Posted in: Business

Online Banks Stealing Customers From Big Banks [Study]

Perkstreet

Fed up with your current big banks new debit card and other monthly fees? Perhaps now would be a good time to try out online banking.

According to ThirdAge:

“Banks such as PerkStreet Financial saw twice as many new customers sign up Friday, days after Bank of America announced they would charge $5 for using debit cards.”

Banks such as PerkStreet often have far better terms than traditional banks, for example PerkStreet only requires a $25 minimum deposit and their debit card not only doesn’t cost anything, they provide perks such as free coffee, music and even cash (2% back) when users earn points from their debit card use.

Other online institutions offer higher variable interest rates on accounts because their cost of operation is less than traditional brick and mortar banks which pay maintenance fees on their buildings while staffing a large employee base to operate their various locations.

If nothing else the online banking system is slowly proving that big banks crying about overdraft protection and debit card swipe fee laws simply don’t know how to create a profitable business structure in the age of digital banking.

There are of course some issues with online banks, such as the inability to easily deal with paper checks and customer service related issues as more customers continue to join the online banking sector as those online banks are rushing to add more employees to their call centers.

Do you think online banking will continue to grow as large banks alienate customers with an ever increasing number of banking fees.

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Comments

2 Responses to “Online Banks Stealing Customers From Big Banks [Study]”

  1. Jay Gould

    All of these new fees that BofA and the other big banks are introducing are in response to the reduced interchange revenues from debit transactions that resulted from the Durbin Amendment. Frankly, I don't blame them. I mean, if the government decided that a large chunk of my income should be collected by someone else, which in the case of the Durbin Amendment are the retailers, I would look elsewhere for ways to increase my revenues.

    We've been repeatedly warning, ever since the debit interchange limit was first proposed, that it was ultimately going to hurt consumers in the form of higher fees and that is exactly what is currently taking place. http://blog.unibulmerchantservices.com/banks-discontinue-debit-rewards-programs