Bluebird vs. GoBank: The Rise of the Non-Bank

NEW YORK (MainStreet) — Alpesh Chokshi has a money-saving tip for you, but the big surprise is the source: While Chokshi is a senior executive with American Express, a card long associated with the well-heeled, his target is decidedly the 99%. His message goes like this: If you are paying checking account fees, there is a cheaper way. A way that may cost you absolutely nothing for all the banking you need. American Express calls its product Bluebird.

Steve Streit, CEO of Green Dot, the prepaid card mammoth, has a similar message, because his company recently introduced GoBank, which is aimed squarely at consumers who are fed up with overdraft fees and other dings on their financial well-being.

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Probably the most obvious difference between these non-banks, as industry shorthand pegs them, and traditional banks is what happens with an overdraft. Regular banks hit their customers with fees — often $30. Just for declining a check.

Bluebird charges zip. So does GoBank.

Also, both will rake in new customers with histories of bounced checks. “What you did in the past doesn’t matter to us,” says Lewis Goodwin, who heads the Green Dot bank group.

Nothing more vividly makes the case.

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Call today the age of the non-bank — institutions that strip out the pomp, ceremony and fees of traditional banks. A year ago, Bank Transfer Day, the consumer movement to shift funds from big banks into credit unions and community banks, won lots of ink. But in 2013 the real gamechangers have come along, and these are financial institutions that do much of what traditional banks provide but with a radically downsized fee structure.

Bluebird promises no annual fees and has a user interface that makes it difficult to incur any fees, especially if the consumer has direct deposit of a paycheck or similar into his or her account. (Without direct deposit, there is a $2 fee per ATM withdrawal. With it, the network is free to Bluebird users.)

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