
BankSimple: We have cards - timf
http://banksimple.com/blog/2011/05/20/we-have-cards/
======
meterplech
This is very intelligently done. I'm glad they are releasing the cards to just
a small set of people first to check that everything works. People are very
wary of any issues with their money/with their bank and absolutely any problem
at the beginning would seriously hurt user adoption. Start slow and make sure
it works.

~~~
foobarbazetc
How is this "intelligent" and not obvious, common sense before you _roll out a
bank_?

~~~
thinkcomp
But I thought BankSimple wasn't a bank, despite the confusing name.

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palish
_"BankSimple: Personal banking from a company that respects you."_

That's not a bank?

~~~
salver4m
From the FAQ:

So, what’s the deal... are you really a bank?

We are not a bank. We work with partner banks (soon to be announced) to
provide FDIC insured products. What this means for you is that your money is
safely insured with our partners. Our wholesale partners provide the financial
products, we provide the customer service and experience.

~~~
dreamdu5t
They're "simple" but they like to play semantics. I mean, really, they have
"bank" in the name and they provide banking services. To me, the consumer,
they are a bank.

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orijing
As I understand it, banks make a large amount of revenues from fees and such.
How will BankSimple succeed if it doesn't use that? How will overdrafts work?
Will the check just not go through?

I love that they are trying to revolutionize the banking industry, and I wish
them well. But I'm afraid that they'll succumb to adverse selection to the
greatest degree. The reality is that most of a bank's customers are not
profitable (without the fees), which is why they institute these ridiculous
fees to either drive them off or make them profitable. If BankSimple can make
these previously-unprofitable people profitable again without surprise fees,
they'll be a great success.

Let's hope that happens.

~~~
mahyarm
The 1.5% they get from every single credit (and debit) card transaction as the
issuing bank. I also understand that they'll have no branch locations. My
local credit union has no fee checking and savings accounts, and in the years
of using them they have only given me fees for the occasional coverdraft and
absolutely nothing else. Just like how netflix is usurping cable companies
$100 bills for a $10 + Internet bill, they'll do just fine.

~~~
aquark
Do debit cards typically incur the same fees as credit cards?

I thought many places here (Canada) accepted debit but not credit because it
was a fixed fee per transaction not a %

~~~
mahyarm
In the US (and the UK I believe), debit card transactions are done through
mastercard/visa and can incur similar fees. You can also type your debit card
number on online purchases and it will work correctly, vs. interac where that
doesn't work. Interac is very nice for retailers in canada since it's just one
flat .25 fee for any transaction, just limited by your daily card limit.

~~~
pavel_lishin
I thought that fees and such were only incurred when you ran your debit card
as a credit card transaction, with signing your name and such - I was under
the impression that using your PIN number and using it as debit didn't incur
those costs.

~~~
chexton
From memory, I am quite sure that here in Australia standard bank cards, which
are generally referred to as debit cards, use an entirely different fee
structure to credit cards. These bank cards always require a PIN and work on
the EFTPOS network. Important, as you can't use them online. The rate is a
flat one if I'm correct.

Debit cards issued by Visa or Mastercard and operating over those networks
incur a lower fee than credit cards but follow the same interchange fee
structure. Australian Visa interchange fees are here:
<http://bit.ly/visainterchangefees>. Just incase anyone was interested.
Whether or not these cards require a PIN or signature depends on whether they
use the Chip-and-PIN system, which all new cards issued in Australia should.

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paulitex
Only 4 days after losing their Lead Engineer.
<http://twitter.com/#!/KirinDave/status/70217986962751488>

~~~
xbryanx
Interesting that his pic is still in their "Team" mosaic on the homepage.

~~~
TimH
Twitter's staff pic on their recruitment page shows a lot of people who have
left too.

~~~
Lewisham
They should put big red X's over each member that left, Battle Royale style.

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Aloisius
Can someone please tell me the benefits of BankSimple over all the other
online banks or your local credit union? I'm afraid I don't get it.

~~~
mdasen
In some ways, they're over-reaching. Sure, people hate the banks right now and
it seems like a cash-cow industry that one could really disrupt. However,
banking has a lot of competitors including not-for-profit ones in the form of
credit unions. It will be very difficult to offer higher rates, better
service, etc. than a non-profit credit union while one is trying to make a
profit.

However, if I were BankSimple and you said what you and I have said to me, I'd
respond that banks are crap at IT. I'd say that we (BankSimple) are basically
a better IT department for your bank. We're going to create a banking
technology stack that you'll enjoy using while getting you better rates than
the large banks (BofA, Chase, etc.) offer you and better terms (like ATM
refunds). We're going to do this by using wholesale banking offers from FDIC-
insured institutions.

Will it work? Maybe. I'm skeptical. Refunding ATM fees and better terms are
going to eat into margins a lot. The wholesale bank is going to take their
margin. That doesn't leave much for good rates. Plus, some banks are starting
to get good at IT. Wells Fargo and Bank of America have deposit-scanning ATMs.
Chase has an iPhone app that lets you scan checks. When it comes to terms, I
already have a bank that offers me 0.55% checking and 1.25% savings with ATM
refunds.

It isn't an easy road for them, but what they're trying to do is create a
better technology package for users. That might mean making a card that can do
both credit and debit in one card - I've wanted that. That might mean NFC
payments faster than banks will support them. That might mean better Mint.com-
like tools than Mint. That might be the plainer, easier to understand language
they're pushing.

And, even if they don't completely succeed with a retail venture, they might
end up with a great OEM package for banks and credit unions to outsource their
web and mobile technology stack to. Most small banks do outsource their
interfaces and BankSimple might be creating the best OEM package for small
banks (if/when their retail ventures fail) inadvertently in the process. I've
seen plenty of banks with horrid web interfaces and very few allow for check
scanning on either desktop or mobile. BankSimple could do well in the OEM
market even if it fails to convince consumers of its retail ambitions.

/just to clarify, I'm not affiliated with BankSimple, it was just a pleasant
way of phrasing that paragraph.

~~~
Zev
_Chase has an iPhone app that lets you scan checks._

Only for small amounts. If the check is for a large amount (over $750? I'm not
sure exactly what the limit is), the app will refuse to let you scan it in and
tell you to go to a branch instead.

~~~
jtheory
I imagine they also have a bank-by-mail option, which (I find) is useful if
you don't go near your branch normally anyway and don't care about a few days
delay in your deposits.

True, it'd be nicer to scan in the check (and not have the mail delay) but
it's not a huge pain point for me to drop the envelope in the mail; so I
haven't been to my bank's branch in 5 years.

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steve_b
I've always wondered why after winning something (or in this case, getting 50k
sign ups), people say "I'm humbled." I think the truth would be the opposite:
"Wow, looks like I'm pretty awesome after all."

~~~
edash
<http://en.wiktionary.org/wiki/false_modesty>

~~~
gbog
Yes, and it becomes to be a kind of cliché here and around. We could list
them. Years ago we had the "X reasons to" lists, now we have "I'm very humble
to be the best". It is a "preciosity" (not sure if this word applies correctly
in English, I need to read Les Précieuses Ridicules, Molière, in English to
make sure). Really intersting guys like PG do not usually have these
preciosities themselves, but it is something that flourish during interesting
times (like was Molière's).

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RexRollman
BankSimple sound interesting but they will have to be offering something
really awesome for me to even remotely consider doing business with a
commercial bank ever again. (There days, I only deal with credit unions.)

~~~
jonprins
They themselves aren't a bank. They partner up with banks that provide FDIC
insured products. They just provide the customer service and the user
interface.

~~~
r00fus
This may sound like a perfect match, but honestly most banks can't be trusted:
<http://www.amazon.com/Best-Way-Rob-Bank-Own/dp/0292706383>

BankSimple, not being terribly large, can't force the incumbents to play their
game (like say, Apple could with AT&T to some degree - and they got lucky
getting in with Cingular).

It will be interesting to see how this fares when the "financial service"
supplier(s) starts yanking the chain.

~~~
mseebach
What exactly would the chain-yanking look like? "Make your online banking
suck!" "Charge random fees in an opaque manner!" "Make your customer service
worse!" ?

And if they do have their chains yanked, they can switch their provider. It's
not like banks have "coverage" to lock you in, like mobile networks.

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bluegene
In traditional banking, UX is an afterthought but from what I see, for
BankSimple, banking takes the backseat but UX rules. I say this coz there's no
details on FDIC, interest rates, etc. IMO, instead of doing Banking; they can
sell their product to banks

~~~
fossuser
"BankSimple account plus BankSimple debit card replaces your existing personal
bank account. Make deposits, withdraw cash, pay bills, earn interest, and
more.

However, BankSimple is not a "bank." We partner with chartered banks who
provide FDIC-insured products, leaving us free to concentrate on designing the
complete consumer banking experience, via the web and your smartphone. "

------
olivercameron
If any industry was waiting for a startup to come along and revolutionize it,
it's the banking industry.

~~~
dublinclontarf
That's already happened you didn't notice (yet), it's called bitcoin.

~~~
nzadrozny
You _might_ make a case for "happening" with bitcoin, but the banking industry
is far from "revolutionized" in the past-tense.

Besides which, currency and customer support are two very different pieces of
a much larger pie. At best, currency is the "implementation detail" behind a
much larger set of day-to-day usability concerns inherent in banking.

~~~
dublinclontarf
Well given that just with the bitcoin client alone many banking services are
either no longer needed or already provided by the bitcoin network.

Savings, transfers(much faster than any bank transfer, I mean my bitcoin
reaches it's destination before I can finish filling in the bank transfer
forms), security. All there.

I don't need customer support when there's no problems. I've never had
something so easy to use to buy on the internet before.

~~~
philfreo
I'm not discrediting it's future potential, but the number of things which you
can buy with bitcoin right now is _extremely_ limited

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uniclaude
This sounds great. Props to them if they can disrupt banking. The fact that
they're not a real bank but some entity that works with partners to provide
FDIC insured products is reassuring from a customer point of view. Not sure
about how they will do their marketing though. Now, I hope that we, non-
American customers, won't have to wait too long for this service.

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Aloisius
Wait. I think I get it now. They're like mint, but with account management?

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achompas
I'm pulling for BankSimple's success thanks to the abysmal nature of banking
customer service. Hidden fees, long wait times on phone calls, ATM fees,
ridiculous procedures to dispute charges...

With that said, how is BankSimple anything but a middleman? In my eyes, they
fill one of two potential roles:

1\. They're a customer service wrapper for banks, which means banks pay them
to provide support. So banks are their customers, right?

2\. They actually manage your money for you---a "broker for personal
accounts." How do they generate revenue in this case?

#1 and #2 are both problematic. In a way, I'm the opposite of Aloisius: I
clearly see BankSimple's benefits (Mint + support + SmartyPig), but I cannot
understand how they will generate revenue while staying loyal to customers.

~~~
al3x
I'm BankSimple's CTO. To your points:

1\. We're more than a "customer service wrapper". We don't license our
technology or outsource our support staff to other banks. Banks are our
partners, not our customers, and we only partner with a small number of banks
who share our values and are willing to set aside things like fee revenue to
work with us. We have a symbiotic relationship with those banking partners: we
bring them deposits, and they make loans on those deposits and share the
resulting interest margin with us. That is one of several sources of revenue
for us, but not our sole source of revenue.

2\. If customers like the way we help manage their money, we're able to
connect them to a variety of financial products that are mutually beneficial
to our customers, our banking partners, and to us. As above, our banking
partners are happy because we're bringing them new customers for various
financial products, many of which have a decent margin on them (CDs, for
example). We share that margin with our partners, and that's another source of
revenue.

Our business is all about aligning the interests of the banking industry with
the interests of our customers. Where we can create that alignment, we profit.

~~~
pasbesoin
I may be a corner case, but I suggest you https your entire site. I have my
browser set to alert upon transitioning from https to http, and the alerts
quickly become annoying while navigating your site.

That aside, I'm one more hoping you can bring some sanity, on behalf of the
consumer, to this market.

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jimktrains2
So, this prob isn't the place, but instead of cards or short range radio, I
thought plugging into headphone jacks and having the phone do transactions
(akin to what short range radio would do). Doesn't require any modification to
phone and is backwards compatible with almost all phones (that have their won
sdk (Symbian, iOS, Android, RIM) or use J2ME or BREW.

I wouldn't be able to bring this up myself (I just do code, hardware and
banking is beyond me at times), but I would never object to being included
with people who could:-D

Anyway, ::shrug::, just thought I'd place the idea out there since I feel it's
good and like to see someone do it.

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oofabz
What's the big deal about BankSimple? They look about the same as most credit
unions. My credit union has a good website & iPhone app, and doesn't charge
hidden fees. They pay interest on my checking account.

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zitterbewegung
Is it just me or does it seem sort of odd that they don't mention the FDIC
anywhere on the page (whether they will be insured) You can't advertise that
you will be FDIC insured?

~~~
eridius
See the FAQ (<https://banksimple.com/faq/>).

> Will my deposits be insured by the FDIC?

> Yes, all deposits will be insured to the FDIC limit (currently $250,000)
> through our partner banks at launch, just like with any other major bank (or
> credit union through the NCUA). FDIC insurance guarantees the safety of your
> deposits.

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pbreit
I think BankSimple is going to struggle to find customers with its current
proposition. The fact is that people are not as unhappy with their banks'
fees, customer support or websites as BankSimple thinks (or at least
suggests). People like branches and brands. The one thing people do like is
products which is how ING broke into the business but an approach that
BankSimple appears not to be pursuing.

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strlen
The use of the phrase leaning into it is highly appreciated.

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evo_9
Interesting idea. I wish it were 'MortgageSimple' though - the mortgage
industry is in serious need of an overhaul even more than banks right now.

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truthseeker
I am surprised that so many people are willing to open a bank account with
someone you've never heard of. I couldn't even find if they are FDIC insured.

I know several friends who wouldn't use mint.com. For them, it is a single
point of failure. You can explain all the technical details you want but there
is no way to get past their fears.

When shit hits the fan, you can expect the US govt. to bail out Bank Of
America. SimpleBank? I am not so sure.

~~~
jonprins
It's right on their page. Under 'Find a new alternative:'

"However, BankSimple is not a "bank." We partner with chartered banks who
provide FDIC-insured products, leaving us free to concentrate on designing the
complete consumer banking experience, via the web and your smartphone."

~~~
RexRollman
I hope that never leads to a "hot potatoe" situation when there is a problem.

~~~
lotusleaf1987
FUD.

~~~
owenmarshall
Sure, it _might be_ fear, uncertainty, and doubt on the part of adopters. But
rightly so -- if there's one place where people are going to be conservative,
it's with their banks.

The very first thing I did when I hit BankSimple.com was CTRL+F "FDIC". One
tiny mention in a blog preview 2/3ds of the page down. That doesn't cut it.

It's BankSimple's job to inspire confidence in their offering. Their front
page seems to spends more time talking in vague terms about how their service
is going to be mobile centric, and how they're going to put me first. What
their service is all about, and how it works -- the things I care about -- are
buried and quite vague.

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joshfraser
Judging by the IIN of the card in the picture it looks like they are using
Visa behind the scenes.

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DanI-S
I'd love to see someone like this be the first place to seamlessly incorporate
a Bitcoin exchange into personal banking.

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hvass
Competition is always good!

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reftvfds112
Poor site design. I can't read the vision statement. White out. Fixit. Simple

