[HN Gopher] Square Banking
___________________________________________________________________
Square Banking
Author : elvinyung
Score : 252 points
Date : 2021-07-20 13:12 UTC (9 hours ago)
(HTM) web link (squareup.com)
(TXT) w3m dump (squareup.com)
| Spoom wrote:
| Given the issues that Chime customers have had[1], and the fact
| that this seems to be organized in roughly the same way (actual
| banking services are provided by a contracted bank at a
| distance), I'd be a little skeptical.
|
| 1. https://www.propublica.org/article/chime
| eweise wrote:
| Chime customers? Sounds like they've been closing fraudulent
| accounts.
| bdcravens wrote:
| Looking for a new business bank for the small reselling business
| I run with my wife, so I thought I'd sign up.
|
| All attempts are erroring out; signup endpoint is returning a
| 500.
| Bhilai wrote:
| Looks like they are having issues - https://www.issquareup.com/
| eggbrain wrote:
| While Square makes (more) sense to get into the banking game,
| I've noticed a lot of companies only tangentially related to
| finance doing similar things, and I wonder what it's indicative
| of:
|
| - T-Mobile offers an exclusive checking account for their
| customers
|
| - Credit Karma promoting their own debit card
|
| - Robin hood doing "Cash Management"
|
| - Coinbase offering a debit card with crypto rewards
|
| Has something changed with the ecosystem in the past 5 years? I'm
| half expecting NYTimes to release a banking/checking account
| these days where you get rewarded with newspapers.
| meltedcapacitor wrote:
| White label providers is a thing, there's only a handful of
| operators doing the actual banking/payment services behind
| that.
|
| The big change is probably that actual banks' brand value got
| damaged to the point that people trust banking services with
| random consumer brands stickers on them more than they used to.
| nerdponx wrote:
| I assume it's because being a bank allows you to invest the
| deposits and turn a profit.
| zonethundery wrote:
| Its a function of the stability of the bank partnership model
| and the success of baas apis like galileo, combined with the
| economics of debit interchange for institutions under the
| Durbin amendment cap.
|
| Partner banks get more deposits and use their fat interchange
| rates to attract the developers/promoters of new products.
| nsriv wrote:
| I don't know if anything has changed necessarily, but
| anecdotally I think the business model has been validated in a
| high profile way. Accruing returns on stored money (like
| RobinHood) has largely supplanted the wave of "fresh take on
| charging you transaction fees" model of Venmo and Cash App.
| selykg wrote:
| Everyone wants in on the game. There's this really big piece of
| the pie where fees and interest come into play. Every
| transaction has fees and some people carry balances that
| generate a lot of money in interest. It's how credit card
| providers can offer rewards.
|
| At some point in our future we'll probably see the end of these
| rewards cards because the government will likely regulate it.
| Which I think is actually a good thing, because it's the people
| with the least amount of money that are footing the bill for
| those of us reaping the rewards.
| misterprime wrote:
| There's also money in selling the transaction data, isn't
| there?
|
| That's one of the attractive things about the Apple Pay +
| Apple Card isn't it? I thought I read some time ago that
| Apple Pay anonymizes the card somehow so that transaction
| processors can't sell the data. It was for that reason that
| J.C. Penny stopped allowing Apple Pay as a payment method.
|
| Ah, here's an article from April 2019:
| https://www.mytotalretail.com/article/j-c-penney-stops-
| accep...
| [deleted]
| vineyardmike wrote:
| Banks are also sticky - people don't often switch them, so once
| you start, its hard and unlikely you'll move. That helps ensure
| your product stays in use.
| clintonb wrote:
| T-Mobile: helping the underbanked.
|
| The others: profiting from interchange fees. If you can get
| your card to be "top of wallet" you can get a cut of every
| purchase a consumer makes. If you are a store, like Target, you
| can also drastically reduce the processing fees you pay to card
| issuers by redirecting those funds to yourself.
| misterprime wrote:
| I self identify as middle class. It was pretty exciting when
| my wife and I both opened T-Mobile Money accounts and capped
| out their $3,000 balance for access to 4% APR. Even the 1%
| APR for additional funds is attractive, as far as a savings
| account goes, no?
|
| We also use the Target Red Card to save 5% at Target and the
| Amazon Chase card to save 5% at Amazon.
| kylec wrote:
| This seems like a promising alternative to Simple, which shut
| down a few months ago
| [deleted]
| circa wrote:
| Yes it does. I loved Simple and I can't stand the new BBVA app.
| its so awful.
| mattanimation wrote:
| Amen
| ww520 wrote:
| What has happened to Simple? I have seen their TV ad non-
| stopped for a while, then it stopped.
| hestefisk wrote:
| BBVA bought them in 2017 and killed it 3 years later.
| toomuchtodo wrote:
| PNC acquired all of BBVA's US banking business recently.
| tadfisher wrote:
| BBVA bought Simple in 2014, and killed us in 2021, so they
| kept us on for a good 6 years. I was honestly surprised
| they didn't do it earlier, such as when they axed the whole
| C-suite in 2017.
| yurishimo wrote:
| This isn't a consumer service; it's for business customers
| already using Square for payments and other business related
| expenses.
| 71a54xd wrote:
| Nope. I'm keeping Schwab for my banking needs. The last thing I
| need is a "bank" with more data about me than they really need
| and a lack of impeccable phone support.
|
| Unfortunately, it's probably going to take some time for people
| to realize the benefits of a "slow and inefficient" means of
| banking with lots of people in between. It sucks sometimes, but
| boy am I okay with it when they spot fraud or it takes someone
| days to empty my bank accounts instead of minutes.
| isuckatcoding wrote:
| RIP Chime.
| [deleted]
| mario_lopez wrote:
| I think we really have to take a step back away from this
| annoying scrolling / auto-moving element behavior for product
| info pages. I had a moment where my mouse was chasing a moving
| 'Loans' tile.
| tqx wrote:
| Often derided as "scroll jacking" or more politely referred to
| as "scroll snapping" it's being added to the CSS spec so likely
| not going anywhere.
|
| https://drafts.csswg.org/css-scroll-snap-1/
|
| Here I want to learn about the _features_ of Square Banking but
| I can 't do so at a glance, on the _landing page_ for Square
| Banking. The best solution is to just give up and search Google
| News for a summary:
|
| https://finance.yahoo.com/news/square-launches-banking-busin...
|
| https://web.archive.org/web/20210720152407/https://finance.y...
| mikepurvis wrote:
| Ugh.
|
| On the other hand, at least if it's in CSS, it'll be a single
| standard method that you can turn off via a browser plugin or
| whatever, rather than everyone rolling their own.
| madeofpalk wrote:
| This behaviour has nothing to do with scroll snapping.
|
| Scroll snapping is just "can i have a carousel without
| javascript", and is primarily a touch interaction. See this
| extremely brief demo
| https://codepen.io/tutsplus/pen/qpJYaK?editors=1100
|
| I wouldn't call Square's site "scroll hijacking" - usually we
| use that to refer to when the actual native scroll
| behaviour/events are highjacked and prevented, and custom
| javascript scrolling happens. Instead on the Square site the
| DOM page is still scrolling natively, but an animation is
| progressed depending on the native page position. Maybe not
| ideal, but its much smoother and less jarring than actual
| scroll jacking.
| SippinLean wrote:
| From TFA:
|
| > For instance, it is easy for a user to land at an awkward
| scroll position which leaves an item partially on-screen
| when panning.
|
| > To this end, this module introduces scroll snap positions
| which enforce the scroll positions that a scroll
| container's scrollport may end at after a scrolling
| operation has completed.
|
| Which is exactly what this page is doing.
|
| > primarily a touch interaction
|
| It's _exclusively_ a scroll interaction, whether the
| pointer event is the result of mouse or touch input.
|
| > the DOM page is still scrolling natively
|
| I'm not sure what you're trying to say by "DOM page." JS is
| reacting to the scroll position of the viewport. The user
| experience is the same.
| madeofpalk wrote:
| It might sound similar, but it's very different in
| practice.
| tqx wrote:
| Does this page enforce the scroll positions that a scroll
| container's scrollport may end at after a scrolling
| operation has completed, in practice?
| yuchi wrote:
| Sorry to disagree. The interaction you see in the page is
| not scroll snapping.
|
| With scroll snapping you the user have always control of
| the scrollable content. What you do not have control over
| is where it will stop scrolling. A similar behavior to
| forced guides in a movable element on rails (such as
| drawers).
|
| This page doesn't scroll at all, and uses the scroll as a
| time control for a "movie". And that is scroll jacking,
| as it hijacks the scroll position to do something
| completely different.
|
| This page, at least on mobile, is also guilty of
| implementing it in the worst way possible: without any
| alternative scroll indications and without smooth
| continuous transitions that make it clear that you are
| controlling the animation through the scroll.
|
| Apple is somewhat better at doing this since the
| scrolljacking procedure usually brings you to an element
| which, at the end of a glamourous entrance, actually
| scrolls away with the page.
| RulerOf wrote:
| I tried scrolling that demo with my mouse wheel and it
| "snapped" quite spastically down to 4. Even once I realized
| what the intended behavior was, it was still difficult to
| control: https://youtu.be/1A1c51GFGoc
|
| Seems to work as intended with the touchpad, to the point
| where it was hard to even tell that the browser was doing
| something different.
| ceiphr wrote:
| From my experience, scroll snapping is quite nice. On the
| mobile view of https://www.nytimes.com/, if you scroll down
| enough, you'll find an example of a scroll snapping row of
| opinion pieces.
|
| It is 10x better than scroll jacking. Scroll jacking is so
| repulsive to see anywhere you aren't using a mouse wheel.
| circa wrote:
| I feel like everything these days is "optimized" for mobile
| sites. When viewing on a desktop they all look horrible.
| burlesona wrote:
| Designers have gotten really carried away. This stuff looks
| nice when you click through it in Figma, because it's a
| slideshow. But when it's interactive it's a pain in the butt.
|
| If you move through the page really slowly it sort of works,
| but real people in the real world scroll fast to scan the
| content of the page, and this page is a disaster to scan.
| jbverschoor wrote:
| Yeah, another app-only bank. Or at least that what it seems. The
| desktop site in unreadable. Giant fonts.
|
| So I'll assume they're like the rest - shitty / no customer
| support outsourced to god who knows, and they'll change "shifts"
| every 10 minutes.
|
| No thank you, I'll stay with the good old, dinosaur banks.
| bdcravens wrote:
| After a really bad experience with Chase (and negative
| experiences with other big banks) I decided to try something
| different. I ended up settling on Capital One - they have
| branches, but depending on your area, it may as well be an
| online only bank.
| Navarr wrote:
| Capital One was an online-only bank before online-only banks
| were a big thing. It started as "ING Direct" before the sale
| to Capital One.
|
| I've definitely had some issues with customer service (not
| refunding a fee they said they were going to), but it's nice
| to have a "bank" with custom support
| fumblebee wrote:
| My experience with dinosaur banks (specifically HSBC and TSB)
| has been one of pure frustration. I can generally tolerate some
| friction in the system, but just dumb things like "to change
| your address we need to send you a letter that you need to sign
| and return to us" make using the dinosaur banks totally
| radioactive to me relative to using the new generation of
| fintech apps.
| JohnWhigham wrote:
| Yeah, I don't trust these startups handling my money. Not only
| that, but the bank that they have doing back-end services for
| them, Sutton Bank, seems like a tiny local bank. Guaranteed
| their own back-end services aren't in-house.
|
| Just no all around to this product.
| natchy wrote:
| Square is a public company. Not a startup by any means.
| typon wrote:
| Do they follow the SV "Move fast and break things" mantra?
| bdcravens wrote:
| Sutton has been around for 140 years.
|
| They issue the debit cards for Cash App. They also have
| worked with Robinhood (it looks like Robinhood may have moved
| on to JPM however)
| JohnWhigham wrote:
| I'm just saying how it looks. I'm not about trusting my
| money to a mom-and-pop-looking credit union that outsources
| everything, I want a powerful firm that does everything in-
| house and has robust security.
| bdcravens wrote:
| That's reasonable, but pretty much every business that
| manages money usually has a third-party bank behind the
| scenes (though many do use a big bank like JPM or WF)
| jliptzin wrote:
| I use Citibank for my business, I hear you, you can always go
| into a branch or pick up the phone to speak to a person, but
| their online banking system is pretty terrible and outdated by
| about 20 years which is why I often have to pick up the phone.
| I wish we could have the best of both worlds.
| imstil3earning wrote:
| Jeez this was hard to read with the annoying scrolling
| bawana wrote:
| just try getting customer service from cashapp...near impossible.
| gnicholas wrote:
| In case anyone was thinking this .5% APY savings account would be
| great for their company, this launch is just for sole
| proprietors.
|
| > _Your business entity type is a sole proprietorship, meaning
| you pay taxes for your business as an individual as opposed to
| another entity type (often the case for self-employed individuals
| or independent contractors)_
|
| They are apparently looking to add other entity types in the
| future.
| schleiss wrote:
| I'm curious about the small business loans. I'm from Europe and
| the animations suggests for a $9000 loan a total repayment of
| $10305. Let's assume you make $5000 in revenue per month and they
| use 10% as a repayment cut per transaction. That would yield a 20
| month long repayment schedule. The "interest" would be roughly 7%
| annually. In today's world, isn't that greedy? In today's world,
| Warren Buffet can issue a 0% coupon bond[1]. I'm just perplexed.
| Especially since it's Square and not Goldman Sachs or JP Morgan.
|
| According to the St Louis Fed, the average interest rate for
| Small Businesses was about 3.5 - 5% [2]. For me this sounds like
| an incredibly bad deal.
|
| [1] https://cbonds.com/bonds/698053/
|
| [2] https://fred.stlouisfed.org/series/EEBXSSNQ
| htrp wrote:
| In a word yes.....
|
| However, you don't account for credit risk whereas the st louis
| fed rates are based on existing bank small business loans which
| are very conservative.
|
| Presumably the expected defaults on Squares product would be
| very very high.....
| jvm wrote:
| 7% is a low interest rate for an unsecured small business loan.
|
| I'm not 100% sure what the FRED chart you cited means by
| "Effective Loan Rate for Small Business Administration" but
| those are most likely collateralized.
| schleiss wrote:
| I can't really tell. I haven't taken a loan yet.
|
| Let's just hope for all borrowers inflation remains
| "transitory" and growing, than it isn't such a big deal.
| alberth wrote:
| Did Square get a bank license or is an existing bank being used
| behind the scene?
|
| If Square did get a bank license - this would be interesting
| since now they have all kinds of regulatory requirements to meet.
| sdljfjafsd wrote:
| Square has an ILC: https://squareup.com/us/en/press/square-
| financial-services-b...
| danpalmer wrote:
| It's amazing to me how much of a better product can be created
| when everything is in one place.
|
| It's obvious that when you're charging customers and paying
| invoices through the same interface, that you'll have more
| visibility on your cash flow and it'll generally be easier to
| use, but this goes so much further.
|
| The reason those loans are easy is because Square know your
| history of charging customers. The reason they can pay
| "instantly" into your account is because they don't have to
| actually move any money until you pay out of your account, the
| reason they can charge no account fees is because they're
| charging at the point of taking payments from customers.
|
| The economics of the whole offering are far different to what the
| regular combo of payment service provider + bank + loan company
| can provide.
|
| Great move. Square has always been the sort of product that makes
| me wish I was in a business where I could use it.
| PeterisP wrote:
| I'm a bit confused about "the regular combo of payment service
| provider + bank + loan company" - from what I see (perhaps it's
| a difference between markets?), all that you describe is
| exactly what most commercial banks offer to businesses, they
| want to have it all in one place, they can make a better loan
| offer if they have your cash flows, etc. The main difference
| between them and Stripe is that a bunch of banks will not do
| the IT integration part of card payment processing but will
| only be the 'merchant bank' handling the financial part and
| settlement after e.g. some merchant gateway routes the
| individual messages, but they were offering the combo of card
| acceptance/accounts/payroll/loans/credit lines/etc decades
| before Stripe existed.
| fumblebee wrote:
| This is where fintech has been headed for some time -- a bundle
| of complimentary products all in a single app (payment provider
| + bank + loan company + crypto + etc.).
|
| Square are demonstrating this here for business, some Chinese
| finance apps went down this road years ago, Revolut are billing
| themselves as a "financial super app".
|
| There's tremendous advantage in having everything in one place.
| Each individual product can be 70% as good as best in market,
| but the value-add by having everything bundled in one place is
| huge.
| meltedcapacitor wrote:
| Sounds like the 1990s App Edition. (Remember bancassurance,
| universal banking, etc.)
| htrp wrote:
| Taken to its logical conclusion (or back to the dinosaur
| monolithic systems from pre-history), each individual product
| can be shit as long as one product is a must have.....
| notenoughhorses wrote:
| Maybe. Every time Intuit integrates another app into their main
| QBO product, it makes things worse. To some extent, when they
| are separate apps that connect to QBO, I get more control over
| what data transfers. When it's integrated, they tend to make
| automatic adjustments with no ability to edit them. Obviously
| this is a choice they are making to do things a bad way, but my
| point is just to share a counter example of integration being a
| net negative.
| arkitaip wrote:
| Maybe we can also start moving away from feature-limited Saas
| offerings that are so damn proud that they focus on One Thing
| And One Thing Only when customers want just one affordable app
| to handle all their work and not fifty-eleven ones that become
| crazy expensive.
| Kluny wrote:
| > One Thing And One Thing Only
|
| I mean, that's just fashion that evolved in response to the
| previous fashion, which was bloated software that did a
| million things badly. Fair enough that the pendulum should
| swing back the other way, but there certainly is a place for
| software that only does one thing and does it well.
| dkislyuk wrote:
| The history of tech companies can be viewed as a constant
| bundling and unbundling of products, depending on where the
| inefficiency is.
| htrp wrote:
| The history of all companies can be viewed as a constant
| bundling and unbundling.... once upon a time there were
| these things called conglomerates.
| dangerlibrary wrote:
| You seem to be operating under the assumption that an
| integrated product will necessarily be cheaper, as opposed to
| simply more convenient.
|
| That's definitely not a necessary result of a combined
| product offering, but it's interesting to think about.
| arkitaip wrote:
| It's often much cheaper. Take a look at What Microsoft
| offers with their Office 365 subscription plans or Zoho
| One.
| dangerlibrary wrote:
| This topic is pretty well studied and discussed
| elsewhere, often in the context of antitrust. The Google-
| able phrase would probably be "bundling vs unbundling" or
| similar. It's not _always_ the case that a bundled
| product is cheaper, though, as you point out, often it
| is.
|
| There are many lawyers representing companies accused of
| monopolistic behavior who would be on your side of this
| discussion.
| cercatrova wrote:
| The history of products has always been bundling and
| unbundling [0]. There have been products that bundled
| everything but some customers decided they didn't like the
| bundle, so they went with a la carte options. Now we're
| seeing these a la carte companies bundle again to achieve
| more scale. And then the unbundling will happen again in due
| time.
|
| It's all cyclical.
|
| [0] https://stratechery.com/concept/business-models/bundling-
| and...
| csa wrote:
| > feature-limited Saas offerings that are so damn proud that
| they focus on One Thing And One Thing Only when customers
| want just one affordable app to handle all their work
|
| As a general rule, these two would be very different target
| markets.
| neeleshs wrote:
| This. And interoperability, stepping over each other,
| different teams owning different solutions, conflicts and
| overlaps etc.
|
| Precise why my company built a one-stop-shop SaaS for our
| domain (revenue operations). We need more of these, thinking
| from a user's point of view.
| jgalt212 wrote:
| oh, so like Apple, but for the B2B space?
| user3939382 wrote:
| That's the idea with ERP but in practice the deal is: it does
| all things for all people, still has holes for edge cases,
| almost always a horrible UI, and the TCO is way over what's
| promised after you pay for implementation and support.
| tyre wrote:
| Customers want those things but the companies you are
| referring to haven't been around long enough to build all of
| them. Believe me, it's on their slide decks.
|
| In 2013 I joined a company named ZenPayroll, which focused
| entirely on...well, payroll. That company is now called Gusto
| and does payroll, health insurance, workers comp, HR, etc.
|
| That didn't come out of no where, but you have to start
| someplace.
| purple_ferret wrote:
| As a small business owner do you really want your banking to be
| tied to your POS system though? Why not offer Square 'housing'
| too. Sell with Square and live in a Square condo[0]
|
| [0] So long as you never ever leave Square for another system.
| arcticbull wrote:
| Generally speaking banks leave a lot to be desired in the US,
| which is Square's banking charter. They can make a better
| bank, and they can provide complementary financial services
| in one place.
|
| For what it's worth extant banking competitors offer
| substantially all the major services that Square does. JPM is
| a bank, a broker, a merchant acquirer (Chase Paymentech),
| they're a credit card issuer, a debit card issuer, an
| unsecured lender, as secured lender (mortgage broker).
|
| Heck, Chase even operates a private instance of VisaNet.
|
| What Square's doing isn't any different really, it's just
| flashier and better executed. And also, whatever this
| embarrassing crypto thing is: [1]
|
| [1] https://twitter.com/tbd54566975
| vmception wrote:
| Does it allow business sign up? Like for accounting and limited
| liability?
| jkaplowitz wrote:
| Yes, this product is targeted at small businesses, not personal
| use by individuals.
| bdcravens wrote:
| Downside to anything associated with @jack is that every tweet is
| flooded with spammy and low-grade crypto comments. (was checking
| to see if there was info re the 500 errors)
| bdcravens wrote:
| Square has confirmed they are having issues:
| https://www.issquareup.com/incidents/9hzcgjpvj9dv
| Moeancurly wrote:
| Rough day to announce your next big product, for sure.
| Currently unable to access my business account.
| bdcravens wrote:
| It did finally come up for me. Signing up (had a Square
| account for years, but wanted this to be specific to a small
| business I have) was pretty quick and easy, as was setting up
| the checking account.
| devops000 wrote:
| "Square, Inc. is a financial services company, not a bank. "
| jkaplowitz wrote:
| Yeah but the banking products are provided by a wholly owned
| subsidiary (savings accounts and loans) and a partner company
| (checking accounts and debit cards), both of which are banks.
| The products are indeed offered by banks owned or partnered
| with Square, but not directly by Square, Inc. itself.
| pontsprit wrote:
| Regardless, if Square were to offer legitimate 2FA I would
| probably feel more comfortable using their debit card for
| daily life..Can't seem to find any details regarding this on
| the FAQ though.
| gnicholas wrote:
| For sure. It's surprising how many legit banks believe that
| cell phones are appropriate for authentication of large
| transactions.
| gnicholas wrote:
| Yes, although the checking and savings accounts are both
| insured up to $250k via FDIC, which is all that matters to some
| people.
| JumpCrisscross wrote:
| > _just one below is says "Square, Inc. is a financial services
| company, not a bank."_
|
| It's Square Bank _ing_. Not Square Bank.
| JumpCrisscross wrote:
| These app-only banks seem to prey on the Robinhood customer set:
| users who respond positively to a nice UI and are willing to pay
| for it through friction, feature restriction and non-existent
| customer service.
|
| Retail finance's CLI to the saccharine of these apps is Fidelity.
| Free CMA with no ATM fees (third-party ATM fees reimbursed), no
| minimums, free wires in and out, securities able to be held in
| the account and good customer service on the phone and via chat.
| rexreed wrote:
| Fidelity doesn't offer small business banking, which is what
| this is.
| turbinerneiter wrote:
| I guess at some point, starting a business will be equivalent to
| downloading the square business app.
| htrp wrote:
| stripe is pretty much there...
| duxup wrote:
| >Square Banking
|
| >Square, Inc. is a financial services company, not a bank.
| Banking services are provided by Square's banking affiliate,
| Square Financial Services, Inc. or Sutton Bank; Members FDIC.
|
| Um so they are insured by the FDIC?
|
| Am I doing business with Square, Square Financial Services, Inc.,
| or Sutton Bank?
|
| Do I have any recurse when it comes to typical banking
| expectations / rules here when it comes to either of the three
| companies I may or may not be using?
| ww520 wrote:
| That's a really good question. In the event of an insolence,
| can you as a customer of Square get through to the real banks
| in the back? Would the banks treat you as their own customer
| and fulfill their FDIC obligation?
| thebean11 wrote:
| Yes usually the backing account is in the end user's name in
| these schemes.
| Bhilai wrote:
| > Um so they are insured by the FDIC?
|
| Says on the website - "Your account(s) are FDIC-insured up to
| $250K"
| afavour wrote:
| Sutton Bank is a real bank with full FDIC insurance. Seems like
| Square Banking is just a pretty UI on top of that.
| hestefisk wrote:
| Sutton Bank is the deposit taking institution and therefore
| wear the customer / deposit risk. Pretty much everything from
| the payment rails and up appears to be Square.
| mattanimation wrote:
| This really reminds me of how Simple was actually just a
| layer on top of BBVA who then ended up closing Simple and now
| BBVA has merged with another bank and is changing again.
| tadfisher wrote:
| Simple started out as a layer on top of The Bancorp Bank
| (TBBK), and we intended to support multiple backing
| accounts before the merger with BBVA.
| twobitshifter wrote:
| Fidelity offers cash management accounts fdic insured up to
| $1M. They do this by "sharding" your account across multiple
| fdic banks.
| zonethundery wrote:
| Square Financial Services is a Utah-chartered industrial loan
| company (ILC) with FDIC insurance [0]. Savings deposits go
| here.
|
| Checking accounts are at Sutton Bank (partner bank). I assume
| the split is driven by Square Financial's three-year
| supervisory plan w/ FDIC and the mechanics of getting square
| off chase/wells card rails. Green dot did something similar by
| purchasing a chartered bank.
|
| [0]
| https://www.fdic.gov/regulations/laws/bankdecisions/depins/s...
| athorax wrote:
| You might hit some recurse trying to get through their phone
| menu
| dm8 wrote:
| 0 overdraft fees. Yay. More like it. It will force major banks to
| rethink their overdraft fees as a revenue center. As someone who
| was not so well financially just a decade ago, overdraft fees
| seemed like penalty for being poor. When you are living paycheck
| to paycheck, you never know when your account will get overdrawn.
| And most evil thing was - bank will deny the charge because you
| didn't have enough funds but will still charge you for $34 fee.
|
| Some banks offer overdraft protection but it's not obvious in lot
| of banking websites/apps in my experience and has been recent
| development. Plus - lot of people don't understand the concept of
| overdrafts. They assume bank will deny if your account doesn't
| have enough funds.
|
| I'm surprised congress didn't take action on overdraft fees as it
| mostly affects middle class and poor people.
| Kluny wrote:
| > Some banks offer overdraft protection
|
| I've always thought overdraft protection was disturbingly like
| "fire protection". As in, three dudes come to your door, and
| the skinny one says "Nice place ya got here, be a shame if it
| burned down" while one of the beefy ones fiddles with a Zippo
| lighter.
| MisterBastahrd wrote:
| Yeah, this is huge in an age where a lot of people are dinged
| through recurring subscriptions. You could rack up 5 or 6
| charges and not even realize it, at which point you're out
| hundreds of dollars in overdraft fees.
| mittermayr wrote:
| I always struggled with this concept, why not stop at 0 when
| the account is overstretched? Here in Europe, for most people
| I would say, it's quite rare that the account goes to 0, and
| if it does, the transactions simply don't go through (unless
| it's a credit card). Isn't that asking for borrowing money at
| no fee? Don't get me wrong, I absolutely despise predatory
| bank charges, but wonder if that's a bit much to ask a a
| consumer (i.e. no charge for borrowing money I don't have?).
| Or is this just about the penalty fee for going into
| overdraft, and not the actual fee for loaning of money?
| dimmke wrote:
| You used to be automatically opted into overdraft. Also,
| you could still get hit with an overdraft fee even if they
| rejected the charge. Banks also used to structure
| transactions to force overdrafts if they could. It was
| really bad.
| sofixa wrote:
| In France many banks propose an overdraft service which is
| limited ( as an example, for a student with no banking
| history to 200 euros), and is basically a mini free loan.
| There are rules like you can't stay on overdraft more than
| X days ( iirc the only one I've seen is 30 days), in which
| case you pay a fee.
| namdnay wrote:
| Being able to go below 0 is not tied to having a credit
| card. Nearly all debit cards issued in Europe can do this
| to. The only ones that don't are things like Electron
| (systematic authorization), but they don't play well with
| "fast" systems like motorway tollgates
| gambiting wrote:
| So what happens here in the UK with my visa debit card,
| is that if I somehow go below 0 using it(very difficult,
| but it has happened before) then my bank sends me a text
| saying "hey, you have gone into unarranged overdraft,
| please pay in some money before tomorrow 3pm or we'll
| charge you a fee".
|
| But of course, that implies that the bank isn't greedy.
| mcherm wrote:
| > It will force major banks to rethink their overdraft fees as
| a revenue center.
|
| I wish that were true. For significantly more than 10 years I
| have worked for a major bank that does not charge fees for
| overdrafts that pull from a loan or savings account. I still
| have seen few signs of the major banks deciding to follow our
| lead.
| dclusin wrote:
| Instead the extortionary practices will be moved to the foreign
| exchange rate or some other more opaque mechanism.
| GloriousKoji wrote:
| I remember over a decade ago or so my bank offered this new
| overdraft "protection" where you could setup an amount of money
| to use from your saving account to make up the difference in
| the event of overdraft. One day I cut a check that was $5 over
| what was in my checking account and found out there was a $75
| fee for overdraft. It was not at all obvious in their
| advertising that fees would still apply. Never made that
| mistake again.
| the_snooze wrote:
| https://www.fdic.gov/consumers/overdraft/
|
| Overdrafts have been opt-in by regulation since 2010. What
| banks have done is try to trick people into opting into
| "overdraft protection," which is really just the old system
| that allows a customer's checking balance to drop below 0:
| https://www.wellsfargo.com/credit-cards/features/overdraft-p...
| As long as a customer takes no action or just says "no," they
| won't be allowed overdraw their checking balance.
| angott wrote:
| Yes, but if you do not opt into overdraft, you will still be
| charged a "non-sufficient funds" (NSF) fee when the bank
| declines your transaction. And the NSF fee is usually higher
| than the overdraft fee.
|
| This doesn't make any sense and is just a money grab on the
| poor and desperate, because there is absolutely no technical
| reason why declining a checking or debit card transaction
| should cost $35+ to process.
| jjulius wrote:
| Depends on the bank, I would imagine. Anecdotally, I've
| never been charged a fee for having a transaction declined
| because of insufficient funds, nor has my wife, and
| collectively that's ~5 different banks.
| angott wrote:
| Based on my personal experience, all the big banks in
| Canada do it. The fee is 45-48 CAD for each declined
| transaction, no matter the amount.
| BayAreaEscapee wrote:
| Back in the day (when we had to go to school uphill both
| ways), I met a banker who told me, "whatever your bank is
| charging you for a bounced check, it isn't nearly enough".
| Then he described how the system worked: the actual
| physical check had to be sent back from your bank, to the
| Federal Reserve branch of the receiving bank, then to your
| branch of the Federal Reserve bank, and then to your bank.
| Not electronically: I'm describing the movement of the
| actual physical paper check. So, there was a real cost to
| everyone for a bounced check and of course the person who
| wrote the bad check should pay. That makes sense.
|
| Of course, this makes no sense in a world of electronic
| transfers via ACH. The banks that are still charging $35
| for a bounced transfer are engaging in something barely
| more legal than theft.
| yellow_lead wrote:
| So how do you opt-out? Or is this an action you have to take
| when creating the account.
| yardie wrote:
| You opt-out or opt-in when you set up the account or
| anytime afterwards. I know only because I just setup
| checking for my teenage son and it was something the agent
| asked during the process. I pushed back and declined even
| though they gave me the end of the world spiel.
| duped wrote:
| The tyranny of scale creates terrible incentives in banking.
| Someone whose average balance hovers around $100/month might
| well cost the bank more money than they can earn off the
| balance, while someone with $10,000 is basically free.
|
| Normally in services you charge more from the people who are
| more able to pay, because they'll be willing to spend more
| money for the same service. Yet in financial services and
| banking, the more money you have to spend on the services
| results in the lower fees and costs across the board.
|
| I think if there's something that needs to be systematically
| altered to close wealth gaps, that's a fine place to start.
| donmcronald wrote:
| > you never know when your account will get overdrawn
|
| How? It's not that hard to keep track of money in vs money out.
| I bet most of it is people that don't understand it takes time
| for a cheque to clear or people that know an auto payment will
| overdraw their account but can't do anything about it (ie: no
| money).
|
| Overdraft fees should be illegal, especially for electronic
| transactions that get rejected.
| mellavora wrote:
| maybe you have never lived through a period of sustained
| financial stress. Yes, people in that situation understand
| that it takes a few days for a check to clear. One of those
| checks is your paycheck, which you need to clear to cover
| your other costs. The other is the check you wrote to the
| grocery store so you could eat, or your rent check. Which
| clears first? Did you time it right? What if your paycheck
| was delayed by a day?
|
| Money in vs money out is very hard to keep track of when you
| don't have a buffer and you are always balancing empty.
|
| I want to make an analogy to a seemingly simple buy known
| hard computer science problem, like resolving bugs caused by
| race conditions. Stuff which is simple if you can assume a
| single processing thread can become a nightmare when this
| assumption does not hold.
| roland35 wrote:
| This is true. Having an extra few hundred dollars made a
| huge difference to me since I was always juggling the
| payday vs rent money as well.
|
| Credit cards are not easy to get with no credit history
| either. I eventually was able to get a card but it had a
| $250 limit.
| dimmke wrote:
| Banks used to structure these charges to create overdrafts
| whenever possible. They made it very difficult for you to see
| what your actual usable balance is.
|
| They also used to be allowed to simply reject the transaction
| if you didn't have the money and still charge a $36 fee. It
| was insanity.
|
| If your checking balance never reaches close to zero, you
| wouldn't notice this. I was a teenager in 2010 and definitely
| got hit with a bunch of overdraft fees. Banks know these fees
| are bullshit (even now, with increased regulation), that's
| why they're so quick to waive them at first.
| bananaportfolio wrote:
| In 2006 PayPal tried to deduct ~$500 dozens of times in a
| 48 hour period due to what was obviously a software bug.
| This resulted in me being overdrawn by around $900. No
| matter who I spoke to on the phone with Bank of America,
| nor which branch manager I met with in person, nobody could
| do anything to help me.
|
| The most I accomplished was having a branch manager agree
| to waive _1_ overdraft fee since I had never overdrafted my
| account before.
|
| PayPal was even less helpful.
|
| If I enable overdraft protection with my current bank
| (Wells Fargo) then they will charge me something like $17
| to transfer money from my savings account to cover a charge
| that my primary account wouldn't have enough funds to
| cover.
|
| This was a good reminder that I need to switch banks. Maybe
| I can find a good Credit Union in my area.
| artificialLimbs wrote:
| Anecdata: I overdrafted a few months in to having my
| credit union account. The bank manager literally called
| me on the phone that day and asked if I could come in and
| cover the charges. I couldn't because I was too far away
| or out of town or something. Manager asked if I could
| come in the next day, to which I said yes, and did, and
| received no overdraft fees.
|
| Another credit union (which I have since left) in my area
| was a total nightmare to do business with. 6-10
| transactions were met with shocking resistance and
| frustration. Check reviews for your propsective bank if
| possible.
| 35fbe7d3d5b9 wrote:
| > This was a good reminder that I need to switch banks.
|
| When you do, try your best to do what I've done ever
| since my mortgage processor screwed up and double charged
| me: _never_ use anyone else 's online services; do all
| the banking that's possible from your bank's online bill
| pay. At least that way the people who are pushing money
| out of your account via automation report up through the
| same people who manage the rest of your account ;)
|
| Also, credit unions seem to be happy to let you maintain
| an account with a balance but no fee in a way that banks
| aren't. As a result, I have my main checking account that
| I use for everything, and a second account _at a
| completely unrelated institution_ where I keep 30 days
| worth of cash. I spent $10 for che(que|ck)s and an hour
| of time getting it set up, which was well worth buying me
| a month of insulation against any number of risks.
| steveklabnik wrote:
| I wrote about how this happened to me in a comment here (8
| years ago, dang!)
| https://news.ycombinator.com/item?id=6424493
| anonAndOn wrote:
| You must not be familiar with the banks' previous tendency to
| rig the game and make sure the charges all hit your account
| and in the most profitable sequence _before_ the deposit was
| applied?[0]
|
| [0]https://scholarship.law.unc.edu/cgi/viewcontent.cgi?httpsr
| ed...
| xchaotic wrote:
| Just like a bank, without the security. Have a look like modern
| banks are done say in the UK - Monzo etc.
| yurishimo wrote:
| Also, just to note, Monzo USA and Monzo UK are identical in
| name only. The US version has a fraction of the features of the
| UK version and they don't seem to be iterating as quickly as
| other neobanks after Simple's departure.
|
| I switched to OneFinance and have been generally happy with it
| as it caters most closely to the old Simple methodology,
| especially with configurable overdraft that was launched last
| month.
|
| If anyone has experience with the others and how they've
| matured since Simple's departure, I'd be interesting to hear
| what you like and what you're excited for on their roadmap!
| djrogers wrote:
| I think you've missed a couple of details. The loans are
| provided by square's ILC, and the checking account is an FDIC
| insured one with Suffolk bank.
|
| So 'just like a bank, with the same security' would be more
| accurate.
| bingdig wrote:
| 2021 is a great time to own a small regional / community bank.
| All the mature FinTech companies are trying to buy a bank to
| expedite the cumbersome bank chartering process (+ mortgage
| origination and servicing companies are too)
| zonethundery wrote:
| sure, they are, but the bank holding company act (BHCA)
| restrictions on ownership/source of strength requirements are a
| kick in the head. You can go the Greendot route (just up and
| convert yourself to a bank holding company), Varo route (same
| but get a fresh OCC charter), or take your chances with an ILC
| application.
| hestefisk wrote:
| Indeed. And a good time to have a banking as a service
| business. Have a look at Cross River Bank. They have grown
| their balance sheet 3x in the last two years. It's not just US
| though. In Southeast Asia same trend; big tech platforms like
| Grab and Shopee are buying small bank license holders on the
| cheap to start taking deposits and build their ecosystem on
| top.
| overlordalex wrote:
| Warning: The site has some funky scrolling, but if you keep going
| there is more information that eventually shows up.
|
| $scrolljackingRant
| sergiotapia wrote:
| The brutalist website design for this new product is suffocating.
| Tried it on many browser widths on my desktop.
| repsilat wrote:
| Huh, I always think of "Brutalism" in the context of web design
| as "no CSS, no JS, lots of <h1>." I guess maybe it needn't be
| unstyled, but certainly is unsubtle.
|
| To me this page is architecturally would be something
| overloaded with pointless decorative elements. Baroque?
| natchy wrote:
| This isn't a brutalist site just because it has little color.
| pdpi wrote:
| This was the "Aha!" part for me:
|
| > Get a customized offer based on your card sales through Square,
| and then choose your loan size.
|
| and then a bit further down:
|
| > Repay it automatically with a percentage of your daily card
| sales through Square.
|
| Such an incredibly obvious idea in hindsight. While I can see why
| putting all your eggs in one basket like this can pose something
| of a problem, there's no denying this level of integration is
| amazing for a small business.
| csa wrote:
| Stripe has been doing this for at least a few months now...
| maybe since last year.
|
| It's a nice feature.
|
| Frankly, PayPal has been doing a version of this for years
| where they would put a hold on your funds and then (usually)
| offer you a loan that would cover most/all of the money held.
| Of course, they called all the shots, but the idea was there.
| mchusma wrote:
| It's a very expensive loan though. I did the math on our
| stripe offer, and it was o
| yesimahuman wrote:
| Yea, we recently got a Stripe Capital loan offer, but it
| didn't seem compelling at all. We're clearly not their
| target customer for that but as a tech startup doing SaaS I
| kind of figured we would be their target customer. The
| offer was orders of magnitude less than our ARR on that
| account.
| mchusma wrote:
| It's an expensive loan though. Stripes offer was about 45%
| APR, which was higher than Kabbage, Fundbox, and a host of
| other fast/easy loan providers.
| clint wrote:
| This is something PayPal has offered small businesses for
| probably close to a decade now.
| onos wrote:
| So has square through a different mechanism, "square
| capital".
| echelon wrote:
| But then you have to interact with PayPal.
|
| PayPal burned me repeatedly as a teenager. Locked funds, some
| never recovered. I didn't do anything wrong.
|
| Never. Again.
|
| Maybe some people don't harbor this grudge, but to me PayPal
| is the epitome of incompetent and evil. Venmo, all of it.
| JCVI-syn10 wrote:
| > 0.5% APY on savings accounts
|
| How insulting, and yet still better than the competition
| [deleted]
| ac29 wrote:
| Low-risk yield doesn't grow on trees. 0.5% is about what a 3
| year treasury bond was paying at the beginning of the month
| (its lower now). Banks dont really need deposits to make loans
| right now either, since the reserve ratio was changed to 0%
| last year.
|
| So yes, safe, insured deposits in savings accounts dont pay
| much at the moment. This has less to do with banks being greedy
| and more to do with current fiscal policy.
| gnicholas wrote:
| In the past I've shopped around and found that you can find
| personal bank accounts that pay small amounts of interest
| (~1% in recent years), but business bank accounts wouldn't
| pay anything. It's nice to see this option, which will
| hopefully draw some people and simultaneously convince
| competitors to offer similar products.
| ac29 wrote:
| Yeah, a lot of credit unions especially have reward
| checking with ~1% rates. You always need to jump through
| some hoops like having direct deposit and a minimum number
| of transactions on their debit/credit cards (which is where
| they make the money to pay the extra interest). Still, if
| you can meet these requirements, its not a bad way to
| lessen the effect of inflation on money kept for day to day
| expenses in a checking account.
| psanford wrote:
| Seems to be right in line with other online only banks.
| ilyas121 wrote:
| The biggest question I would have is: How good the customer
| support is?
|
| I have the worst luck, and all my new age accounts like Robinhood
| and Coinbase have little to no customer support compared to the
| incumbents.
|
| I got lucky and the Robinhood situation resolved itself but I've
| been trying for over a year to contact Coinbase and circle the
| drain. Hopefully Square has better support.
| htrp wrote:
| Realistically.... 0
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