NEO Credit Union

Green Dot recently launched a new type of FDIC insured DDA that is opened and fully serviced on a mobile app.

The app includes a savings vault that allows customers to move money into a savings account without gaining access through the debit card, bill pay which includes P2P payment capability, and an ability to easily load funds through direct deposit, RDC or cash at Walmart locations. The Fortune Teller budgeting tool provides point-of-sale advice on the impact of a purchase on the customer’s budget.

The account will charge $2.50 per ATM transaction for out of network ATMs, a 3% foreign transaction fee with the debit card, and $9 to customize the card design. Overall, Green Dot expects four revenue streams from the product: 1) Debit interchange income (the firm has less than $10b in assets, so no rate cap); 2) Service fees; 3) Float on deposits; and 4) A voluntary monthly fee of up to $9 (no, I’m not joking).

GoBank will target consumers with less than $100k income, does not plan to add a credit product, and does not think the new offering will cannibalize its GPR business.

My take: GoBank represents a new type of product in the market, which, for lack of a better name, I’ll call NeoChecking Accounts.

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Back in August 2011, I published a post here titled . A bank exec had tweeted “Just wait til the MovenBank / BankSimple wars….” which I took issue with. At the time, my perspective was:

“One day Movenbank and Banksimple may very well be rivals at war. But for now, the two firms are better off collaborating than fighting. The two firms have to educate consumers on what a new type of bank is, will be, or could be. They have to build demand for the new type of bank they’re building. Which is, of course, no easy feat.”

I wasn’t thinking clearly (no smart-aleck remarks).

It isn’t just the new type of “bank” that the firms have to educate consumers on, it’s a new type of product.

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