EXCLUSIVE – It’s Credit Karma’s second tax season as a tax prep/filing company, and already about 3 million people have started using Credit Karma Tax, according to Jagjit Chawla, general manager of Credit Karma Tax. That number is three times the 1 million filers in the company’s last tax season.
“It’s important to remember though, that tax filing starts January 29,” Chawla told Bank Innovation, “so this number is the number of people that have started their tax prep on Credit Karma, we won’t know how many will actually file till after tax season.” And with a free service, a “highest-refund” guarantee and a newly added early bird advance feature, Chawla is hoping users will file through Credit Karma.
Since its launch last year, Credit Karma Tax is among the top five DIY tax preparers in the country, Chawla said.
“We want to get into the top three this year,” he said.
And now that people can prepare and file their taxes through the mobile app, the possibility seems reasonable.
“We are seeing 40% of tax preparation activity on the mobile app during the day,” Chawla said. “Interestingly, that switches to 60% users on their mobile [device] after 10 PM PST.”
This seamless switch from mobile to desktop is another key distinction between Credit Karma Tax and its competitors, which typically don’t allow for a seamless switch between different platforms; either by making the user re-enter some information, or requiring them to log-in again, or in some cases requiring them to complete the process only on one platform.
No doubt, there is a lot of potential for the mobile app, Chawla said.
Right now, users can even take pictures of their W2-forms and the information automatically gets populated onto the page. As for the early bird advance, this is a loan that gives the user access to their refund before the amount is actually refunded by the government. For this, Credit Karma has teamed up with American Express, which issues a prepaid card in the refund amount. MetaBank is the underwriter for this loan.
As for plans for next tax season, Chawla said one feature they are currently working on is being able to allow automatic transfer of a user’s investment on a platform such as Robinhood onto to the Credit Karma app, that way users don’t have to fill it in themselves.
Since its founding in 2007, Credit Karma has diversified from a free credit scorer to other products from the tax filing service to an unclaimed money service.
With over 75 million users till date, the company has prided itself in being completely free, something it is adamant on maintaining across all its channels. The company makes money on commission when a customer buys one of its recommended products and services.
By expanding its own offerings, Credit Karma is building its brand, and therefore also amassing people who trust the brand, Chawla said. Ultimately the goal is to become “the money button on your phone,” he said.
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