How Much Does it Cost to Create a Trading App Like Robinhood?

The online trading platforms market was valued at $9.32 billion in 2022 and is projected to reach $15.34 billion by the end of the forecast period in 2030, up from $9.94 billion in 2023. The global online trading platform market size was valued at USD 9.55 billion in 2023 and is projected to grow from USD 10.15 billion in 2024 to USD 16.71 billion by 2032, exhibiting a CAGR of 6.4% during the forecast period.

The well-known and most popular financial apps are Robinhood, Acorns, and Stash. These apps rose to prominence by satisfying customers’ needs. Now, let’s examine the Robinhood app and see why it is so successful, as well as how much it costs to create an app similar to Robinhood for stock trading.

What is a Trading Application?

A trading or stock exchange app is a digital version of the stock market that enables users to trade through assets like stocks, securities, bonds, ETFs, and mutual funds through phones and computers.

A trading app offers a wide range of features for an immersive trading experience. It handles portfolios, enables automated transactions such as stop/loss orders, and presents users with real-time stock market information as an easy-to-use stock ticker. In more basic terms, it is an app that essentially brings the whole stock market to your phone.

Well-known and popular trading apps are Robinhood, Acorns, and Stash. These apps rose to prominence by satisfying their customers’ needs. Now, let’s examine the Robinhood app and see why it is so successful and how much it costs to create an app similar to Robinhood for stock trading.

Why is Robinhood so Popular?

Robinhood has broken the conventional barriers of trading practices and made investing much more convenient. In simple terms, it has removed the traditional broker method and introduced a whole digital interface for trading.

The first trading applications were launched in the early 2010s, providing users with unprecedented smartphone access to stock markets. Trading apps, especially Robinhood, have revolutionized the finance market and made the stock market accessible to everyone.

Robinhood became well-known quickly, changing the market with its commission-free trading model and intuitive design. According to recent market data, Robinhood has a user base of around 16 million, making it an ideal model for other trading applications.

This exponential increase highlights the current digital era’s growing need for convenient and easy-to-invest-in platforms.

A Look at Robinhood’s Features and Hype

Robinhood has been a convenient medium for investing, whether someone is a beginner or a professional. Many features make Robinhood stand out among the other apps and create hype in the market.

• Features that make investing more convenient

1. Commission-free trading: Robinhood removed the substantial fees that reduce clients’ returns. Its primary competitive advantage is zero-commission stock and ETF trading, which levels the playing field for all investors regardless of budgetary limitations.
2. Fractional shares: With Robinhood, users can buy even fractions of shares, enabling everyone to have a diversified portfolio.
3. User-friendly interface: Robinhood offers a sleek, intuitive UI/UX design that makes buying and selling stocks easy, which ditches the intimidating jargon and complex layouts.
4. Mobile-first experience: Trade on the go, anytime, anywhere. Robinhood developed an app for the mobile that offers seamless trading through the user’s smartphone.
5. Gamification and engagement: Social elements, leaderboards, and confetti celebrations for completed transactions make investing enjoyable and engaging, encouraging users to stick with it.
6. Educational resources: Robinhood offers various resources to help beginner and experienced investors learn and make wise decisions.

• Additional Features That Creates Hype for Robinhood

1. Democratized finance: Robinhood made investing accessible to everyone who resonated with a generation priced out of traditional markets. Their user-centric approach challenged the elitist image of finance.
2. Riding the fintech wave: Robinhood recognized that the fintech services were booming and aimed at an industry desiring low-cost, efficient results with customers’ mobile demands at first sight.
3. Building a community: Social features and fun branding promoted a community atmosphere where everyone was like-minded investors rather than just users of the platform to trade.

Factors Implicating Development Costs

• Platform Selection:

  Cross-platform development can increase development time and expenses compared to concentrating on a single platform. Along with the platform comes the need to select a development framework, such as Flutter or React Native, to decide on the price of creating a Flutter project.

• Functionality and Features:

  Feature count and complexity directly impact development expenses. Higher development expenses result from the need to implement sophisticated features, including sophisticated charting tools, real-time market data, and social networking capabilities, which take more time and money to implement.

• Customer Interface (UI) and User Experience (UX):

  Investing in better UI/UX design raises development costs but improves customer happiness. Designing intuitive interfaces, performing user research, and iterating on design prototypes incur additional expenses.

• Security Measures:

  Strong security measures must be implemented, which raises development costs. Security aspects that require specialized knowledge and resources include encryption, authentication methods, and regulatory compliance.

• Regulatory Compliance:

  Complying with data protection and financial requirements raises development expenses and complexity. Developers must invest in performing audits, gaining the required licenses or certifications, and comprehending and implementing regulatory standards.

• Integration with External APIs:

  Integrating third-party APIs with fintech solutions for market data, trade execution, and payment processing requires extra development work and expense. Developers could spend money on custom integration solutions or pay licensing and usage fees for APIs.

Estimating the Cost of a Trading App Like Robinhood

A trading app like Robinhood would require some basic features, such as functions to place buy and sell orders, access real-time stock market data and prices, and access company information.

It also has to feature more complex and advanced functionality, such as a commission-free trading system, fractional share investing, payment gateway integration, and security measures.

It must have a state-of-the-art user interface and user experience (UIUX) design to top off. These features already bump the cost to the higher circuits because such features would require multiple segmented development teams of various developers, making your entire project run from 10 to 50 to over a hundred developers.

Building a trading app like Robinhood can cost between $500,000 and $1,500,000, depending on the project’s complexity and whether you outsource or develop it in-house.

Trading Apps and Their Cost Accordingly

• Brokerage Apps:

  Cost estimate: $50,000 to $500,000
  Traditional brokerage firms offer these apps and allow users to trade various financial instruments, including stocks, options, ETFs, and mutual funds. They provide access to market data, research tools, and account management features. Examples include Robinhood, TD Ameritrade’s thinkorswim, E*TRADE’s mobile app, and Charles Schwab’s StreetSmart Mobile.

• Robo-Advisors:

  Cost estimate: $50,000 to $200,000
  Robo-advisor apps automate the investment process using algorithms and software to create and manage investment portfolios based on user preferences and risk tolerance. They typically offer diversified portfolios of ETFs and use rebalancing techniques to maintain portfolio allocations. Popular robo-advisor apps include Betterment, Wealthfront, and SoFi Invest.

• Cryptocurrency Exchanges:

  Cost estimate: $100,000 to $1,000,000
  These apps facilitate the buying, selling, and trading of cryptocurrencies such as Bitcoin, Ethereum, and Litecoin. They provide users with access to a wide range of digital assets and trading pairs and features like real-time market data, price charts, and wallet management. Examples include Coinbase, Binance, and Kraken.

• Social Trading Platforms:

  Cost estimate: $50,000 to $300,000
  Social trading apps allow users to connect with other investors, share trading ideas, and even automatically copy the trades of successful traders. They combine elements of social networking with investment features, enabling users to learn from and collaborate with peers. Popular social trading platforms include eToro, ZuluTrade, and TradeUP.

• Fractional Share Investing Apps:

  Cost estimate: $50,000 to $200,000
  These apps enable users to invest in partial shares of stocks and ETFs, making it easier for individuals with limited capital to diversify their portfolios. Fractional share investing apps often offer low or no minimum investment requirements and may include features like automatic dividend reinvestment. Examples include Robinhood, M1 Finance, and Public.

Additional Tips for Cost-Effective Stock Trading Application Development

• Choose Technology Stack Smartly:

  Use cross-platform technology like Flutter and React Native to minimize the cost without compromising the quality on both IoS and Android.

• Prioritize features:

  Start with essential features and add advanced features later based on user feedback and budget.

• Use Open-Source Libraries:

  Use open-source libraries that are easily accessible for tasks like data parsing, authentication, and charting. This decreases license costs and development time, freeing up funds for essential features.

• Consider outsourcing:

  Hire fintech app developers from a reputed company or find someone with portfolios for these applications. Outsourcing the developers from countries with lower rates will save you lots of money.

• Phased development:

  Develop and launch the app in stages, adding features to the base version as you go. This method allows you to avoid spending all the money simultaneously and sensibly on the necessary features.

Conclusion

Creating a stock trading app similar to Robinhood involves a complex development process that requires a deep understanding of fintech and robust technologies. Beyond the cost, the technical challenges of building a smooth, secure, and reliable app demand expertise. To ensure success, it’s essential to collaborate with outsourcing software development companies experienced in fintech solutions.

Why Choose Appventurez for Your Fintech App?

If you are considering developing a stock trading app like Robinhood, partnering with a software product development company is highly recommended. At Appventurez, we specialize in delivering custom solutions that tackle fintech complexities. For instance, with our work on Mudra, we demonstrated our ability to push the boundaries of innovation, tailoring financial applications to meet our clients’ specific needs.

Our Success Story: Ezipay – A Fintech Revolution

One of our recent projects, “Ezipay,” exemplifies our expertise in fintech app development. This AI-powered application allows users to conduct seamless financial transactions and offers tools for tracking daily expenses and managing budgets. Launched in over 12 countries, Ezipay has been a game-changer in the industry, providing an efficient, user-friendly experience and reshaping the financial landscape.