
Twitter's Alex Payne quits, heads onto something new. - malbiniak
http://al3x.net/2010/05/17/something-new.html
======
maxklein
I'm sorry, but I want my bankers to be grave old men in suits. I also want my
bank to have offices all over the world and I want to know that they are
handling money many hundreds of times larger than whatever I have.

I don't want a bank started by a guy called al3x, and who just left twitter.
It sounds innovative, but it doesn't sound...dependable.

And if there is one feature I want my bank to have, it's dependable.

~~~
ihodes
That's why I'll be using it first, and lots of my fellow college students who
have a lot less to use and a _lot_ more to gain from using a bank like
BankSimple.

Time is in short supply, and fees eat away at my little pool of cash.

I'm willing to take the risk, and willing to put my money in the hands of
people who are young, smart and innovative, instead of bureaucratic, slow and
set in their ways.

Not only that, but if you'd checked, your cash will be FDIC insured through
their partners. I certainly don't have a quarter of a million sitting around.

Finally, the way things are going now, the government is the only reason those
"grave old men in suits" still have your money at all.

~~~
billpaetzke
ING Direct (ingdirect.com) is an amazing online-only bank that has virtually
no fees. They've got amazing customer service. And they have the best bank web
user interface I've ever dealt with. BankSimple will need to differentiate
themselves from ING Direct somehow.

edit: Why the downvotes? I use ING Direct as my main bank. I love it.
BankSimple will need to differentiate themselves from ING Direct to win me
over.

edit #2: I have nothing against BankSimple. I hope they succeed. The market
could use another friendly, efficient, tech-savvy bank. Perhaps they will
drive innovation in the banking industry.

~~~
WesleyJohnson
When I first signed up, their savings accounts were yielding 3% interest,
which seemed great considering no minimum balance and no withdrawal fees. With
the dip in the economy, they're just barely hovering over 1% now. Even still,
if you compare that with the two other banks I've dealt with (5/3 and Chase),
they don't really have anything that comes close unless you have massive
balances or you want to tie up your money.

I'd love to hear if there are other easily accessible savings accounts out
there that can tie into your checking account, with no minimum balances or
withdrawal fees, that offer comparable interest rates.

My finances aren't stable enough right now to look into anything like CDs,
Bonds, etc - it needs to be an interest bearing savings or checking account.

~~~
billpaetzke
HSBC Direct is an online-only bank that offers slightly better rates than ING
Direct. In fact, their rates are possibly the best (and ING the 2nd best).

The downside to HSBC, is that their web interface and operations of business
are antiquated. While I have an online checking and savings account with them,
I really only use the savings account. I just can't bring myself to deal with
them because the user experience of ING Direct is so much better. For example,
if you want to transfer money from checking to savings (or vice-versa), with
ING it's instantaneous; but with HSBC you have to wait a business day!
Ridiculous, I say.

HSBC is great if you're traveling/living in east Asia. I traveled through nine
countries in Southeast Asia last year and never paid an ATM fee. Their ATMs
are all over, and they're also partnered with many other Asian banks.

If you live in the USA (like me) I'd say keep your 6-to-12-month cash reserve
in HSBC. And do your day-to-day banking and short-term savings with ING
Direct.

------
mattmaroon
I've wanted to do something very much like this in a future startup. Banking
does suck.

Unfortunately, it's debatable how much of banks' suckiness is avoidable.
Retail banking is caught in a vice-grip between fierce competition for low
margins and government regulations. For example, from what I understand you
pretty much have to run mainframes with certain antiquated, government-
approved software to process stuff through ACH. KYC rules prevent extremely
efficient account openings. Etc, etc.

I'll be curious to see how this goes.

~~~
webwright
Of the value props he describes, the only one that remotely resonates with me
is: "A bank that puts your money to work automatically."

He writes that nobody LOVES their bank. But does anybody really HATE their
bank? Maybe some vocal folks, but a bank to me is a utility-- a hole in the
wall where I stick my money. I've never felt gouged by fees (when I was young
and stupid, I've been annoyed by overdraft fees, but they seem justified).
I've never been overwhelmingly frustrated by the design decisions of my bank.
They decidedly don't treat me like crap. Every time I've needed to interact
with my bank(s) it's been a pleasant experience.

Given the switching cost/inconvenience, I think this is going to be a hard
sell for most people.

~~~
jorgeortiz85
Must be Stockholm syndrome.

Have you tried to pay a friend an amount of money that would be inconvenient
to do in cash? The best way to do it through your bank is to have them chop
down trees into paper checks, physically mail them to you (this takes a few
days), have you scribble down a number on the paper, hand (or mail... wait a
few more days) the check over to your friend, who feeds it into an ATM, which
scans the number you scribbled down, then you wait a few more days and
eventually a few bytes in your bank's servers change to reflect your intended
payment.

The last time I tried to make that entire process electronic-only, Bank of
America said I needed to know my friend's account number and routing number,
and even then they wanted me to show up to a bank branch in person to complete
the deposit.

Sure, you could use Paypal, but it's an additional layer of complexity and
risk, and if you're not careful they'll skim 3% off the top of your
transaction.

Let's see... what else? Debit and credit cards. I live within my means. I
don't want credit. I pay off my balance in full every month. Other than a
hypothetical emergency, I would have no use for a credit card... except
consumer protections for credit cards are much stronger than for debit cards.
I'd be a fool to use my debit card instead of my credit card. And even though
I've paid my credit card balance off in full every month for years, the one
time I slipped by 3 days, I got slapped with a $30 late fee on a $200 balance
(180% APR!).

Speaking of debit/credit cards... I visit my family in Mexico 3-4 times a
year. Every time I go, I have to make sure to call Bank of America twice, to
let both their credit card and debit card departments know that I'll be
traveling. I'll have to wait on hold an average ~30minutes each time I call.
If I forget to do this, and I try to use my credit or debit card while in
Mexico, my cards will get frozen due to "suspicious activity", again
necessitating a call to Bank of America. I do appreciate that they're looking
after my financial safety, but I really do travel to Mexico quite frequently.
There's nothing anomalous about my using my cards while I'm there. Once I do
call they're incredibly helpful, but it's annoying that I have to call at all.

And don't even get me started on the fees and shitty exchange rates for using
your card outside of the US...

Banking in America really is broken. If they're as good as they say they will
be, I look forward to giving BankSimple my business.

~~~
mattmaroon
You need to use credit cards for the rewards too. Credit card rewards eat a
couple % of the merchants' profits, which they pass along to all customers in
the form of higher prices. Therefore people who pay by other methods are
effectively subsidizing the frequent flier miles and Red Lobster gift cards of
those who use credit.

------
Kilimanjaro
Guys guys guys, great idea, I applaud your efforts but...

More than once I'll be typing banksimple and hitting ctrl+enter so I'll go
right to a phisher's page ready to empty my bank account as soon as I type my
id/pass.

Really, get a dot com.

~~~
al3x
We'll get there. Running lean right now.

~~~
nreece
For the nature of business service you are going to offer, a reliable online
presence is not an option - it's a requisite.

~~~
davidmurphy
give em some time, guys.

------
davidw
We've had the bank discussion here before, and some of it seems to come down
to the fact that banks are required to do a lot of regulatory stuff that is
not 'simple'.

~~~
al3x
There are regulatory challenges, but the other two BankSimple guys (the real
brains) have figured out a ton. I'm confident we can do some cool stuff.

~~~
davidw
Best of luck then, I don't think anyone's not rooting for you here.

------
marvin
This is going to be interesting. Sucky banking services are largely an
American phenomenon.

My bank in Norway has no physical offices and conducts all of its services
over the internet, phone or mail. There are (practically) no fees and the
interest rates on its savings/checking accounts (there are interchangable,
since there are no fees) are within 0.2% p.a. from the best that can be
obtained anywhere in the country, regardless of capital amount. All funds are
insured from bankruptcy through the national bank security fund. The young
crowd almost never uses checks in Norway - all bills are paid online. The only
problem with this system is speed and service - if you suddenly lose your
credit/debit card, you will have a few days of worry while the bank sends you
a new one. Identification can be complicated, since there isn't a person 15
minutes away that can physically talk to you and verify your identity.

All in all, I think this is very promising. Someone needs to pull American
banking into the 21st century. This guy will have problems with legislation
and bureucracy and huge competitors, though..count on that.

~~~
judofyr
What's the name of the bank?

~~~
marvin
Ya bank.

------
benologist
I for one welcome a bank where I can just message "accept $100".

~~~
mortenjorck
accept benologist $100

~~~
benologist
It'll work.... but not many times unfortunately. Try 'pg'.

------
dtran
All of these bad gateways I'm getting from nginx don't give me a whole lot of
confidence in this banking website =P I know it's early, but perceptions like
that matter.

------
synnik
I have worked in the banking industry. Building a better technology stack for
a bank is possible. But you need to understand the current technology first,
including how it got to where it is today.

You also need to understand the banking industry.

And you need to be focused on reliability. Twitter's reliability history is
not adequate for a bank.

So do I think he can do this by himself? Not a flippin' chance. But I do think
he could contribute some innovative ideas, if teamed up with people who have
deep experience in the industry.

------
ErrantX
oh no...

Don't get me wrong if they pulls this off it will rock.

But we've discussed this before... and it is a _hard_ problem. _Extremely
Hard_

~~~
jon_dahl
Not to sound glib, but:

 _it is a hard problem. Extremely Hard_

Isn't that exactly what an ambitious entrepreneur should look for? Especially
someone who's had some startup success in the past?

------
joanou
Good luck with that.

There is no such think as a bank that doesn't suck. If there are, they are
called credit unions. For profit banks have customers. Non-profit credit
unions have members.

------
julio_the_squid
This is at least the second long time Twitterer to found a new business
related to finance or payments (the other was Jack Dorsey's Square). I guess
they're in a position to perceive a high level need in that area? Pushing
money around gives you a lot more chance for revenue than dealing with mere
tweets, I suppose.

------
luckyland
A bank that wants to do things differently and be known for customer service
should conspicuously publish their privacy policy and reveal their network of
partner banks.

It's not clear what happens with the statistics of your bank usage nor where
your money actually is.

Is this version 2 of Mint with banking 'features'?

------
mark_l_watson
I wonder if his new company will do everything in Scala. If I were starting a
company and writing the corporate stack from scratch, Scala would be a good
possible choice. He has written a fair amount about Scala, so I am just
wondering...

------
smiler
SimpleBank looks interesting - I assume this is a 'virtual' bank and they are
just reselling some other bank but putting their interface on it.

Anyone know any details?

~~~
jackowayed
It's not just a pretty interface to Bank of America or anything like that. But
they aren't a normal bank with a charter and millions of dollars put up in
bonds to allow them to operate legally. They haven't gone into detail about
exactly how everything works, but they have a "network of banks" where the
money will be stored (which is how they get it FDIC insured), and they sit on
top of that in some way.

<http://banksimple.net/blog/2010/03/23/status-update/>

> _When we first started thinking about starting a bank we looked into the de
> novo banking process. This is the process by which new banks are formed from
> scratch. This is both expensive and, more importantly, it takes too long to
> launch. It is near impossible to innovate with an imposed three year launch
> delay. The best way to serve your needs is to launch quickly and to adapt
> our offering to meet your individual needs. Modern technology lets us do
> that. To achieve this we are planning to launch with a special corporate
> structure. We are bringing together a group of financial institutions to
> provide our underlying banking services. Our partner banks hold all deposits
> in insured accounts._

------
mdon
this already exists: USAA Banking and Investing

~~~
0x44
USAA Banking and Investing isn't accessible to most of the public, and is
locked down as to be almost indistinguishable from other credit-unions for
their non-veteran, non-military customers.

~~~
fname
Not true. USAA Banking, Investments and Life Insurance are open to everyone,
regardless of prior military service.

[https://www.usaa.com/inet/ent_utils/McStaticPages?key=why_ch...](https://www.usaa.com/inet/ent_utils/McStaticPages?key=why_choose_usaa_eligibility_main&wa_ref=wcu_main_is_usaa_for_you)

~~~
rdl
The other service credit unions (Tower (NSA), Pentagon Federal, and Navy
Federal) are all really good, too, although not as good as USAA.

USAA's insurance is top-notch, too.

------
zxz
What's up with the .net for their domain?

~~~
bdickason
.com was squatted?

------
dschobel
Pretty shocking, especially considering the equity he's presumably walking
away from. More power to him.

~~~
kneath
I doubt he's walking away from much equity at all. He's been with Twitter a
long time. If he isn't 100% vested, he's got to be pretty close.

~~~
dschobel
Yeah but would it be worth anything pre-IPO?

~~~
chl
Maybe it's worth _more_ pre-IPO!

------
joubert
they will need someone with actual banking experience on their team -
<http://banksimple.net/team/>

------
dtran
From their about faq page: _How do I deposit checks? Take a photo of the check
with your smart phone and send it to us with our app. Pretty simple, right?_

Is this really secure? I know there are some people doing cardreaders as an
attachment to the phone, but pictures of checks?

~~~
mrkurt
USAA lets you deposit scanned check images. The only requirement is that you
have to have a credit card setup as overdraft protection. Decent photos seem
like they'd work ok.

~~~
dtran
So do you think we'll move away from paper checks completely and just move
around echecks from phone to phone? I've never really understood how checks
are secure. They just have a routing number, an account number, and your
signature right?

~~~
jarek
Cheques are earth-shatteringly non-secure. The entire system runs on trust.
I've had a several-months-post-dated cheque I wrote cashed by a bank and
accepted by mine without apparently as much as a look at the date field. (They
also dinged me an overdraft fee. Reversed that when I complained, but not the
cheque withdrawal itself.) A while back, there was a pretty loud story about
an payday-advance business suing the maker of a subsequently cancelled cheque
for the money and winning the amount.

The sooner North America weans itself off cheques and external for-profit
inter-bank transfer systems (Paypal, grrr), the better off we'll be.

------
Judson
I just don't think that the "fee" play is going to cut it as innovative.
Others have mentioned ING Direct and Ally.

The _real_ innovation will be cutting out things like the 3 day "clearing"
window for funds. Or eliminating the delay for ACH'ing funds (an all
electronic transaction).

The problem, banking is too regulated to _really_ innovate, though I applaud
the attempt.

 __Edit: If they create an iPhone app for depositing checks (Just like USAA).
I am sold. I would also like to think that many tech-savvy people would be
sold also. __

------
whyenot
I currently use Charles Schwab Bank, and don't really see how SimpleBank would
be a big improvement. The only feature that SimpleBank has that Charles Schwab
Bank doesn't seems to be the ability to take pictures of checks and send those
electronically when you want to make a deposit.

Is "al3x" from twitter really up on all the details and security concerns of
running an online bank? Will his company do a better job than Charles Schwab?
My gut feeling is no.

~~~
dzlobin
Can you please read about the other founders and the actual company before you
think they aren't "up on all the details"

~~~
whyenot
I did look at the bank website and at the team before I posted .

As I mentioned, the features of SimpleBank do not appear to be much different
from what is available from my current internet bank. As far as the team goes,
they may be bright, but none appear to have worked at a bank before, either
brick and mortar or digital.

~~~
ThomPete
Actually that might be an advantage to them.

------
prs
"Starting a Bank for Fun and Profit" has become more popular topic in recent
years (See: <http://ma.tt/2009/08/starting-a-bank/>).

Starting a bank from scratch is not impossible but will certainly be no easy
feat. I wish Alex Payne and the team he is going to be working with good luck
in cracking existing banking structures.

------
mscantland
I suspect that not charging overdraft fees will result in adverse selection-
people that have no money and therefore can't be used to build a loanable
savings asset.

I really hope this works, but due to switching costs, BankSimple will have a
very uphill road to climb if they aren't planning to pay very high interest
rates or otherwise attract people with some savings.

------
mootothemax
If they wanted to be truly innovative, they could kick-start anonymous
internet banking by being the first institution with a public face to do so.
_That_ would be revolutionary, and whilst I admire the aim of making a
fantastic bank, it still leaves me feeling a bit unexcited :-/

------
rythie
It would be cool if bills appeared in an inbox on your online bank account so
you could review and pay it in one click. Also, you would have the full
details of what you bought in the history of your account.

Also a graph and projection of your bank balance would be neat.

Actually, an API for a bank would be really cool.

~~~
dkasper
_It would be cool if bills appeared in an inbox on your online bank account so
you could review and pay it in one click_

A lot of banks have some sort of bill pay feature. I have a feature that is
exactly like this in my Schwab account including being able to view the bills
to see what's on them and pay in one click.

~~~
rythie
What's Schwab? These people: <http://www.schwab.com/> ?

My Banks have sort of a bill pay feature though it's not like I described,
it's just a pre-populated list of payees like Electric, Gas, Water etc.
companies and it's not even that simple because each company often has several
accounts so you have to pick the correct one.

------
Bossman
Sounds pretty cool in theory. But can a new bank like this really make it in
today's over-regulated, Wall Street controlled market? Don't get me wrong, I'd
love to see it go somewhere and be available nationwide for people to have a
better banking experience. I'm just a bit skeptic.

------
ax0n
I kind of wondered if this was coming, due to the very specific nature of
Twitter's job postings as of a few months back that kind of treaded on al3x's
turf.

Best of luck to him. Also, I think I want in. On being a customer, not an
employee. I just got my dream job.

------
tszming
Imagine, for a moment, a bank that doesn’t suck...

A bank that display funny pics when system goes down... The money in your
account is eventually consistent... A bank allow users to type command to
transfer money, e.g. "accept $1000"...

------
natrius
> _A bank that puts your money to work automatically._

This sounds interesting. I don't know how they'll succeed at this while making
money, keeping risk low, and beating the rates that something like Ally Bank
will give you.

------
cageface
I wonder if Twitter is still happy to have crucial pieces of their backend
written in Scala. Have they found other Scala hackers to pick up the slack?

~~~
fizx
Yes to both :)

------
FabriceTalbot
That's a huge leap for him. It's true, it doesn't sound to dependable, but it
might be worth the risk in the end.

------
pxlpshr
must be easier to make money when your business model requires cash up front
as oppose to finding it later.

------
poundy
He needs to fix this soon <http://banksimple.net/jobs/>

------
jrockway
Sounds like ING Direct.

