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BankSimple: We have cards

banksimple.com

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Re: BankSimple: We have cards

#31

Post by mdasen »

Aloisius wrote: post #2

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.

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.

Re: BankSimple: We have cards

#32

Post by 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.

Re: BankSimple: We have cards

#34

Post by olalonde »

Aloisius wrote: post #2

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.

The fact that it's a tech startup? Seriously, any startup that aims to disrupt our stagnant banking industry has my support.

Re: BankSimple: We have cards

#36

Post by mahyarm »

orijing wrote: post #26

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 pro…

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.

Re: BankSimple: We have cards

#37

Post by ronnoch »

steve_b wrote: post #9

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."

In some ways the more awesome you are the more humility you have to signal, to avoid seeming arrogant.

Re: BankSimple: We have cards

#38

Post by younata »

WettowelReactor wrote: post #27
Aloisius wrote: post #2

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.

Agreed. usaa.com already addresses all of these pain points.

USAA is also available only to members of the military and their families (they've been getting more lax over the years, though).

Re: BankSimple: We have cards

#39

Post by olalonde »

r00fus wrote: post #28
olivercameron wrote: post #4

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

The industry isn't just "waiting" they are actively suppressing the revolution. They know that once you get an upstart with lots of momentum, it could derail the racket they have going on right now. Good luck to BankSimple... it'll be interesting to see how this turns out. For me, USAA is quite adequate for the time being.

> The industry isn't just "waiting" they are actively suppressing the revolution.

With some help of legislators ;)

Re: BankSimple: We have cards

#40

Post by 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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