How To Profitably Help Your Customers Avoid Overdraft Fees

More mobile apps and electronic banking tools as well as alternative banking products help consumers avoid overdraft fees as highlighted in the WSJ article, “Banking Apps Help Consumers Avoid Costly Overdraft Fees?” 

 Does your bank want to help your customers avoid overdraft fees?  If you’re smart, your answer is yes for three reasons: 

1) The vast majority of overdraft fees come from customers who want the service and not avoid the fees, 

Offering tools to help consumers avoid overdraft fees will not hurt materially your overdraft revenues.  The majority of revenues come from consumers who willingly and knowingly overdraw and are pleased to have the service.

2) Other customers who want to avoid overdraft fees will reward you with accounts and other revenues if you give them an alternative, 

Few in any banks today market services or accounts to avoid overdraft fees.  Yet non-banks and prepaid cards are experiencing a growing bonanza offering “no overdraft fees ever.”  It is time to provide a banking alternative.

3) Your customers pay more to others today for small loan alternatives than you earn in overdraft fees.

You need to provide a safe, automated and profitable small dollar loan alternative to overdrafts.  Consumers today spend more with these growing alternatives such as PayPal’s BillMeLater, Lending Club, and other merchant or loan options than are paid in overdraft fees.

How do you capitalize on this opportunity?  Our clients recommend the turn-key program called PaySound.^®