GoBank to Return — with Monthly Fees

gobank_fb2Apparently GoBank‘s experiment with letting users choose their own monthly fees didn’t work out so well.

GoBank has been out of action lately, not allowing new members for the past several weeks. Now the mobile-first bank from Green Dot Corp. is testing a “productized” version of the service that apparently includes an $8.95 monthly fee. This fee is waived with a monthly direct deposit of $500 or more.

A wider relaunch, including new features, is planned soon, according to messages on the bank’s social media channels, as in the image here.

Those looking to get GoBank accounts should drive to one of the 20 or so Walmarts in Texas where the “starter debit card” required for opening the account is available, for just $2.95, according to Doctor of Credit. Users can then employ those cards to open online accounts, which, as mentioned, carry a set monthly fee.

This appears to mean that new GoBank accounts without direct deposit attached will cost almost $108 a year. Previously, users could choose their monthly fee, which ranged from nothing to $9 a month. Users whose accounts were opened before July 23, 2014, will remain on the old fee schedule, but for new users, the top end of the old sliding scale will be mandatory. This seems to indicate that the experiment to let users choose their own fees was a failure.

The fee schedule indicates users can sign up online without a GoBank package, which includes the starter debit card, but it is not clear how this is done. The website leads those clicking “Open Your Account” to a page that asks for information from the starter debit card.

GoBank has been retreating to its prepaid roots since its soft launch in early 2013. At every juncture, the company leaned toward caution and a reliance on retail stores, rather than relying on rapidly evolving smartphone technology, as does, for example, Moven, which leverages personal financial management tools and is clearly interested in mobile payments at the point of sale.

Early on, funding a GoBank account beyond the initial load became impossible with a debit card. Mobile check deposits were held for up to ten days. (This policy was recently amended.) Marketing focused on retail stores such as 7-Elevens, Walmarts and major pharmacy chains. Retail partnerships were of course the way Green Dot was built, and incidentally, what GoBank’s new manager, Josh Goines, worked on while at PayPal.

Green Dot CEO Steve Streit has said many times he wants GoBank to be a cool brand. Partnerships with Walmart and 7-Eleven, however important monetarily, are not cool. They are what businesses serving the underbanked, such as as PayNearMe, do. They serve a purpose, but not one that is likely to attract urban millennials.

But more to the point, a $9 fee is not cool. Many of Green Dot’s own prepaid cards cost more like $5 a month. Yes, direct deposit is very common, but this is a, well, big bank-like fee structure. If GoBank is not a user’s primary financial institution — i.e. their direct deposit goes elsewhere — the fee is likely to discourage them from opening accounts. Perhaps that is the point.

But with a plethora of free and low-fee options such as Simple, Bluebird, Serve and Moven out of there, why would a new user choose to go with GoBank? It’s still not known what exactly is planned for the launch of the new GoBank that has been teased on social media, but at this point, for $8.95, it had better be good.

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