Summer is almost over, the election campaigns are in full-swing, and the news cycle has reached new, unforeseeable nadirs, calling into question whether we can ever identify a nadir when we are in one. But let’s not focus on all that! It’s personal-finance and finance-technology time. And there was plenty of good — or at least interesting — news in that world this week. Once again, we witnessed the growing pains of an industry struggling to reinvent itself.
In technology, we had lots of great stuff happen. It came out that you’ll soon be able to use PayPal in more stores, thanks to a partnership with the Discover network. And here in New York, our Metro-North and LIRR are currently testing out a new mobile application that will allow commuters to pay with a scannable displayed barcode on their phones. Boston, as hard as it is to admit, is actually ahead of New York on this. Also, SunTrust debuted its mobile check deposit feature — good news for SunTrust customers who want to save some gas money.
But what does this piecemeal innovation look like all in one spot: we took a look at what Chase Bank’s branches will look like in the future. Unlike other banks that think branch banking is on its way out, thanks to the conveniences of the Internet, Chase is doubling down on its physical locations, adding hundreds of new branches. And unlike the legacy branches you see around town with dozens of empty and obsolete teller windows, these will be tailor-made to the needs of modern branch banking: self-service teller kiosks, paperless tellers, instant-issue debit cards and teleconferencing are all slated to be part of Chase’s branches in the future.
Bank of America, which is scaling back its branch presence these days, is also getting rid of its controversial credit protection products. This is a good thing for consumers, as these products were potentially very expensive and didn’t offer much upside. They let you stay in debt longer without damaging your credit, but don’t pay out any of their value. Score one for the regulators, because pressure from the CFPB helped get rid of these. That’s not the only thing Bank of America did away with this week. The banking giant also did away with its so-called “zombie accounts”: the accounts that come back to life after customers close them because of a recurring bill payment request. It used to be the case that Bank of America would revive the account, and begin charging it fees for overdrafts or service, and then send the delinquent account off to collection — thereby hurting its customers’ ChexSystems report. Well, they don’t do that anymore. What great people.
Durbin Amendment fallout continues to pile up. We learned this week that more and more Americans are switching to debit cards for everyday purchases, and this is driving the average ticket size down. What this means is that merchants are getting pinched more and more by banks because interchange for small-ticket purchases has gone up while big-ticket fees have been capped. It also helps explain why banks might like to issue prepaid cards: they’re Durbin exempt. And while we’re on the topic of checking accounts, we also took a look at the trade-offs between fees and services at banks and credit unions. Free isn’t always better, and smaller might be better — when it comes to banking.
Lastly, we thought long and hard about the ways in which cash confounds PFMs — what does it mean? Can we not rely on technology to do our budgeting for us? We’re going to have to learn somehow. The Atlantic ran a fascinating feature on Millenials, which really hit home for us. Dubbing us “the cheapest generation,” it highlighted young people’s reluctance to buy cars and homes (instead, we prefer smartphones) — a problem for the economy in the short-term, but maybe a good problem in the long-term. It’s going to be a painful process, but at least we can use our phones to pay for the train here in New York City — and hopefully elsewhere, in the future.