it turns every transaction into a potential social post. You can swipe through your transactions just like you would swipe through photos in a photo album. If it is a shared release, other users will see the photo. It also creates a virality factor because people may start asking why you’re taking a picture. You could imagine a feature that allows you to share a transaction in other apps as well.
More importantly, it offers many possibilities. A card transaction also happens at a certain place and at a certain time. Lydia could fill the transaction screen with more details about the place you visited. As soon as Foursquare invented check-ins, people started talking about check-in fatigue. Perhaps the most powerful check-ins are your card payments.
It brings us to the main question. Is Lydia a fintech app or a social app?
“Lydia is so simple and fast that it has always been considered a utility app. But it’s always been a social app,” Porte told me.
I don’t think it’s that simple. Some users will still use Lydia a few times a month to send and receive money. But a small, highly engaged segment of the user base may see Lydia’s social potential.
We don’t need to come up with a definitive answer at this point, as the redesign is a definite improvement over the previous version of the app. “People tell us our competitors are Revolut, but they’re bankers,” Porte said.
“Instead, we want to create the WhatsApp of money,” he added.