BankSimple, the Web-native bank built by a team that includes former Twitter API Lead Alex Payne, has begun testing its first small batch of bank cards among its staff. Payne announced one year ago this week that he was starting the company and BankSimple says it has 50,000 people waiting to test its services.
"We are crafting an experience that we think you are going to love," writes Adam Erlebacher, VP of product marketing, in a short blog post today. "The last many months have taught us greater patience. It is difficult to change an industry. But we're leaning into it and can't wait to show you what we're building."
Here's how we explained BankSimple a year ago:
Imagine a Web-based bank that lets you deposit checks by simply photographing them with its mobile app. It lets you make cash withdrawals from ATMs all over the country at no cost, sometimes even reimbursing you for fees you get charged by other companies. As a social Web application, the bank offers you all kinds of recommendations and value-added services based on analyzing your private data.
Does that sound crazy? Perhaps no more crazy than an empty box labeled "What are you doing?" sounded three years ago when software developer Alex Payne joined Twitter as its API lead, the position responsible for helping birth the famous ecosystem of outside developers building apps on top of Twitter.
Last summer BankSimple opened up discussion regarding the collaborative creation of its own app ecosystem and API, one of the most eagerly anticipated parts of the company's launch, for me at least.
For most people, the absence of overhead costs and fees, the emphasis on Web and mobile usability and the purportedly genuine focus on the customer are what's most anticipated. Most people don't like their banks these days; especially young people used to engaging with Web services that have dedicated substantial resources to winning their loyalty through compelling user experiences.
The company said today that roll-out of the cards will be gradual and deliberate:
While we are thrilled to have our cards in-hand, we will be taking the necessary time to ensure that our systems are rock solid and that our card fulfillment operations can handle the demand. It is critical that we get this right from the very beginning. As our testing progresses, we'll add family and friends. We'll then begin inviting those who requested a beta invitation, on a first-come, first-served basis.
What's the downside? It is a new service, that will inevitably raise some concerns for some potential customers.
Some people wonder how the business model will really play out. Personal finance blogger Trent Hamm asked last year whether what looks like an app platform in theory could become offer-overload in practice.
"Their website talks about continually adding 'competitive banking services,' which likely means easy access to brokers, different savings account models (likely backed by other banks who pay them referral fees), and so on.
"It's too early to say how this will work. It has the potential to be very useful. It also has the potential to cause you to be constantly bombarded by 'offers' you don't really want. They have to find the right balance to maximize their profit (meaning the most offers they can put in without alienating customers)."
With the company's emphasis on user experience over fast growth of profits, though, I feel good about the likelihood that the company will find the right balance.
Finally, though the company is being built in part in my home town of Portland, Oregon - as a Web bank it's got a sense of placeless-ness about it. Right now my bank is a very local credit union and I like that. Like so many things, the Web's power to disintermediate personal finance will come at a cost in terms of local and personal connection. Most people lost those things long ago, though, and this may very well beat the dominant model of big banking in the status quo.
Will I put my money all into the cloud? I'll give it a try and I'm excited to get a chance to soon, but it's going to have to really rock me to get me to leave my local credit union. Will you give BankSimple or services like it a try? Are there additional concerns we ought to account for? Let us know in comments below.