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How viable is a bank, which offers exactly: * No physical bank branch. Only online banking * a current account with a monthly fee * a debit card that can be

How viable is a bank, which offers exactly: * No physical bank branch. Only online banking * a current account with a monthly fee * a debit card that can be used at other banks' ATM - monthly fee. * Debit card can't be directly used online. But you can generate merchant specific card numbers on the website. Say, your monthly fee is $20. Then 4000 customers brings in a million dollars an year. How much is spent on fraud by a bank every year? Could a single person with a few part-time contractors run a bank of this nature?

jermaustin1 4y ago
This is kind of how I'm set up. I use Ally for their checking and savings and privacy for their merchant specific card numbers. It works reasonably well for me. It would be cool to have a real FDIC insured, licensed bank with this built in some how. I'd be willing to pay $25/mo for something that is first-party.
- popcalc 4y ago
  Relay (Thread Bank) offers generating virtual cards.
- boring_twenties 4y ago
  Citi has had "virtual account numbers" since at least 2005. (Back then, you needed the Flash player to use them, or was it Java...)
V__ 4y ago
These sound like direct banks. In Germany, there are a few of those, ING being the largest, and represent about 50% of the private market. Pretty viable therefore.
- abdullahkhalids 4y ago
  ING [1] is offering a variety of financial services, including financing and savings accounts. Such banks necessarily have to operate at scale, in order to offset fraud/investment loss. I am specifically asking for the viability of a small "dumb" bank, which engages in only the lowest risk activity. Surely, technology has reached the point where a small team can create a bank of the sort I am suggesting. But do financial regulations and economic realities allow for it? [1] https://www-ing-de.translate.goog/?_x_tr_sl=en&_x_tr_tl=ur&_x_tr_hl=en-US&_x_tr_pto=wapp https://www-ing-de.translate.goog/?_x_tr_sl=en&_x_tr_tl=ur&_...
  - V__ 4y ago
    I don't think the economies allow for it. The German Sparkasse started as a savings bank and at its core was/is a 'dumb bank' in your words. But at some point customers demand financing etc. and would like to get all their basic needs from one bank instead of having multiple. So these banks adapted.
  - inferiorhuman 4y ago
    ING, when they had US retail banking operations, wasn't huge but they also did things differently. For instance they did not offer fixed rate mortgages – it's a lot easier to keep an adjustable loan on the books. They also did tech better than most banks (until the dumpster fire that is Capital One bought them out).
OkayPhysicist 4y ago
Why would anyone use such a bank when pretty much every other bank and credit union in existence is cheaper and more convenient?
notahacker 4y ago
I don't think a single person with a few part-time contractors is getting a banking licence in many jurisdictions The UK has a few "challenger bank" startups which are basically just an app, but they're not lifestyle businesses, they're "raise £10m before you launch" businesses.
- blitzar 4y ago
  Back in ye olde days of 1998 - https://en.wikipedia.org/wiki/Egg_Banking https://en.wikipedia.org/wiki/Egg_Banking Monzo started probably the closest to OP description - https://www.alexanderjarvis.com/monzo-pitch-deck-raise-series-b-capital-investment/ https://www.alexanderjarvis.com/monzo-pitch-deck-raise-serie...
tgsovlerkhgsel 4y ago
Good luck developing all the software and infrastructure needed for online banking, card processing, all the compliance paperwork, etc. with just a million per year. Remember that any time something with your online banking goes wrong it turns into a customer support call, which isn't just frustrating for the customer but also expensive for you. Also, why would I bank with a bank with hacky online banking that charges me $240/year when I can have the same for free at one of the many fintechs? > Could a single person with a few part-time contractors run a bank of this nature? You have 4000 customers. If each of them has one customer support contact per year (your website better work well!) that's 11 calls per day or ~20 per working day.
Maken 4y ago
It feels like you are describing something like N26 and other German microbanks, except they offer real debit cards and the only fee is for sending you the physical card.
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hackernewds 4y ago
Sounds like you're basically describing CashApp's debit card. Also gives cashback rewards
fuckingkike 4y ago
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jermaustin1 4y ago

This is kind of how I'm set up. I use Ally for their checking and savings and privacy for their merchant specific card numbers. It works reasonably well for me. It would be cool to have a real FDIC insured, licensed bank with this built in some how. I'd be willing to pay $25/mo for something that is first-party.

popcalc 4y ago
Relay (Thread Bank) offers generating virtual cards.
boring_twenties 4y ago
Citi has had "virtual account numbers" since at least 2005. (Back then, you needed the Flash player to use them, or was it Java...)

V__ 4y ago

These sound like direct banks. In Germany, there are a few of those, ING being the largest, and represent about 50% of the private market. Pretty viable therefore.

abdullahkhalids 4y ago
ING [1] is offering a variety of financial services, including financing and savings accounts. Such banks necessarily have to operate at scale, in order to offset fraud/investment loss. I am specifically asking for the viability of a small "dumb" bank, which engages in only the lowest risk activity. Surely, technology has reached the point where a small team can create a bank of the sort I am suggesting. But do financial regulations and economic realities allow for it? [1] https://www-ing-de.translate.goog/?_x_tr_sl=en&_x_tr_tl=ur&_x_tr_hl=en-US&_x_tr_pto=wapp https://www-ing-de.translate.goog/?_x_tr_sl=en&_x_tr_tl=ur&_...
- V__ 4y ago
  I don't think the economies allow for it. The German Sparkasse started as a savings bank and at its core was/is a 'dumb bank' in your words. But at some point customers demand financing etc. and would like to get all their basic needs from one bank instead of having multiple. So these banks adapted.
- inferiorhuman 4y ago
  ING, when they had US retail banking operations, wasn't huge but they also did things differently. For instance they did not offer fixed rate mortgages – it's a lot easier to keep an adjustable loan on the books. They also did tech better than most banks (until the dumpster fire that is Capital One bought them out).

OkayPhysicist 4y ago

Why would anyone use such a bank when pretty much every other bank and credit union in existence is cheaper and more convenient?

notahacker 4y ago

I don't think a single person with a few part-time contractors is getting a banking licence in many jurisdictions The UK has a few "challenger bank" startups which are basically just an app, but they're not lifestyle businesses, they're "raise £10m before you launch" businesses.

blitzar 4y ago
Back in ye olde days of 1998 - https://en.wikipedia.org/wiki/Egg_Banking https://en.wikipedia.org/wiki/Egg_Banking Monzo started probably the closest to OP description - https://www.alexanderjarvis.com/monzo-pitch-deck-raise-series-b-capital-investment/ https://www.alexanderjarvis.com/monzo-pitch-deck-raise-serie...

tgsovlerkhgsel 4y ago

Good luck developing all the software and infrastructure needed for online banking, card processing, all the compliance paperwork, etc. with just a million per year. Remember that any time something with your online banking goes wrong it turns into a customer support call, which isn't just frustrating for the customer but also expensive for you. Also, why would I bank with a bank with hacky online banking that charges me $240/year when I can have the same for free at one of the many fintechs? > Could a single person with a few part-time contractors run a bank of this nature? You have 4000 customers. If each of them has one customer support contact per year (your website better work well!) that's 11 calls per day or ~20 per working day.

Maken 4y ago

It feels like you are describing something like N26 and other German microbanks, except they offer real debit cards and the only fee is for sending you the physical card.

deleted 4y ago

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deleted 4y ago

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hackernewds 4y ago

Sounds like you're basically describing CashApp's debit card. Also gives cashback rewards

fuckingkike 4y ago

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