Changes to Checking Accounts

Free checking may soon become a thing of the past...

On July, 21st, 2011 new banking regulatory changes are expected to sharply limit the fees that banks can collect from merchants whenever a customer pay with a Debit Card/Check Card.  To banks this means the loss of an estimated 14 billion dollars in annual lost revenue.

Like most businesses, banks will need to start making up for theses losses by increasing their fees in other areas, including those charge on both business and personal accounts.

Recently, one major bank has started testing a new line of accounts that come with monthly fees ranging from $6 to $25 dollars, depending on the services selected. Some banks have started to scale back or completely eliminate their debit card reward programs. Some of the other possibilities are fees for using debit card and/or $50 or $100 caps on individual transactions.  some banks may start charging a fee for on-line bank bill pay.

Here's some things to look for:

Free Checking - There may be new conditions to avoid monthly fees, such as a requirement that you do all of your banking on line, maintaining a minimum monthly balance, and/or limits to the number of monthly transactions without a fee being charged.

Debit Reward Programs - Some programs may be completely eliminated or made only available to top tier customers who maintain certain balances or use certain services.

ATM Fees - Banks may start imposing out-of-network fees for ATM usage, or hiking these fees substantially. Fees may be charged using branch ATM in certain areas.

New Fees and Products - New fees for customers may pop-up, such as one for checking accounts where a debit card is also used.  A Customer who cannot meet new minimum balance requirements may be required to take a Prepaid Card in lieu of having an actual bank account. Think re-loadable VISA or Master-Cards.  Fees with these cards would most likely be incurred at the point of loading the card.

Fees (or lack of) based on a banking relationship - Banks may offer discounts, offset fees, and offer special programs only to those who are willing maintain higher balances or generate higher volumes of billable transactions on their accounts.  This may also mean such things as rewards points being earned at a substantially higher rate than normal.

If you have any questions regarding the overall effect that these changes may have on your business model, please contact CCS Retail Systems.