Small business cash flow solution provider Kabbage unveiled its Kabbage Checking offering today. The new business checking account is designed to give smaller businesses the “capabilities, convenience, and security” of traditional business accounts, while sparing them “monthly fees or friction.”
The accounts charge no opening or maintenance fees, and do not require minimum or daily balances. At present, Kabbage Checking offers 1.10% APY, which is paid out monthly. The company states this is among the highest interest rates available for a business checking account.
Kabbage Checking accounts come with a Kabbage Debit Mastercard, support electronic billpay, and provide access to free ATM access via a 19,000-ATM national network. Account holders also can create up to five e-wallets to help manage spending and savings. The new accounts can be used with other Kabbage solutions such as Kabbage Insights for daily cash flow analyses and forecasts, Kabbage Payments to accelerate settlements and avoid cash flow shortfalls, and Kabbage Funding, which helps account holders avoid accidental overdrafts. Additional features, including wire transfers and mobile remote deposit, are expected to be added later in the year. The accounts are issued by Green Dot Bank, and are insured up to $250,000.
“We believe in the businesses too often left out, overlooked and underestimated,” Kabbage President Kathryn Petralia said. “Kabbage Checking is a new banking service built to give those small businesses an upper hand to earn more, save more, and grow their business faster without sacrificing anything they expect from a bank.”
Kabbage has been one of the more active fintechs in terms of helping small businesses during the current COVID-19 pandemic. The company approved +209,000 small businesses for $5.8 billion as part of the Paycheck Protection Program, making Kabbage the third largest PPP lender in the U.S. by application volume. This feat, according to Kabbage CEO Rob Frohwein, was a large step for the company, and perhaps an even greater one for fintech writ large.
“The PPP validated the criticality of FinTech,” he said in a statement earlier this month. “Most of the small businesses we reached would have been ignored had this crisis taken place just 10 years ago. These businesses can only be served in mass by an automated platform that places need in front of privilege and levels the playing field that has too long been unequal in our financial system.” He added that fintechs increasingly will be the solution provider of choice, as more small businesses migrate toward these newer companies instead traditional banks “when seeking even the most basic financial services.”
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