Back to learn

Building The Best Paid Account In The Country, Then Giving It Away For Free

2 min read

A screenshot of the KOHO app showing how to earn Essential for free.

Written By

Daniel Eberhard, CEO
Daniel Eberhard, CEO

We're making some changes to our plans–now users can earn our paid accounts for free. Here's what we did and why.


We estimate ¾ of our Essential users who are paying us $4 a month won’t have to going forward. The thing they are paying for today, they will get for free tomorrow.

We estimate almost 100K users on our free plan today will earn the $4 a month plan, getting a free upgrade for doing the things they are already doing!

Our belief is that by giving our users a chance to earn Essential by adding $1000 a month or switching their direct deposit, we’ll create even more fans who love KOHO.

Why we did it

We think a lot about incentives at KOHO. Specifically, we try to create incentives that align with our users and make it really easy to make sure KOHO always acts on their behalf. We think the only way we can win in Canada is if we outcompete the banks on user trust and user value.

A bank dynamic might look like this:

  • The bank acquires a customer for $350. They don’t want to lose money on any of their customers.

  • If a user is wealthy, they’ll have a mortgage, investments etc. and the bank will make money on their assets.

  • If a user is not wealthy, they can’t make money on their assets so they’ll pay them lower interest rates, and make money on fees; things like e-transfers, NSFs, transactions maximums etc. Low-wealth users are very profitable fee customers for banks.

  • Every quarter, banks have to take a public earnings call and talk about how fee revenue is going up.

Not surprisingly, we don’t think this is a good way to build a business.

At KOHO, our dynamic looks like this:

  • We acquire a customer for a lot less than a traditional bank.

  • We keep our costs a lot lower than a bank (1/10th).

  • This means many more of our customers don’t cost us money, which in turn protects us from the pressure of selling something our users might not need, just so we don’t lose money on an account. Our goal is to ‘never offer a user something we wouldn’t be proud to recommend to someone we care about’.

  • This makes it easier for us to keep our users’ trust, which means they stick around longer.

  • When users trust us and stick around, they’re more likely to tell their friends. Today, 2 out of 3 KOHO users either land organically or are referred by friends.

  • This lets us keep our costs low, so we can keep reinvesting in building more value for our users.

This dynamic is really important to us. The banks in Canada are 1,000x bigger than us and there are 6 of them. If we do the same things they do, we won’t build a sustainable business, which means we won’t fulfill our mission.

We know we can build the best-paid account in the country. We think that if we get our users to use it the right way, they’ll earn it instead of paying for it.

It’s exciting, it’s scary, it’s important and it’s the right thing to do.

Founder and CEO



AboutAffiliatesCareersCommunity DiscountsCultureEnterpriseLearnNewcomersTravelStatusStudent & Graduate Discounts


The KOHO Mastercard® Prepaid card is issued by KOHO Financial Inc. pursuant to license by Mastercard International Incorporated. Mastercard and the circles design are registered trademarks of Mastercard International Incorporated.

By using this website, you accept our Terms and Conditions. Follow these links for more information on our Privacy Policy and Accessibility Policy. © 2024 KOHO Financial Inc.