To reach the young and tech-savvy market, Green Dot has released a new app that lets users open and manage their checking account from a smartphone.
The company is best known for selling re-loadable prepaid debit cards sold at stores like Wal-Mart. It is facing competition from the big banks. American Express and J.P. Morgan Chase & Co. have rolled out their own prepaid debit cards.
With its new smartphone app and GoBank account, it aims to reach people who are dissatisfied with their traditional bank accounts, often referred to in the media as the "underbanked". "Most people today, and especially people under 40, aren't satisfied with their current banking options," said Steve Streit, the company's founder and CEO in a statement.
Available today in limited release, the GoBank account will include a main deposit account linked to a Visa branded debit card that can be used to make purchases online and in stores. The main account doesn't come with paper checks, but the app can be used to pay bills, and Green Dot can issue checks on behalf of its users. It also comes with a separate deposit account for customers to store money.
The ability to send money to friends via SMS or email and peek at your bank balance without signing in are among the coolest features of the GoBank account.
The company claims that the approach is more "fair" than the major banks. GoBank has no overdraft fees, no penalty fees, no minimum balance requirements, and no required monthly fees.
“Until now, banking is one of the few industries in the world that hasn't yet been reinvented by Silicon Valley,” said Streit, who hopes that controlling personal finances will someday feel as "intimate and addictive as checking Facebook."
Anyone can request an invitation to join GoBank on the company's website. The GoBank App is also available for free from the App Store for iPhone or iPod touch, or Google Play for Android. To use the app, you'll need to register for a GoBank membership. To get a feel for how it works, check out the explanatory video.