Xinja is nursing bruises, a neobank in a fix - from today the bank's high-yield savings account is a dormant product, a sharp twist to the capital raise the bank has in the market.
Xinja Bank have thus abruptly ended one centrepiece of their customer acquisition strategy.
Eric Wilson, the neobank's CEO, announced yesterday Xinja would "pause" opening new savings accounts, "so it can look after existing customers following the RBA's rate cut and unprecedented inflows".
The bank (licenced only in September 2019) has had this product in the market only a few months, and it's been a bit of a tearaway, this buzz now replaced by a more uneasy story for backers daydreaming about unicorn valuations.
Xinja imagine THEY will be THE global digital bank. They say this. And while they will have planned for this disruption the lesson is simple.
High-yield, best-rate, too-good-to-be-true entries to the deposit market; this billy cart runs off the road. Volt Bank, 86 400 and a watchful Judo Bank are the winners from Xinja's exuberance.
Hay (no-bank-in-the-name) and IN1 Bank are yet to reach the market, though Hay looks super close to doing so.
Back at Xinja, Wilson said the bank now has more than 25,000 customers, 43,000 accounts and more than A$350 million in deposits.
Wilson explained the drastic move to shut the gate on new accounts: "When faced with higher than expected deposit flows, and an RBA rate cut, most banks would just drop deposit interest rates, hurting existing customers while chasing new ones."
But, Wilson declared: "That's not what Xinja is about.
"We are holding our Stash rate steady, at 2.25 per cent, but hitting the pause button on customers opening new Stash accounts.
"We want to stand by the rate we have offered," he said.
"The RBA rate cut makes it more expensive for Xinja to hold deposits at the same rate before the launch of our lending program," Wilson said.
The negative, capital-consuming margin Xinja must be "earning" on its overpriced deposit product is one of the drivers behind the timing of the bank's latest, $50 million capital raising, which is in the market this week and a client who may be in a hurry.
Only on Wednesday, in an investor pitch, did Wilson and Xinja share the news the bank "may well choose to limit further deposits as we focus our attention on the asset side of the balance sheet".
Ringing down for dead slow, almost stop, Xinja are the first Australian neobank blown off course. Plenty will follow.