Currency mobility – the ease with which money can be transferred to, from and between accounts – is essential for both consumers and account providers, whether the latter are financial institutions (FIs) or other types financial services platforms.
“People expect to get things instantly,” Josh Stephens, vice president of products at neobank Current, told PYMNTS in an interview. “Now we live in a world of instant gratification, and I think money is really no different there.”
Despite the demand for greater monetary mobility, the banking system is still relatively archaic in the way it handles the transfer of funds, he said. Especially in the United States, the Automated Clearing House (ACH) system still determines how money moves from bank to bank. However, consumers do not understand all the infrastructure involved in transactions or why they are delayed. They just want to see results.
“[The demand is] be drawn, certainly, by a younger demographic [that] needs things to go faster and faster, but also because [for] people who really need access to money, getting it faster becomes the main issue,” Stephens said.
Lifestyle changes have influenced the demand for better monetary mobility, he said. Whether it’s paying shared rent, splitting a meal bill, or simply sending money to friends, consumers want their electronic transactions to be as quick and easy as cash transactions. , without having to find change.
“These are things we expect to happen right away, and the need to keep pushing in that direction is pretty critical right now,” Stephens said.
Make financial mobility a priority
Stephens said Current, as a neobank, has always prioritized ensuring account holders can transfer their money as quickly as possible. One of the first features the company offered was the ability to make direct deposits available to account holders two days before those funds would normally appear in their accounts.
“Over time, we’ve invested in everything from instant deposits to instant peer-to-peer transactions to instant cash deposits,” he said. “All of these things are driven by the idea of getting the money to people as quickly as possible.”
Even Current’s approach to overdraft protection helps make money easier to move. Stephens said the program allows account holders to overdraft up to $200 without logging into another account or taking other action. Although there are some eligibility restrictions, the program allows account holders to avoid overdraft fees or unpaid bills due to late deposits or small miscalculations.
“We’re helping people bridge that gap with instant access to funds we know are good because they’ll come on their next paycheck,” Stephens said.
Current’s instant cash deposit system allows the neobank to provide cash deposits without having physical branches. Through a FinTech partner, Current offers account holders the ability to withdraw cash at multiple national retailers and have it credited to their accounts. The account holder uses the Current app on a mobile device to find a location, and the app generates a barcode that can be scanned from the mobile device screen. At the chosen location, the customer simply hands over the money and has the barcode scanned for it to be credited instantly.
“While I think we’re heading towards a cashless world, that’s certainly not the case right now,” Stephens said. “So it’s always very important for us to be able to handle fast cash experiences, whether it’s putting money in or taking money out.”
Maintain the leadership advantage
Smaller neobanks and FinTechs have led the way in offering money mobility solutions, Stephens said. From faster access to direct deposits to innovative overdraft solutions, many of the features the big FIs now offer have been available for some time from companies like Current. He said he thinks digital-focused small businesses may be more nimble, but they’re also driven to find innovative solutions to stand out. As innovations become mainstream, neobanks and FinTechs will continue to find frontiers that the big players have yet to cross. For Current, that means making sure customers can access their money as quickly and easily as possible, Stephens said.
“It’s not so much about ‘How do you rewrite the rules?'” Stephens said. “It’s more like, ‘How do you [remove] the complexities and complications that currently exist in the financial system and not forcing the consumer to understand why their money takes three days to be deposited in their bank? »
Stephens said Current uses the term “banker’s hours” — the historically short working hours of traditional banks — to refer to a time when banking services cared relatively little about convenience or availability. For FinTechs and neobanks who want to stay on the cutting edge of monetary mobility, recognizing whether a hurdle is truly immovable or just a case of “banker hours” will be critical.