"We’d like to reassure you that your funds are completely safe,and you’ll be able to easily access your funds and have ample time to transfer them to another account,"he said.
The fintech said it would give customers seven days'notice before closing all high interest Stash accounts,after it banned new customers from joining in March. Accounts will no longer earn interest effective immediately,and cards and payment facilities will be terminated from January 15. The Australian Prudential Regulation Authority said it would ensure all funds are returned to Xinja's depositors.
Xinja said it would refocus the business on its US share trading platform Dabble"should circumstances allow". Dabble was launched in July and aims to connect Australian investors with the US stock market with no brokerage fees and an annual subscription.
App-based digital banks,known as neobanks,emerged in Australia in 2018 following budget reforms that simplified the application process to enter the deposit market. Major players include Judo Bank,86 400,Up Bank and Volt.
Xinja was marketed to Millennials,offering high interest deposit accounts and glow-in-the-dark bank cards but has been unable to launch loan products to offset the cash burn.
Xinja held two equity raisings earlier in the year,which sought to prevent staff layoffs and safeguard the company's balance sheet. The neobank's auditors said last monthXinja was "highly dependent on raising additional capital" to stay afloat.