GoBank Adds Friction to Its Account-Opening Process

© Can Stock Photo Inc. / starmaroWhile other banks and fintech startups are working to remove friction from the account-opening process, GoBank is adding friction. Yes, you read that right.

The mobile-first bank account from Green Dot Corp. announced the following Wednesday:

You’ll now need a GoBank starter kit to open a GoBank account, which is only available at a few stores in the moment. Don’t have one yet? Stay tuned for updates on how to get one!

The starter kit appears to contain a “starter debit card,” the information from which is required to begin the account-opening process online. In June 2013, GoBank introduced mobile account opening. That is now gone.

So while Moven and Simple have made it easier to open accounts, GoBank just made it harder, and is forcing new users to visit retail partners such as 7-Eleven or Walgreens in the same way traditional banks force users to go to branches.

Also on Wednesday, GoBank announced  new limits on its deposit accounts to go into effect August 14:

  • In store cash deposits are now limited to up to $3,000 per rolling 30 days.
  • When using the Send Money feature, you’re now limited to receiving up to $2,000 per day and up to $5,000 per rolling 30 days.
  • When using the Pay feature, you’re now limited to sending payments of up to $5,000 per day and $5,000 per transaction.

Those in-store cash deposits, now limited to $3,000 every 30 days, were previously limited to $2,500 a day. This seems to represent a severe curtailing of this feature.

In the same email, GoBank announced its $1 out-of-network balance inquiry fee would be removed.

GoBank frequently updates its deposit account agreement, and to its credit, alerts users via email when it does so. But, unfortunately, this transparency highlights the fussiness and nervousness of the bank. GoBank introduced a strong feature set at its soft launch in January 2013, but since then has introduced little new (the most notable new feature may have been the ability to email customer service from within the app, added December 2013) and instead has removed features, such as the ability to fund one’s account with a debit card from another bank. Funds are now loaded via direct deposit, ACH transfer from another bank, mobile check deposit, and cash at partner stores.

Why is the bank so conservative? Green Dot’s problems with money-laundering probably play a part. But introducing friction to account-opening and fussy limits on moving money seems unlikely to win over millennial customers. Bank Innovation reached out to GoBank for more information on the new restriction, but the bank is in a quiet period leading up to its earnings call on July 31. Parenthetically, Green Dot’s debit card agreement with Walmart is up for renewal in 2015, which concerns some investors.

In May, the bank teased new features to come this summer, but so far none have been released. In June, Green Dot announced that PayPal‘s Joshua Goines, who led the eBay subsidiary’s offline retail business, had been tapped to manage GoBank. PayPal’s attempts to penetrate the point-of-sale at, for example, Home Depot, have not been notably successful.

While other neo-banks like Moven and Simple look to provide more services and ease friction in payments and banking, GoBank is becoming increasingly indistinguishable from its sister product, the Green Dot prepaid card.

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