Your Second Wake Up Call: Accounts With No Overdraft Fees Ever!

This is your second wake up call.  In June, we reported on releases by the Pew Trust on overdraft fees and the wide coverage the issue continues to receive.  Yesterday, a front-page USA Story on “Beware of Large Fees for Overdrafts on Debit Cards,” continues the drum beat to consumers.  It references a just released and accurate study by the CFPB : Data Point: Checking Account Overdraft.  The study documents what bankers know that overdraft fees are paid largely by heavy users who have opted in.  The story was also picked up and ran in Business Week, Reuters and the American Banker.

Can you hear the message growing in clarity and volume?  After heavy press and media coverage for years, many consumers are motivated to seek no overdraft fee accounts.  The CFPB is preparing to take action to put curbs on these fees.  For some customers, banks today offer a service desired and used, and we applaud that.  But from most customers, banks offer no option of an account with no overdraft fees.  Please rise to this second wake-up call to reap great benefits from offering “no overdraft fee ever” accounts to grow accounts, relationships, revenues, payment relevance and improved regulatory compliance.

Your Second Wake Up Call

Don’t argue that consumers can avoid fees by just managing their accounts.  The debit card is winning the day for you, but consumers can’t keep track of balances and settlement with a debit card.  Don’t argue that the overdraft fee protects consumers from merchant return-check fees.  Many today, and particularly Millennials, have never paid a merchant in their life with a check.

Do define a strategy to market “no overdraft fees ever” in front of your branches and see traffic like you have not seen in recent years.  Do offer both a full service account and a debit-card only account with no overdraft fees ever.  Do offer automated alternative lines of credit to meeting most consumer needs better than overdrafts just as PayPal’s BillMeLater provides (now called PayPal Credit).  Do provide it in a “payments” branded package that is “better than PayPal and prepaid,” and configured not to cannibalize any of your existing revenues.  Do look at how PaySound^®can accomplish your objectives in a turn-key package!