French startup Lydia is launching a card so that you can spend your Lydia balance in every retailer that accepts MasterCard. You can trigger a lot of features in the app. In other words, you remain in control of your card, and not your bank.
Lydia started off as a peer-to-peer payment app so that you can pay back your friends using your phone — gone are the tedious IBAN and wire transfers. There are now 500,000 Lydia users in France.
While sending money takes just a few seconds as Lydia relies on your bank’s credit card to charge you, it can take a couple of days before your recipient actually gets the money in their bank account. Like many other payment apps, Lydia relies on SEPA transfers when you withdraw money from your Lydia wallet.
But this is about to change as Lydia is making withdrawal instantaneous as well thanks to a good old plastic card. Users can request a card for €10 ($11.15), and then they’ll have to pay €3.99 per month ($4.45) — if you use this link, you won’t pay for the initial €10 fee. This card is optional, existing Lydia users can still withdraw money to their bank account for free.
“A card is just a piece of plastic, it’s only a way to authenticate you,” co-founder and CEO Cyril Chiche told me. “And now, we’re realizing that the tech infrastructure behind it matters more than the card itself.”
That’s why Lydia’s card is more flexible than traditional credit cards. Users can activate or deactivate features from the Lydia app. For instance, you could disable NFC payments, ATM withdrawals, foreign payments, etc. Or you could set the payment limit to €50 if you only want to pay for small things with your Lydia card. Or you could disable your card altogether if you can’t find it, and enable it again.
You can trigger these features as many times as you want, and there’s no delay. Similarly, transactions appear instantly in the Lydia app. The reason why Lydia can do this is because the Lydia card checks and updates the MasterCard network every time you try to pay with your card.
When it comes to obscure fees, there’s no overdraft and you can pay everywhere around the world without any additional fee. Lydia doesn’t try to trick you with conversion fees, it uses the standard MasterCard conversion rates.
The company has partnered with a French financial institution to issue these cards. Lydia controls the experience and branding.
In many ways, the Lydia card has the same feature as the N26 card. The main difference is that you don’t have to open a new bank account to use the Lydia card. I feel like only hardcore Lydia users are going to use this card for now. But as Lydia adds more features, the card could become an important part of the product.