- Reuters highlights how ReadyForZero benefits those in debt.
- Advise.me partners with Xero.
- Braintree continues rapid growth — now processing $10 million daily.
- doxo adds AT&T as a biller and launches new feature.
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Digital ebill storage and payment startup doxo announced an important new feature to its service today, the ability to automatically pay ebills that fall within preset maximum values. For example, as long as my family’s wireless bill is under $250, doxo will automatically pay it and send me a confirmation message. If it’s more, I get an alert advising me to take a look at my bill before it’s paid.
That feature would have saved me more than $1,000 two years ago when I gave an old mobile phone to a new employee without thinking to upgrade the calling plan. I ended up paying $400 to $500 monthly bills for several cycles before I noticed it on my credit card statement. I was using estatements (which I never look at) and had no idea the charges had mushroomed from the $40/mo I’d been paying.
Doxo also announced the addition of AT&T to the service, perhaps the biggest biller in the country, with nearly 100 million accounts. That should provide momentum that hopefully leads to more major billers supporting the platform. The only other national biller currently participating is Sprint.
Bottom line: Payment limits should help convince more consumers to enjoy the convenience of autopay, while still maintaining the control/peace of mind they are accustomed to when paying manually.
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Notes:
1. Doxo added payments in February this year (see post) and demo’d at FinovateSpring 2011 (watch video here).
2. Hearst-backed Manilla is another ebilling & filing contender, with an interesting partnership with Citibank that could jump-start its service.
3. See our recent Online Banking Reports: Paperless Billing and Banking and Email Banking: Revitalizing the Channel, for more info.
The debit card fee debacle was an interesting drama to watch. I’m sure there are lots of lessons here for a future biz school case study. But really, was $5/mo for a service that many consumers use daily, such a big deal that even Obama had to call BofA out? We spend two or three times that each month on extra pizza toppings alone, but I don’t see anyone bad mouthing the pepperoni industry.
While it’s clear in retrospect that BofA should have played this differently, rolling out the price increase gradually for instance, or upgrading its debit card product at the same time (note 1), the bank was at least being up-front with its pricing and reasons.
And the whole episode is not just a loss for BofA, but for the whole industry, as one its most popular products is turned into a regulated utility with Durbin controlling prices on the merchant side and public opinion squashing fees on the consumer side.
Here’s the winners and losers from BofA’s capitulation on debit card fees:
Losers
Winners
Mixed
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Notes:
1. We recently looked at optional fee-based services banks could build using remote banking value-adds. See our May 2011 Online Banking Report (subscription).
2. I’m not predicting layoffs. Honestly, I have no idea. There are way too many factors at play to make a direct connection. But certainly, the one-two punch of interchange price controls combined with the fee backlash, make cost cutting seem the more palatable course of action to improve profits. And to the extent that smaller players pick up incremental business, they could hire a good chunk of those laid off.
Last Thursday, online debt-tracking startup ReadyForZero launched several significant new features:
- Expanded coverage beyond credit cards; now all loan types can be linked (auto, mortgage, student).
- Improved how users monitor debt payoff and added the ability to increase the payment amount to speed up the process (see below).
3. Added actionable advice and activities to keep users focused on goals.
More developments, such as increased automation and better financial options, are expected in the weeks ahead.
Yesterday, e-gifting platform CashStar announced that it raised $12 million in Series C financing:
“The funding will be used to help drive continued adoption of digital gifting and grow CashStar’s retail brand network. Mandarin Oriental Hotel Group is another brand that has just partnered with CashStar to offer consumers a more personalized way to gift and incent.”
There is a bit of a media frenzy going on right now about the idea of consumers cutting the cord to their bank (or DVD rental company) due to new fees and/or price increases. There are even t-shirts (see inset), a sure sign things are getting a bit crazy.
Within the industry, there’s been much debate over whether consumers will actually act upon their frustration and move accounts to “main street” banks and credit unions.
Certainly some will (see update). One of our young employees just did, thanks to the debit card fee. You probably know someone that has too. And most likely, it’s someone with relatively simple finances. Because those of us with more complicated situations brought on by marriage, children, home buying, car buying, credit card usage, business ownership and so on, face a daunting lists of tasks to move our accounts (see below).
While millions will change banks to lower checking costs, most will stay put because they are satisfied overall or they simply want to avoid spending a good part of a Saturday going through the tedious switching process. Tools designed to ease the pain, such as Deluxe’s new SwitchAgent, can help (see screenshots from FreeStar Bank below). But it’s still a painful process (just look at that last worksheet), even if you have a friendly helper on the phone providing moral support and making calls on your behalf.
This doesn’t mean you can ignore customer needs, or tack on new fees willy nilly. Because eventually you are going to need new customers, regardless of how lethargic your existing ones are.
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Switching a checking account in 1987
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In the old days (like back when I had simple finances), all you had to do to switch your checking account was:
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Switching a checking account in 2011
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In addition to the above (you might be able to save the trip to the branch if full online account opening is offered), today’s wired consumer must also do the following:
And repeat the whole process if you also have a business checking account you want to move at the same time.
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Update (28 Oct): Raddon published an article today showing no change in the number of consumers saying they closed an account (during the past 12 months) in 2010/2011 compared to 2005/2006. The closure rate in both periods was 9%.
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Freestar Bank is running a large switching ad on its homepage (one of five in rotation)
SwitchAgent landing page (link)
Note: Switching service is powered by Deluxe’s new SwitchAgent program that handles the heavy lifting for a reported $60 per switch
Downloadable form to be filled out before talking to the SwitchAgent (link)
Note:
1. Fee-H8R graphic tees available from CUNA here.
2. We write about these issues and much more in our subscription service, Online Banking Report.