Retail bankers, we’ve had a sighting of that very rare bird, the North American Newfee. It was thought to have gone extinct in the fall of 2011, when anti-bankers shot down the last breeding pair, a malformed $5 debit card fee at Bank of America.
But surprise. Regions Bank has gone out on a limb and put a fee on the newest banking feature to sweep the nation, remote check deposit. And the bank didn’t settle for the standard per-use fee (in trial at U.S. Bank), Regions got creative with a tiered price dependent on how fast you want the money (see note 1 for exact wording):
- Immediate >>> 1% to 3% of check amount, with $5 minimum
- Same night (8 pm cutoff) >>> $3 per check
- Two days >>> $0.50 per check
There is also a potential $1 additional fee to temporarily raise your daily deposit limit to deposit a large check.
My take: I think Regions is smart to add fee(s) for the huge value mobile deposit delivers, though I think it would be better as part of a feature-laden bundle sold on a monthly subscription fee (note 2).
But tiered pricing is a novel idea worth trying. And I like the three options. But its probably too complicated for new users, at least the way it’s presented in Regions FAQ (note 3). Also confusing matters, is the extra buck for checks larger than the user’s limit. It’s asking a lot for customers to decide among three options, especially when having to decipher jargon and timing rules such as "Funds are available during posting."
The multi-choice pricing scheme is an example of the paradox of choice. A theory (and direct marketing rule of thumb) that says you should keep choices to a minimum otherwise recipients become overwhelmed and just give up.
I think the bank would be better off starting with just two tiers, normal and expedited. Then introducing the third tier in v2.0 next year.
But overall, congratulations to Regions for braving the unknown to see if this newfee has wings (note 6).
1. Here’s how the fee is explained in the FAQ:
A somewhat better explanation is included on the mobile banking page:
2. For more info on fee-based banking services, our Online Banking Report on fee-based online services (subscription, May 2011).
3. Hopefully, the choices are better explained within the mobile user interface, which I was unable to see.
4. As expected, the initial reviews from Apple app users are harsh. Currently the bank has just a 1.5 star rating on the new version of the app containing mobile deposit. Down from 2 stars previously.
5. Sorry for the prolonged bird metaphor. Sometimes you get bored at the keyboard (keybored?). It’s also our second bird-themed post on fees. What’s that about?
6. American Banker: http://www.americanbanker.com/issues/178_66/regions-offers-mobile-deposit-for-a-fee-1058090-1.html?