The recession may not have been the cause, but it clearly changed the face of American banking. A mass exodus away from big commercial banks has sent smaller community banks, credit unions and internet banking soaring to heights never before imaged. Account holders were swept away by higher monthly service charges and an a la carte list of service fees that would make even the airline industry envious as banks sought ways to increase the billions of dollars each year collected from customers for routine overdrafts.
Internet-only banks offer an unique alternative for customers who are computer (or mobile device) friendly and have little need to visit a bank teller. Internet banking is not a new concept, but there is at least one new player in the industry that is rewriting the rules about personal banking, including the complete elimination of monthly service fees, overdraft charges and a host of other fees generally associated with a trip to the bank.
Go Bank, the brainchild of 28-year old entrepreneurs Sam Altman and Alok Deshpande, launched in June 2013 as a no brick-and-mortar bank offering traditional checking, saving, bill pay and debit card services. What makes Go Bank different from other online banks is that the monthly service fee is set by the customer. Yes, you read that correctly. The customer decides how much they want to pay for the bank service each month ranging from zero dollars to a maximum of nine dollars each month. There are no other significant fees other than a small charge if the customer would like a personalized photo to be their debit card face design.
I decided to try the service for myself. Creating an account was extraordinarily easy and took less than five minutes to enter the basic personal information needed to open an account. I then needed to select a debit card design. I opted to pay the $9 feel for a personalized card, so after uploading a photo of my choice, I was finished in less than 10 minutes total. I could have chosen for a selection of standard debit cards for no fee at all. It was amazingly simple.
The last thing that needed to be completed was making my initial deposit. I made a transfer from another debit card for ease of completing it, but there were a number of other choices including making a transfer at selected stores with cash or mailing in a check or money order. Now that the account is established, there is a mobile app available to scan checks for automatic upload and deposit.
Americans paid $32 billion in overdraft fees in 2012, according to Go Bank general manager Alok Deshpande. He said that is overly excessive and Go Bank has eliminated them at its bank. According to federal reports, banks like Bank of America, Wells Fargo and U.S. Bank earn billions from service charges against account holders, most of whom are those least able to afford such fees.
Ease of use is the key element in attracting online banking customers. The Go Bank web site and mobile app are designed to make banking a simple step-by-step process. Whether it is depositing a check or paying a bill, the task can be completed with a few keystrokes. Bill payment services also are free and simple to use. Unlike many big banks, Go Bank designed its bill pay program to allow the customer maximum flexibility to change payment dates without multi-day advance warning.
This is no fly-by-night operation. Like other banks, accounts are insured by the FDIC and governed by the Federal Reserve and has no government reported operational difficulties since inception. An enormous network of participating ATM machines allows easy cash access when needed.
Overall, it appears Go Bank has truly embarked on redesigning banking for the average customer. There is no trend towards free checking accounts re-merging fact, the contrary is true. But, Americans have options when it comes to banking, at this is one option that deserves a closer look.