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.
So much of the banking decision for me is based on how well the bank gets out of my way, low fees, and high interest rate. My current bank manages the last two perfectly well, has excellent customer service, and the few issues I have with the web presence are minor.
Josh mentioned that they won't be targeting the absolute rate chasers, but that they will be providing an experience that changes everything (my words, not his). I'm skeptical, but I've been surprised by plenty of other startups. I'm sure there's innovation to be had in the banking industry, I just don't know how much of a draw that innovation will end up being.
Unfortunately every time I look at their site I don't see much that I don't get out of my current bank and my email conversation with Josh was heavy on the criticism of my current bank but light on exactly WHAT they are doing wrong. So for now I'll have to ride the hype with everyone else and just see what comes out.
Credit unions generally have disproportionally high overhead due to their size, and their rates are not great lately because of the corporate CU collapse. CUs face 38 basis points of assessments for the next two years to pay for the corporate bailouts.
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.
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.
I always recommend them to people because they pay my banking fees, are insured, ethical/reputable, pioneered the discount brokerage, and have great 24/7 customer service. They've helped me out of numerous jams over the years.
Do you mean Charles Schwab is the "good alternative" or the "consumer-hostile bank"?
And the Schwab checking account isn't half bad either.
It is now serviced by FIA Services, no longer available to new customers, and of course terms and conditions are subject to change. So far, nothing has changed, but still, the point is that this card was and is an anomaly.
Aside from that, it's identical.
And it doesn't change the fact that Schwab put together the terms of this card (certainly with the help of FIA) and that a more traditionally mainstream bank has not.
I also have the British Airways Chase card that literally has netted me a free Biz Class ticket to Europe. Very generous. But that's a signing bonus. If I were to keep this card as my daily-driver for a couple years Chase would make a lot more money off me than Schwab ever would've off the card that's now the "FIA Cash Rewards Visa"
Eligibility description here: https://www.usaa.com/inet/pages/why_choose_usaa_eligibility_...
In short, no surprise fee's and simple online banking (with extensive mobile support).
- The plain simple language bullet admits that of course there will always be legalese
- Real support. I've never had trouble at any hour getting a human being on the phone, empowered to deal with my issues. Facetiming or Skyping with my bank? I really don't see the point.
- Mobile from the ground up - Chase has great mobile apps that allow you to deposit checks by taking a photo. I believe other banks do as well and it seems like this will probably be pretty standard going forward.
- No fees. In four years I've been hit with a surprise fee once. It has been resolved.
"We provide access to the largest fee-free nationwide ATM network and our mobile app will locate an ATM closest to your current location." Not sure what that network is but is it more ATMs than Chase or BofA or Wells Fargo have?
That's gotta be Allpoint. They run nearly all of the non-bank ATMs (Think: 7/11, pharmacies, gas stations). ING Direct has the same deal: http://app.ingdirect.com/atmlocate/index.html
That's actually a significantly worse deal than the banks and credit unions that refund ATM fees (to a point) so you can use literally any ATM on any network.
2) just because you don't have those problems doesn't mean that others don't. in the past 4 years, i've probably hit upon each of those problems. perhaps they aren't enough of a pain point for me to switch away from my bank, but they're valid points nonetheless.
3) their ATM network is the largest because its any ATM (i believe, based on what i've read). use their card in any ATM and they waive all fees. this exists in some other cards already, though usually in a limited capacity (my HSBC card waives the first 3 ATM transaction fees iirc)