This is pretty unfortunate. I loved using Simple for three or so years; it was my first independent bank account. It was a great app and beautiful design with innovative banking features, like budgeting and super easy high-interest savings accounts. As soon as I heard about the shutdown I closed my accounts and moved away from Simple, and it seems like it was the right decision.
For anyone looking for an alternative, I'm using Wealthfront Cash now and I highly recommend it. They used to have super great interest rates but are now at about 0.10% APY, which is worse than others (I think you can get up to 0.50% APY right now at other places, with caveats). Although I keep minimal cash so it's not a huge difference. They do track the Fed interest rates pretty well, so I think many of the alternatives are just behind and will eventually have to lower their interest rates too. They have some nice features that Simple used to, like different categories and automatic savings/transfer to investment. The one sticking point is that they don't support cash deposits (perhaps it's possible through their partner Green Dot?), so I use a big bank checking account for that and nothing else.
I switched to One Finance since their website/app seemed clean (similar to Simple). It has tools for creating multiple "Pockets" that you can spend from. You can even setup virtual cards that spend from a specific pocket. I probably won't use any of those features since I use YNAB for managing my money now. I also use HMBradley for savings since they have 3% APY. One Finance also has a 3% "Auto Save" pocket which can do debit card round-ups and up to 10% of your direct deposit. I might use for easy access to move savings into my "Spend" pocket but you can't move money directly into that account, it has to come from direct deposit and only up to 10%. HMB let me dump my emergency fund in and start earning 3% APY which is nice.
I gave One Finance a try but found their rules and inflexibility incompatible.
They don't have a 'joint account' option but claim you can share a pocket with someone else and it works the same.
Except when you have an instrument that you need to deposit/credit and it's made out to two people. They won't credit it to the 'shared' pocket because technically that pocket is owned by you, not both.
Tried to work with them for a solution but all they could offer was that I could deposit/receive it at another bank and then transfer it. When I closed the account they warned me that once closed I could never come back(they don't allow you to become a customer again in the future if you close your relationship with them). Another odd rule. And no auto transfers and no ability to deposit a paper check(at the time)
The benefit wasn't worth the hassle and I moved on.
Yeah, I can see how that would be a deal breaker. I don't need a joint account and just want a pretty website/app to hold my money so for me it fit the bill. I appreciate how the One Finance team is active on their subreddit and seem to be pretty good at communicating the roadmap with the community. But I totally get that it didn't work for you.
Since they bought Simple I'm hoping the features will trickle to their customers.
What they have now is close enough for now. Similar but there are 3 "pockets" -- two checking and one savings. And they have auto transfer. (One has auto transfer now also)
Bills/utilities/relatively fixed costs come from one pocket, dining/entertainment/variable costs from the other.
Excess is moved manually every couple months to savings.
This may be unfounded, but I am pretty skeptical of any bank or service that offers such high APY for a savings account. The effective federal funds rate is now about 0.6%, and Wealthfront is really clear in their communications on how the interest on their cash account is directly tied to that rate. More generally, although I am not an expert, I am not sure how any bank will be able to maintain interest rates that high without somehow making money off you, or coaxing you into doing something that is actually profitable for them, when you don't see it. Especially because if they actually want to call their account a checking account, they are subject to the same legal imitations (amount in reserve, ability to make loans) as other banks.
Looking at One Finance and HMBradley, these 3% APY accounts seem to only be added to as a percentage of your direct deposit paycheck. For HMBradley, that rate only seems to kick in if you save 20% or more of your paycheck each month. I am not a financial advisor, but this seems way more than anyone should be keeping in cash. Main reason being you should only keep it for liquidity and emergencies and nothing else, because otherwise you're basically losing money to inflation.
The median American household makes $60k and has a net worth of $120k. The standard financial advice is to have an emergency fund to cover about 6 months of expenses, which we can say conservatively (adding in any other cash people keep) would be maybe $30k. To stay at that level with about 1/4 net worth in cash, you should save 25% in cash after expenses. The most common budgeting rule is 50% (needs)/30% (wants)/20 %(savings), meaning that to stay "even" you'd actually want to save at most 4% of your paycheck in cash (this way, 25% of your net worth growth will be in cash). This is not even enough for the lowest HMBradley tier of 0.50% APY.
I think all the assumptions I made are pretty conservative, namely that expenses grow linearly with income. I'm going to guess that if you're higher income (eg 2x median) your expenses will not be (they will maybe be up to 50% higher), so you should save even less to keep your emergency fund. Therefore 25% of net worth in cash seems to be a pretty good rule of thumb, if even too high for higher net worth households. You don't bump into that unless your total spending is 20% of your paycheck each month (the number of people like that must be really small). So one way or another, you're losing pretty significantly keeping that much in cash.
I’m pretty sure I agree with all your points, that’s why I don’t use HMB as anything more than a place to keep my emergency funds and get a high interest rate. I direct a small portion of my paycheck via direct deposit and that’s enough to trigger their logic to activate the saving rate (you are required to have DD). HMB is better than One’s “Auto Save” pocket because I can move in money at anytime and it qualifies for the saving rate vs One having to only come from DD (you can’t move money into that pocket).
Edit: With the way I only send a small % of my paycheck to HMB, I don’t have to care about saving X% since according to their calculations I’m always saving 100% of my “paycheck”. The rest of my paycheck goes to One Financial where I use it as-needed without worrying about disqualifying myself from a higher saving tier.
Gotcha. I didn't consider just putting a small amount of direct deposit into HMB, that's pretty clean! Might try it myself :) I doubt they expect most users to do something like this though, which may explain why they're able to offer a rate that high.
Absolutely. I know a number of people use this “trick” and it’s been working for me for over 6 months. I can’t remember if referral codes are allowed here but I have 2 invites which let you jump to Tier 1 (3%) right away instead of having to go up 1 tier a month (it skips waiting 3 months before you hit 3%). I used a Black Friday deal that gave the same “perk”.
Full disclosure: using my code would give me 1 “undo” or something like that. Essentially it would let me move up a tier 1 time if I were to fall for some reason. I don’t think I have any use for something like that but I always fell a little scummy offering referral codes so I didn’t want to leave it out.
I also switched to One Finance, just over a month ago, and so far I really like it. I also started using YNAB almost a month ago to try to help with the budgeting things I was getting from Simple but aren't really there in One.
Kind of unconvinced about YNAB, I want something that does more "autopilot with corrections", but YNAB seems to be "everything manual so you know where your money is going".
I switched to One Finance (after trying several other banks like Monzo, Qube Money, Douugh among others). I really like the simple interface, and it's pretty similar to Simple in terms of functioning. In some ways, it's better. There isn't the goals/expenses feature, but I'm pretty sure it's on their road map. I'm able to use the pockets feature for now. They allow scheduled transfers between pockets. I just have to calculate before what needs to be added to each pocket I made (like the percentage of my income) to correspond to goals/expenses. Scheduled transfers to pockets that act like goals receive an end date and an amount transferred each time to reach the goal. Scheduled transfers to pockets that act like expenses don't receive an end date and receive a fixed amount of my income on the days I receive a direct deposit.
Like the cash envelope method of budgeting, they also allow you to select which pocket the current transaction will come from, so you can use specific pockets for different categories e.g. a pocket for groceries/food. The system would be more useful if transactions could be categorized automatically like Simple allowed you to do with goals/expenses. However, I found Simple's categorization to not always be accurate. I ended up categorizing a lot of transactions on my own.
It's also pretty cool that each of the pockets also has separate account numbers and virtual debit numbers (if necessary). I linked each of my credit card accounts to separate pockets independently.
Btw, I withdrew all my money from my account out of anger as soon as BBVA announced the transition haha. The whole thing was very confusing to me. Simple's product is far superior to anything of BBVA's or PNC's. Both companies should have been transitioning in the opposite direction to Simple's product and system. This whole process started after BBVA announced that their US operations would be acquired by PNC. It's pretty stupid too. No one I know decided to stick with their account. They definitely lost a lot of customers.
I wasn't entirely happy with Simple; their base service was solid, but I was hoping for some level of spending analysis that I was never able to get, and their offering stayed static for a very long time.
PNC's Virtual Wallet was on my radar years ago as an alternative to Simple, but I never gave it a try. When the PNC purchase was announced, I thought for a bit about just letting it roll over and trying Virtual Wallet. But then I looked into the fees section and found their overdraft fees are both fairly high per instance, and capped fairly high per day. IIRC, you could run up $140 of fees a day. Not a huge concern of mine specifically, but I don't want to support a bank that's sucking off the overdraft fees teat.
I ended up setting up a spreadsheet of my fixed expenses per paycheck, and then just set up One scheduled transfers of the amount that spreadsheet tells me to. That works at least as well for me as the Simple Expenses (which had a lot of annoying warts).
I used YNAB for years but their rigid budgeting philosophy of “giving every dollar a job” never clicked for me. I just switched over to Lunchmoney and appreciate the flexibility it offers.
I used to use YNAB before it was a "web app", and it was pretty auto-pilot after setting up the imports/rules. It classified 98%+ of all my expenses and inter-account transfers without any issue. Every once in a while you had to classify a new transaction but that was rare after a while. Anyways, the ones that are rare like that are usually once-offs and you're already making notes next to them so you know what it was for.
Maybe I'm misunderstanding something, but I've watched several tutorials... The workflow seems to be: Every time you get paid, you go in and assign your money to your budget. This is the "make every dollar work for you" part. But that involves going to each non-green line item and adding some amount of your remaining money to that item.
It doesn't really have an idea of when expenses are due (though you can set up dates on goals, but multiple tutorials I watched recommended putting the due date in the name, so you can manually sort the items. It also doesn't have an idea of when you get paid. So it can't do things like: "You're going to need to pay your mortgage of $X in 2 pay periods, so let's allocate $X/2 of this paycheck to the mortgage expense.
In fact, it doesn't support even "add the remaining amount for this expense", so you're going around typing the dollar values of different expenses.
I understand that this is part of their design to get people more familiar with their money and where it's going. Maybe if I was waaaay off track, and really pressed for money, that would be valuable. But I'm 90% on track, my worries are kind of higher level.
Again, maybe I'm misunderstanding something. But I've watched hours worth of tutorials, by YNAB and others, so I've at least done some level of research. :-)
I think they went a little too-heavy into the "manual" part of YNAB at some point. Internally and from the UI (YNAB 4) it has everything to do the stuff automatically and that's what I do.
E.g. When I get paid, that gets loaded into YNAB using a bank-import. So even if the rules don't run, I just have to go through all my "transactions" that got loaded from the bank import and just assign to pre-defined "payees". Further, each payee has a linked category so I don't have to categorize what expense that transaction was for, because it's implied by who the payee is. E.g. A butchery store payee means the category is e.g. "Groceries - Food - Meat" or just "Monthly Groceries". YNAB also has a filter where it highlights all transactions that haven't been assigned.
With the above stuff, there is no need to do any manual or scheduled expenses. The only time that doesn't apply is when you withdraw cash and spend it that way. If you do a lot of cash transactions, you'd have to do that manually unfortunately. But for myself, what little I spend using cash I just zero-out my "cash" account every once in a while with a manual transaction that is an "unknown expenses" budget category.
Some of the stuff above is specific to the YNAB 4 desktop software - before they converted to a subscription web-based tool.
Goals are going to be your friend here. I have goals on all but 1-2 categories (categories that I rarely contribute to or are just holding the money, like my taxes for freelance work) and I can select all my categories and auto-fund them all in like 3 clicks. That's pretty much all I do on pay day, go out to the furthest month I want to budget in advance, select all category groups (or most if I don't have enough money for all) and click "Underfunded" which will put the right amount to cover my goal for the month. If you set up recurring transactions the "Underfunded" button will fund it exactly what it needs. I almost never enter numbers manually. It took me 2-3 months to get my goals dialed in because I started with guesses and went from there and sometimes I still find myself saying "Ok, I'm always pressed on this category and it's more important to me than X so I'll start funding it more going forward".
You are correct that it doesn't have a concept of when you get paid or when your expenses are due, though I set up recurring transactions for everything, even things like utilities that fluctuate. I just go in on the first of the month and adjust the pending transaction to be the correct amount for my electric/water/sewage and save it. The whole idea of not telling YNAB how much I make a month was very confusing to me at the start coming from tools like Mint but there is a method to the "madness". For YNAB you never count on future earnings, all you can spend is what you have at this point in time. For the first month or two you might not finish funding the current month until part way through it but the goal is to get 1+ months ahead on all your spending so that you are always spending last month's money instead of living paycheck to paycheck.
I tried YNAB4 (app-based) and nYNAB (web-based) both once before the most recent time I tried YNAB (starting May 2020) and this last time was the only time it "clicked" for me (and the first time I really got serious about my finances). YNAB has been literally life changing for me. I went from living with a very small buffer (despite my well-paying job) to having 3 months in the future fully funded. The peace I mind I get from knowing I could lose my job tomorrow and be fine for 3 months minimum (I'd probably cut some categories and/or plunder some savings-based categories to stretch it longer) is amazing. My bank account has never had this much money in it in my life and despite having to take a 20% pay cut for about 6 months, due to the pandemic, I stayed on track for everything and continued to grow my net worth.
I know I probably sound a bit like a fanatic or a "true believer" but YNAB (once it clicked for me) changed how I interact with money and my finances as a whole. I really hope it works for you or you find a tool that clicks for you if it's not YNAB!
I'm happy to answer any other questions you might have on it. I'm forever grateful to the friend who nudged me to try YNAB again and I feel obligated to "pay it forward" whenever I can to help other people get started on it.
I found that with One finance, you couldn’t pull money from any accounts linked with just a routing number and an account number. That was a dealbreaker because I don’t type banking usernames and passwords into other websites for security reasons.
You can always fall back to linking via Routing/Account number I'm pretty sure. Just enter "fake" in the Plaid search box for banks (or any string that don't match a real bank) and they will give you an option to link via Routing/Account number.
> As soon as I heard about the shutdown I closed my accounts and moved away from Simple, and it seems like it was the right decision.
Indeed, getting out before things fully wind down is going to go smoother for so many things; a good habit to get into.
> I think you can get up to 0.50% APY right now at other places, with caveats.
My primary credit union, Star One, has 0.5% on savings for the past year? or so, field of membership includes Santa Clara County, Alameda County, Merced County, Monterey County, San Benito County, San Joaquin County, San Mateo County, Santa Cruz County, and Stanislaus County; ask around for a referral code because there's a decent referral bonus; if you jump through hoops, you can get 0.5% on checking too. Penfed has 0.45% and no geo restrictions if you join a club (but I haven't done it). Capital One has 0.4%, but is Capital One. If you're getting 0.1% you're doing it wrong.
This looks quite interesting, thanks. I had heard of the 4% on $3,000, but not the 1% no limits (although one should certainly consider the FDIC limits). No joint accounts is a bit of a headache, but twice the interest might be worth it.
Capital One screwed me over when I had a credit card with them about 25 years ago. It was less than $100 but I never forgot. The day they announced they were buying ING is the day I moved my money elsewhere.
I'm sure they've lost far more by losing my business than the money they squeezed out of me years ago.
They feel skeezy, from years of marketing and targeting of their credit cards. I liked the ING Direct branding before CapOne bought them. No specific issues or experience though.
I got screwed by Capital One when they refused to wire my funds to a different institution when I needed them to for a big stock option exercise. The rep on the phone told me their policy was to only do wire transfers for home closings. They wouldn't budge, which seemed shocking and completely unacceptable to me, so I initiated closing of the account that same day.
Have you heard or tried DEFI yet? Ethereum has grown so much the past two years, along with competitors like Terra, Fantom, Polygon, etc... You can easily earn 10-30% on stablecoins using dApps like curve.fi, yearn.fi, bancor.finance, aave.com, etc... It's a revolution of the financial industry and a new global decentralized settlement layer. Stop letting TradFi banks rip you off, experiment with DEFI and you will never want to hold money in a legacy bank again. It's grown from 0-85B in just 2 years.
Yeah, I have heard of it, and thanks for mentioning it to those who may not have. Like others have said, these have very few of the same guarantees people might be looking for in institutional accounts, especially that it's not FDIC insured or other legal obligations. They are also subject to risks like bugs in smart contracts or even larger ones like in the settlement/blockchain layer. And how disputes may be settled in these systems legally has not been tested and is still under question. They are also not a good fit for standard checking account features that e.g. Wealthfront Cash has. Sadly, the amount of users actually using cryptocurrency for real-world transactions is still really small. [1]
I think all this stuff around yield farming, liquidity pooling, etc. is super cool, but I think the standard advice applies: "don't put in more than you are willing to lose". Given all the unknown factors and risks I would not use it for my emergency fund or savings, and right now I would think about it more like a rather risky, potentially high-return investment. Even if these products are marketed as "protected accounts", they all say that loss of principal is possible.
[1]: See https://medium.com/swlh/how-many-people-actually-use-bitcoin.... The 2018 Chainalysis report estimated 13.5 million Bitcoin users with 2.3 million using it to make regular payments. Who knows how many of these payments correspond to "real-world" goods and services, but I'd guess it's not much. Compare this to Paypal with 300 million active users.
A FDIC insured savings account has a vastly different risk profile than difi tokens. Not to mention, the interest is paid in tokens, so if it goes south so do your returns.
Are any of those FDIC insured? Many people are reticent to put money in the hands of people that are not accountable to or insured by the full faith and power of the U.S. government.
It wasn't mentioned there, but for point of comparison, look at FDIC turnover time. If a bank shuts down and goes into FDIC receivership, it re-opens the next day. In some complicated cases, they shutter on Friday and re-open on Monday while working over the weekend to get things in order.
Yes, that's a completely separate ball game, and is less complicated by the fact that they prioritize re-opening the brick and mortar banks themselves not a purely online bank. But - it feels like it should be handled better in a software world, not worse.
> If a bank shuts down and goes into FDIC receivership, it re-opens the next day.
Have I got a story for you.
What you described normally happens.... Unless the bank fails so hard that no buyer for it is found, and then the FDIC insurance kicks in.
I know, because it happened to me back in 2012. :-) My bank failed, and they were in such bad shape that nobody wanted to buy it! I got an email on a Saturday morning stating that my bank had failed. Here's a copy of said email: https://imgur.com/a/HR42BxZ
The following Thursday, the check from the FDIC for the contents of my bank account arrived in the mail.
While going through that process was probably stressful and
scary, it's honestly a bit refreshing to see that "the system" works as intended.
I think the average American takes the words "FDIC Insured" for granted, assuming that the worst (bank failure & closure) will never happen. It's nice to see some proof that things will be OK if/when that happens.
Especially egregious given that, since it was voluntary on the bank's part, they could simply (haha) have transitioned different people at different times. Start with transitioning a single customer, make sure it goes well, then a few dozen, etc. Spend a little money on incentives for people to volunteer to go early, it wouldn't take that much money to get a few dozen volunteers.
It's one thing if it goes poorly in a disaster-response kind of situation, where you could not practice beforehand. But this is a self-imposed transition, with at least some control over the timeline, so they should have been able to find these kinds of issues in beta testing.
I’ve been a simple customer since the beginning. I use Novo banking for my business after I had major problems with Chase when they returned a $16k check and blamed it on me then locked me out of my account, truly a horrific experience for a customer with a 20 year business history. But I digress. Overall I was pretty happy with simple.
When I came to this transition or any transition like this I take it as serious as a heart surgery, knowing one wrong move will send me into a gauntlet of forms and hours of phone calls. Situations like this, on this scale might be rare but on a personal level I’ve had terrible experiences with an assortment of companies due to malfunctioning software or bad employees.
I was warned about the simple transition weeks in advance. I completed the transition Saturday morning with no errors. My accounts are working fine. Sorry others didn’t have my experience.
The adversarial/cost-centre nature of these relationships makes me wonder if there need to be more services offered to the public to handle these issue: much like a company might use a collections agency to collect debt, maybe citizens can outsource things to services, like cancelling an account, requesting data, restoring an account etc.
To some degree, laws may need to change (or be clarified) to support this: the legal right to have representation, so corps can't try the "we will only talk to the billholder"-BS, support SLAs and/or onbudsmen, right wrt recording support (if they can, we should be able to do to, without loss of support), penalties for giving incorrect information, etc etc etc.
I've occasionally felt so wronged by a company, with so little avenue for recourse, that I would happily pay someone to impose costs on them. I thought of hiring my own call center employee to try to get the highest-paid support person on the line at said business and hold them there as long as possible. I thought of offering this as a service, since I know I'm not alone in feeling powerless against the mega corps with their mile long service agreements and binding arbitration... But that's not a business that does anything but waste resources and impose costs, so not something I'd actually be interested in starting. I've thought for a while now though that there is an opportunity for exactly what you describe, a professional phone support person. Done at scale you'd quickly learn what fees each service provider is willing to waive, what deals can be unlocked with the right magic words, and you could offer real value as a tech support consierge.
Individuals don't know their rights, and it is often inefficient to find out, or make legal challenges for a one-off; it changes if this is a reoccurring task.
It is exactly what you're describing. You can cancel things, get fees reversed, file lawsuits, contact companies, send data takedown requests, etc. It's not prefect, but it's definitely great..
That service is mega broken. Website will take your money,
Send verification and then won’t let you login. Had to dispute charge. There is no method to contact any human. This was scammy as fuck
"We know not having online and mobile access to your account is unacceptable" is some refreshingly clear and direct apology language.
I don't know if the typical corporate bullshit-speak resonates better with the average person, but this apology would make me a lot less angry with the company (if I were affected) than the typical vague statements companies seem to emit in such cases, even though the end result is the same.
FWIW, this was standard operating procedure when dealing with upset customers at Apple Retail. If I remember correctly, it was referred to as "Acknowledge, Align, Assure". This is the acknowledging bit, and the latter portion of the sentence contains the assure bit ("we will continue to do all we can").
I don't know. I do like their statement since it's direct and not vague as you said.
However, I've seen multiple times on Internet that a company made an apology which looked fair to me as a bystander, while people who were affected screamed "sorry but not sorry".
I think it makes a big difference emotionally depending on if you're involved or not.
Sure, but at what point does a genuine apology look identical to one that is "fake"., and at what point will people just be unhappy with any response they give? I mean, losing bank access is pretty ridiculous, so it's not exactly uncalled for, but then the response to their message shouldn't be "this is unauthentic" but rather something along the lines of "this does not give me my bank access back" since no response would satisfy them.
My favorite response is the standard: “At [Company] we take [X] very seriously.” Where [X] is what recently catastrophically failed because they didn’t take it seriously at all.
'Sure, but at what point does a genuine apology look identical to one that is "fake"., and at what point will people just be unhappy with any response they give?'
It's about what they're apologising for. For instance, if (hypothetically) they stole everyone's money and spent it all on hookers and blow, then their apology for dropping web access is completely besides the point.
The main problem IMO with fake apologies is that they're a shitty attempt at pretending to be reasonable to those who aren't aware of the situation (and by extension, portraying people who are still mad and ignore the 'apology' as being unreasonable), without actually acknowledging the real problem or committing to fixing it.
AFAICT Simple is giving a genuine apology, btw, I'm just speaking generally here.
Just in case I wasn't clear, I think we both agree that message being unauthentic is a different matter from the incident itself. Just that angry people often can't/wont distinguish the two.
I pointed this out because GP seems to not be affected, so his view won't be obscured by this; but the phenomenon should be noted.
They are now at EOB of the first business day after this failed migration, and have still not sent any email communication, including the instructional email they promised as part of the migration. I don't know that I'm angry, but I certainly won't be trusting them with any business as soon as I have access to my account again.
Maybe I care too much about market power and consolidation, but this part struck me:
> [Simple] was purchased by BBVA in 2014.
> BBVA said in January that it would be shutting down Simple later in 2021. The decision came from the company “reassessing its goals” as part of a planned sale to PNC Bank, which reached an agreement to acquire BBVA’s US operations in November 2020.
The consolidation problem seems to be getting worse everywhere. [1]. Gotta imagine they're connected.
This has been happening everywhere over the last decade or so, and it's the result of super loose fiscal policy. When debt is cheap for megacorps, banks and high net worth individual, money creation goes into over-drive, but not for cash strapped companies or individuals. Central banks doubled down on this last year as well -- it's debatable whether it's what they had to do or not but at this point I'm convinced all central banks really do is start bubbles and encourage moral hazard. Monopolies and duopolies emerging left and right.
"Tech" Startups these days look more and more like convenient customer/innovation acquisition vehicles for inevitable big fish and less like small businesses.
True. So treat deposit accounts and instant payments as a utility and have the Fed hand them out to everyone. If you want to offer something more fancy as a fintech or commercial bank, go for it if you can make the economics work.
Search keywords for more info on this topic: “FedAccounts”, “Banking for All”
Disclosure: I am actively advocating for this policy with policymakers.
That sounds like something that should definitely happen -- my worry is regulatory capture. I have very little confidence in the ability of politicians and related agencies to predict and defend against the machinations of private industry who would try to eke out a corner of the government-mandated gravy train for themselves for all time.
Would FedAccounts be essentially FedWire extended for regular people? It seems like governments don't really share information otherwise we could just lift the tech from Sweden (Swish). It would be an absolute sea change, but I want I want to starve is the finance beast as a whole -- the hedge funds that front-run and sometimes directly exploit pension funds, etc.
I personally think that one of the biggest things someone could do to unwind the current financial system's largess is just ply a bunch of money/expertise/tech at improving credit unions. I maintain an account at a credit union and I absolutely love it, the people that worked there actually seemed happy, plugged in to the local economy and society. It is bonkers to me that anyone still banks at the large institutions (the ones famous for overdraft "protection") with local credit unions being as good as they are (and often very competitive on rates). If the large institutions don't get all the deposit flow, then they can't offer the huge leverage to the firms, HNW individuals, etc -- credit unions aren't going to be out there offering 15x+ leverage to Archegos Capital.
Since what I've written is essentially a wishlist/vapor-policy, let's reinstate Glass-Steagall while we're at it.
> Would FedAccounts be essentially FedWire extended for regular people?
My general impression with this movement, is not that it is a way of easing transfers, but rather a nationalisation of bank accounts. The subject crops up frequently in Denmark, where citizens are required to have a bank account, that the government knows about. But only private banks offer bank accounts.[0] So it raises the question; why does the national bank not offer bank accounts?
Then public interest, rather than private, could set rates for fees, costs and interests on these bank accounts. It also follows that in this scenario, it might be worth considering whether private banks should even be able to create money the way they are permitted to now, and only let the national bank 'print' money (both physical and digital).
[0] It should be noted that the law requires private banks to offer these account at no cost to citizens (though just one per citizen).
> My general impression with this movement, is not that it is a way of easing transfers, but rather a nationalisation of bank accounts.
Well that’s terrifying in general, but the Denmark case you’ve laid out sounds just about perfect.
Denmark has found a way to use it’s capitalism — a “public private partnership“ with a captive audience, but properly regulated so they can’t absolutely fleece customers.
I think it’s fine that private banks create money because in the reverse it kind of distributes power — feels like a good artificial restraint (artificial only in that the government could theoretically just undo it) on the government.
> It is bonkers to me that anyone still banks at the large institutions (the ones famous for overdraft "protection") with local credit unions being as good as they are (and often very competitive on rates).
And whenever you ask someone why the hell they use UltraMegaBankOfAbuse, they always cite some far fetched scenario that makes Credit Unions slightly less convenient. “Well, if I ever found myself in the deserts of Morocco, and needed to use an ATM to pay my electric bill, there wouldn’t be a Credit Union branch there, so checkmate! I obviously need to bank with Chase!” It’s like they are looking for any excuse to abuse themselves.
I used to bank with a local credit union, and now bank with one of the largest banks in the United States. The credit union was nice enough, but they signed up with that mobile banking provider that many credit unions seem to use, and the usability went down the drain. I tried to find a local credit union that was not using that platform, but couldn’t. The large bank’s app is great.
Also one time the credit union let someone sign my account up to pay for their car loan, because the clerk who set up the automatic payments accidentally typed in my account number, which was one off from the car loan holder’s. To their credit, the credit union was quick to resolve the issue, but it left a bad taste in my mouth that it was so easy for them to make that mistake and nothing on the back end to catch it.
i have a similar experience - CUs sometimes outsource too much. In mine, they outsource Statements, Transfer/Bill pay, etc to different vendors/companies. It all works seamlessly with some fancy single-sign-on...except when it doesn't. I don't know who all have my financial details.
I realized after I posted this that account number is ambiguous in this context. It was my membership ID number at the credit union, not the bank account number itself. Their membership numbers were nine digits long and you would use them to identify yourself when you interacted with the a credit union representative over the phone. When I spoke to the support agent about that mystery car payment they said, “It looks like your member number is 649345121, and the real owner’s number is 649345122 so they must have mixed it up on the paperwork.” Which lead me to believe that the loan originated in house and the paperwork just asked for you membership number and which kind of account to use for the automatic payment. I guess the checksum was supposed to be the human who entered the number verifying that the account holder information matched the information on the form, but that didn’t happen in my case.
A significant part of the world - all of the EU, but also a lot outside it- uses the IBAN standard [0]. The checksum algorithm is mod97, two digits indeed. Very often, there are two checksums though!
Also, in my native Belgium, bank payments have had automated payment processing structured messages attached to almost all {b,c}2b payments. That one contains a similar mod97 check.
Given that even credit card numbers have a security number, aka checksum, it's a little silly that they just enter any id number without one, esp for things like loans.
Credit card numbers, bank account numbers and suchlike often only dedicate a single decimal digit to the checksum which severely limits their ability to detect errors.
And if numbers are getting keyed in tens of thousands of times per day across a large business, and mistakes happen hundreds of times a week, a checksum that catches 95% of errors will still let tens of errors go undetected every week.
Thanks for sharing these examples, pretty understandable impetus to move.
What annoys me is that these are both problems with technical (mostly) solutions. The big banks don’t have magic humans that don’t make mistakes, they just have better systems that reduce error, and can fund development of better apps.
I personally use only the web client of my bank, and am very happy with it, but will admit that the mobile banking app is less than desirable. Wish they would all just make PWAs and call it a day.
I'm with a credit union. I'd never trust my phone with access to my bank account, but I use their web site. Does fine. I can check my balances, pay bills. What else do you need?
I'm sorry to hear that, but usually there is more than one credit union in an area -- did they all have this hang up?
I'm fine with Chase and other national banks existing, but I think a lot of their scale (and corresponding ability to perform misdeeds) is predicated on the fact that people (ex. college students) go there FIRST. The defaults need to change.
I had this happen to me as a new employee of a major company with its own private CU. I moved across states and needed a new local bank. Applied at the branch in my office and a few days later got my dollar application fee back. Their shortsightedness was astounding.
As a US expat living in Europe, credit unions are a non-starter from me. Even big banks are not very good. USAA has been the best so far because they are set up to support military folks living over seas. I'm not in the military but I benefit from what they do to support those people.
Neither does mine, but at this point a lot of services have popped up to fill the gap. Ten years ago western Union worked in a pinch, now there are lots more options
having a public option that’s not subsidized and competing fairly is a reasonable policy. the biggest potential issue i see is having the federal govt middle-manning all those otherwise private financial transactions, but that could be mitigated by having a private and a public bank account, with instant transfers to move money back and forth. and offering these through the usps seems like a winning move, through their well-established post offices all across the country (at least the ones not sold off at fire-sale prices in the past few administrations).
Just an account that can't block people for no given reason would be an improvement. There's a huge unbanked population that's increasingly shut out of modern life, or at least unduly burdened with alternatives that aren't always accepted like reloadable cards.
I support expanding access to the financial system. But many of those people are blocked because they wrote bad checks. What would you suggest to do with them?
Don’t offer checks nor overdraft protection. That way, you’re not offering credit and don’t need to gate them from a deposit account because of a previous bad check or other derogatory credit event.
Simple did not offer checks (at least pre BBVA acquisition, when I had an account with them), for example.
The Fed is rolling out instant payments in 2023, after which I expect checks to be obsolete and no longer offered by financial institutions.
> The Fed is rolling out instant payments in 2023, after which I expect checks to be obsolete and no longer offered by financial institutions.
We are at least a decade away from the time when checks are not used, probably two. For that to happen the baby boomers must be nearly completely gone from the workforce. The reason why we still use checks is because a lot of businesses are still owned and operated by the boomers whose processes are
send out bills => receive checks => mark payments on accounts in folders => deposit a batch of checks into an account.
Those are the lifestyle business whose owners/managers are in the last decade of retiring. They won't be either upgrading or selling them.
Some places add on fees for paying by EFT or credit card. When the fee is something like the greater of $3 or 3%, that's an incentive to continue paying by check.
> But many of those people are blocked because they wrote bad checks. What would you suggest to do with them?
Allow only direct transfer of money already in account, do not accept checks?
From stories about fraud - ones that require bad checks are especially unusual to me. Because in Europe checks seem to be basically gone, at least I have never accepted or made one.
In theory bank transfer may be reversed, but I have not heard about popular frauds centered around it, so it is likely harder to achieve.
I can make a bank transfer, but only if I have enough money in my account.
Is it solving the problem, or is having ability to produce checks absolutely necessary in USA and not replaceable by bank transfers for some reason?
Those in the EU have IBAN and instant transfers (both in country and between other countries in the EU; I believe the max SLA for payments to settle is no more than 20 seconds). The US does not yet have such a system, but it’s being built (domestic instant transfers).
>So treat deposit accounts and instant payments as a utility and have the Fed hand them out to everyone.
This would be awesome, but it's never going to happen as the fed is the banks' way of controlling the monetary supply. It's their tool, deliberately not beholden to the populace.
I think you are confusing monetary policy with retail banking. Having the post office offer banking services (for example) has nothing to do with "the Fed"'s ability to enact monetary policy.
I was pointing out that retail banks effectively control monetary policy through the fed, and they use it to benefit themselves primarily.
It's their beast and they use it to serve themselves. If other people happen to be able to eat as a result, they're okay with that.
>Having the post office offer banking services (for example) has nothing to do with "the Fed"'s ability to enact monetary policy.
Banks literally create money and loan it out at interest. The fed providing accounts allowing that would directly compete with their business. It's a conflict of interest to serve the public in any way that a bank does, and since they control the fed, they'll use it to block such things.
Fed accounts allow for rapid stimulus payments directly into citizen deposit accounts, instead of the Rube Goldberg IRS payments dance we’re currently doing. Stimulus payments then become a batch job.
They already do a lot of passport issuance and the like, so probably wouldn’t be too much of a problem to expand if they did it gradually.
That said, they’re currently struggling to even deliver packages or letters under
the new leadership (around the time of the election I had multiple mailed checks go missing permanently, and a letter take a month+ to go within the state where it’s usually 3 days max), so maybe putting our hopes on them to save the economy through a massive new program is not a good idea?
Of course. Current organizational failings do cause fallout and long term damage to retention and motivation of key staff, along with reputational issues leading to difficulty getting new qualified staff.
Definitely not unsolvable - pointing out that if you want the USPS to be a happy, well run organization that can take on a massive expansion in scope, it would take awhile and have to fight against the current inertia. It isn’t a slam dunk right now.
Right, it would make more sense for the US Federal Government to just create or buy a separate bank for this purpose.
The British government owns two notable banks, the Bank of England of course (but for less than a century) and the National Savings & Investment Bank ("NS&I").
The Bank of England doesn't have retail services, once upon a time it offered some products like mortgages to permanent staff but this ceased because it is in a real sense self-dealing, and it's hard to explain to a foreign central bank why their $100M unsecured loan to the bank's Chief Executive, who is coincidentally also brother of the leader of their country is a scandal when the Bank of England is loaning the price of a mid-size home counties house to some mid-ranking employee. I mean, these are different things, but they aren't different enough to make the point, so that programme ended.
NS&I however offers numerous popular retail services for ordinary savers in the UK. It has some conventional savings accounts (obviously paying rather little interest these days), term bonds, some specialist UK products like ISAs, but it also has the "premium bond" which is effectively a not very good savings bond except instead of interest you win "prizes" from the pool of money that would have accrued as interest to all savers. The idea being this is exciting like gambling, but you can't lose (except in the sense that on average you'd make more money with a conventional bond of course).
These are very different activities, they possibly reward different management styles, certainly they would share few resources if they were a single entity.
The idea of using the US Post Office instead is good, because the Post Office already has actual branches all over the country, but it would need to staff up considerably to do this work, so having a separate government entity responsible for the actual bank, with the Post Office handling the front-end experience seems like a sound idea.
A number of countries have used postal services for banking with good success (especially early on). I’m decently familiar with Singapore’s, but have heard of others.
> This has been happening everywhere over the last decade or so, and it's the result of super loose fiscal policy.
It’s not just loose fiscal policy, it’s also technology’s role in reducing marginal costs. It’s basically impossible for a smaller player to compete in commodity markets like consumer banking because the bigger player has lower marginal costs and can offer a more attractive price.
The same as Walmart/Target/Home Depot/Lowes/Best Buy dominating retail.
"last decade or so" ? The banking consolidation trend started in late 1980s and has been happening steadily ever since, it happened a lot with the 1990s fiscal policy and it happened a lot with 2000-2010 fiscal policy.
Antitrust is not a thing in America anymore. (Ok, my opinion, but really? Has there been any major antitrust suits since the Microsoft one? Please do say so if there was, I'd be interested in reading the case(s)).
Sadly, the act of many “traditional” companies acquiring relevant and/or competing businesses seems to simply lessen competition. So much for utilizing that acquisition’s unique edge on the market in terms of product, team, etc...
While certainly a privilege, I empathize with founders who reach their “exit” dream, yet remain in a moral conundrum over whether what they just did actually benefits anyone but themselves.
Banking is expensive- not only on operational topics, but also on Risk Coverage. Too much capital required, little returns on capital tied down. So it’s becoming increasingly difficult for smaller CUs to grow - they are doom to stagnate or merge.
Concentration is somewhat inevitable, sadly.
BTW Simple was not a real bank per se, most of the back office and core IT services (which amount to 80pc of non-branches cost) was provided by BBVA Compass (meaning BBVA had already consolidated IT and Ops in the US 5 y ago, to reduce capital contraints.
IIRC, the 2014 transition to BBVA (from Compass) also didn't go entirely smoothly. I had to contact support in that, and ISTR they said they were really slammed because of issues with the transition. My problem ended up being that I was withdrawing money from an ATM saying it was a "Savings Account" rather then "Checking", which used to work but stopped in the transition. Took a few weeks to figure out that was the problem though, because they were having other issues as well.
None of them are too big to fail. We have proven that. All banks should be regulated properly so that they can withstand risks from market excursions. In addition, all bank deposits are insured.
Did BBVA "consolidate" Simple, or provide a soft landing for them? If Simple wasn't long-term viable anyways, it's hard to see consolidation as the problem here.
We could have been viable. We were also the first movers, and had a uniquely bad scenario that required an immediate sale. Younger competitors are in the news for their $1b+ valuations (Chime).
We had courted an investor and our runway ran right up until the expected cash from said investor. At the last second, the investor pulled out of the deal. The cofounders and key team members mortgaged their homes to make payroll while we searched for a buyer to keep the company going. That buyer ended up being BBVA, and the rest is history.
The "additional support" they opened Sunday was a nightmare - lots of recordings on Twitter of the call center either hanging up on you in the phone tree, getting a rep who immediately says they cannot hear you before hanging up, or even reps who just laughed and hung up when you mentioned Simple.
I spent the better part of my Sunday calling trying to get my account unlocked, since it was automatically locked when their services collapsed during enrollment on Saturday.
This is entirely possible, though to me it seems more likely that an executive team ruled out doing transitions in batches. Then, when their online banking enrollment system encountered some reasonably-sized subset of Simple's 3 million customers Saturday morning, it simply keeled over.
In my account's case it was able to provision my account when I enrolled, but the web portal then threw up some opaque errors and didn't let me complete enrollment. Without the latter steps of 2FA/security questions/etc that I couldn't complete, my account was locked without access until I could reach a phone operator.
Now that there are (finally) services like Plaid providing API access to financial accounts, it feels like there is an opportunity to separate the front-end (UI, budgeting and reporting tools) from the back-end (interest payments, wire transfers) of banking.
The traditional banks will never be good at UX because they can't attract the talent. Their apps are always a bloated mess of web views. I loved Simple because it lived up to it's name -- it was dead SIMPLE! For example, 99% percent of the time when I open the app I just wanted to view the list of my transactions. Many banks can't even do that right. Other than that I primarily just want to move money in and out as easily as possible.
One example of a well executed front end / back end model is the Apple Card where Goldman Sachs manages the back end. The Apple Card doesn't have the best rates and rewards programs but to be honest I don't give two shits about any of that. I want it to "just work" like the iOS home screen. I want notifications not to be a buggy mess. I want fast and reliable access to support.
If Apple does checking accounts (backed by Goldman or whoever) and checked the basic feature set I'd switch to them instantly. Everyone's finances are getting more complicated with more subscriptions and such. Despite this headwind I still want to spend as little time as possible poking around a UX from hell as possible.
Simple was also running on a legacy bank back end... until they got shut down that is. Nothing can really prevent startups from selling out. (Obviously we don't have to worry about Apple being bought by Goldman and shut down.)
Capital One managed to buy Adaptive Path so it's possible to attract the talent in some cases.
An example that strikes me as a stepping stone towards this (although, I believe, a little less clear cut) is Up in Australia, a partnership between a software company and Bendigo Bank, e.g. https://up.com.au/blog/up-cycling-core-banking/
I've considered building the envelope budgeting system from simple using Plaid's free APIs. "Safe to Spend" and Expense budgeting are really what I enjoyed most out of Simple
You might want to check out One Finance [0], that's what I switched to. While I use YNAB for managing my money it feels like this is the spiritual successor to Simple in a lot of ways.
Interesting, I just started with them recently and haven’t needed support yet but I’ll keep that in mind. I’ll miss Simple’s support, especially in the early days...
I was in the same boat - check out DAS Budget. It's currently more or less a 1:1 clone of Simple's UX and is available as an open beta on both iOS and Android
It uses Plaid for its banking backend, and so far is working quite well for me and my partner
> Simple opened to customers in 2012 and was supposed to offer a digital-first approach to banking. In fewer words, it was supposed to be “a bank that doesn’t suck,” to quote one of its co-founders. The service had a website and app that broke down your spending and made it easy to categorize payments, send money, and set savings goals. It was purchased by BBVA in 2014.
Assuming that the user experience of Simple was a key selling point... does anyone know whether the BBVA user experience is now comparable? (Once the internal account conversion problems are fixed.)
Not even remotely. Simple was Simple in the way people mean when the say they want simple. Not bare, or sparse. Just very clear and easy to use. BBVA's interface isn't horrible, but it reeks of 2000s web banking.
I can confirm. Simple’s app was beautiful, elegant, fast, easy to use, didn’t flash unnecessary or ugly (Account numbers, innocuous warnings, Bad UI elements, Broken transitions, switching between the app and the web interface); things Chase, US bank, city, Bank of America are all guilty of. I loved being able to set aside money with the simple account.
Now I have first hand experience with BBVA as well. I’ll give it to them their app is pretty good. It’s clean, fast, and the transitions are good. Logging in is fast and easy. But boy the app experience is not anything I would call elegant. It was clearly designed by very square people with lawyers and accountants as their inspiration.
I had simple since the opened and loved them. when I heard they were shutting down I withdrew almost all my funds in February. but left a $250 in there for a month incase there were any autopayments i had missed.
When i tried to transfer the money out in March every transfer kept leaving the account and then coming back a few days later. Only managed to get the funds out by moving them into paypal.
Simple was pretty awesome. I've been a customer from day one and I started looking for a replacement as soon as they announced the shutdown. I eventually moved to Radius and it doesn't even come close to the level of experience of Simple. It's a shame to see them go down and in such a way. Has anyone who was a customer found a fitting replacement?
I was not able to do the account transition yesterday, but tonight it worked.
First thing I did was opt out of "overdraft protection".
It's was so nice with Simple because I never had to worry that they would start taking advantage if I ran out of money. They just declined the transaction. And apparently were able to operate that way for years.
But I wonder if they were just not able to compete with the profits of other banks that enjoy the lucrative business of kicking customers when they are down with overdraft fees.
Glad I migrated away when they announced the transition. Simple helped me get debt free. I was sad to see it go and haven’t really found a replacement that works for me.
I think in terms of feature, Envel is the most similar alternative I've found: https://www.envel.ai/envel-versus-simple/
They've been very proactive about collaborating with former Simple users, the main downside is no web app
My replacement bank (Ally) is fine but it feels clunky (website & app) like any other bank. Really liked how simple worked how seamlessly everything worked.
I'm always curious what actually happened on the backend here. Has anyone here had a similar situation happen on their watch? Postmortem analysis would be interesting.
The shutdown has been such a drain on my mental health. I’ve lost sleep most nights for the past 4 months trying all the replacements and I’ve lost money from none of them being helpful. Buying a cup of coffee is now anxiety inducing.
I don't know what your situation is, but I wonder whether you've encountered a downside of what might be considered "gamification" of budgeting apps?
Would it help to remove an aspect that has become too much of a headache? Or that you register as a much more important a challenge than it actually is, relative to your other goals (including a good night's sleep)?
FWIW, when I was tracking every penny (I'd literally have a GnuCash double-entry accounting transaction for every time I picked up a penny on the ground), I eventually found the accounting work was not worthwhile (except for lucky found pennies, which amused me). So I switched from breaking everything out into expense categories, to only breaking out expense categories with tax implications. Almost all all expenses other than rent, utilities, and insurance became "Misc."
I also (pre-Covid) turned my paper-money wallet into a fund that I didn't track, except for cash going into it, and to have maybe a monthly counting of the paper money in it. Occasionally counting the paper-money in the wallet generates a single big "Misc." expense transaction, to make the accounting software agree with the count of how much is in the wallet.
(An alternative would be to consider the money spent as soon as it went into the wallet. That's how I'm treating coins, when they go in the jar, so I don't have to count them. A Coinstar once a year or so is simply a rebate to Misc., since I'm not a CPA.)
It's not a complete replacement, but one former Simple customer has basically replicated the entire budgeting interface and integrated it with Plaid (so that it works with almost any bank).
There are a fair number of "app first" banks like simple was out there. But the problem is that you might not be able to keep using them in a few years...
Varo, MoneyLion, Empower, Chime, and others that can be found by browsing around on the app store are good. MX powered Credit Unions (like BECU) also are really good.
Marcus Inights is also a good app to use, but it's not super advanced.
While it's not an integrated savings/budget app like Simple, I think YNAB has a similar spirit as Simple + a great community. It's a pure budgeting app, but you'll know exactly what every dollar is doing.
As someone who switched from Simple to a “traditional” bank + YNAB, it is definitely a lot more in depth and less simple. I think it’s a good option for keeping track of everything and coming up with better plans though. One major downside of simple was not having credit card purchases inline. But Simple’s goals and expenses I think were easier to use even if less advanced. There is definitely more of a learning curve to YNAB.
I was an early Simple customer but ended up leaving the service when I found out their policy on being a digital nomad (not having a residential US address) was very strict. As one of the first online banks (I know Ally was a little ahead of them), I found this policy strangely prohibitive and closed my account. I ended up going to Navy Federal because my grandpa served in the Coast Guard and my experience with them has been phenomenal. Really no issues at all, no fees, website and app work as well as I need them to. I liked keeping my car loan in-house there and will eventually open a mortgage with them. The few times I've needed to visit a branch have been painfree. And because they're a military bank, they aren't as rigidly opposed to international addresses (but I use my friends US address and other services for international transactions just to be safe).
> As one of the first online banks (I know Ally was a little ahead of them)
Am I missing something? As far as I can tell, Simple didn't start doing business until 2012. I remember around 2012 opening my first on-line bank account and having a plethora of options. I had heard about Simple but it was still in beta and I couldn't get an account. There were on-line banks going back to the 90s, such as First Internet Bank.
>Simple opened to customers in 2012 and was supposed to offer a digital-first approach to banking. In fewer words, it was supposed to be “a bank that doesn’t suck,” to quote one of its co-founders. The service had a website and app that broke down your spending and made it easy to categorize payments, send money, and set savings goals. It was purchased by BBVA in 2014.
>BBVA said in January that it would be shutting down Simple later in 2021. The decision came from the company “reassessing its goals” as part of a planned sale to PNC Bank, which reached an agreement to acquire BBVA’s US operations in November 2020. The acquisition has not yet closed.
Why is it even possible for a bank - or any company really - to buy up its competition? Let alone buy it up, and then just shut it down.
It's like "we didn't like having to compete so we just used our orders of magnitude more wealth than the average person and just deleted them from existence".
It gets worse. There are plenty of examples of where a company in a dominant market position with ample cash to work with used bully lawsuits to bankrupt an emerging competitor, then bought them in receivership only to kill the company in total the next instant. For me personally the salient example is what Creative did to Aureal, because what happened is particularly clear cut. I'm not joking when I say the Aureal drivers and support website went offline the very day the bankruptcy acquisition committed.
I used to work for Fanatics.com. Together with UnderArmor, they outbid Majestic for the MLB jersey contract. Majestic had had the contract since the 70s.
Majestic immediately filed for bankruptcy. Which was good news for UnderArmor and Fanatics, because they didn’t have any ability to make baseball jerseys. So they bought Majestic for a dime on the dollar since it was bankrupt.
I don't know quite how to estimate the scale of how much of this is going on, but I think it's pretty clear society in bulk is relatively blind to this family of tactics, or to use PR terms, inoculated against reacting to it.
There are plenty of mid sized business that depend on an anchor client. Obviously that's not a great long term situation.
But it doesn't really distract from the particular dynamic we've been talking about in this subthread, which is a more aggressive and predatory version of competition that captures the deal then uses the courts to capture the already invested capital infrastructure from the side that lost the deal. This sort of tactic is enabled more by people who can market to investors via manufactured signals vs the idealized lassie faire market reality of the transaction.
I'm not pretending this is a trivial problem to solve, but I think it is very much a real problem, and the "they were fools and the market simply beat them" narratives fail to capture what's really going on here imo.
The way most banks deploy software is downright scary. It usually involves a lot of manual steps running DDL in some enterprise database to create and change lots of views and stored procedures. Those DDL scripts were developed against some shared testing and staging databases that usually have crucial differences not only in the data but also in the structure. Nothing is automated, no easy way to restore stuff. People generating Java EAR files in an IDE and Ops people copying them to servers. Lots of enterprise software that is barely scriptable and need long sessions of point click and type in some awkward web UI. And let’s not even talk when there are mainframes involved. Things working the first time would be the real news here.
Not a great ending! I’ve been giving Envel a go so far looking like a great alternative, they have an envelope system like simple to manage expenses, love the direction they are taking, they are releasing many new features like simple and really responsive support team..only negative is no interest on savings accounts which doesn’t bother me much anyway as automated savings helps me more, but I think they are looking at interest soon but more interested in where they are heading and being with a bank that gives a **t
I was a simple customer since before the BBVA acquisition, but once I heard that they were shutting down the main service I moved everything over to a cash reserve account in betterment, which I already had for investing. Since then I've opened an m1 finance account which had a 1% interest rate and 1% cash back if you use their debit card. (I tend to only use credit cards since the rewards are better)
Closed my account a few weeks ago. sad to see simple go, it was refreshingly easy and just worked, had great features and was something I never thought about since it just worked.
I’m switching to Chime. The BBVA site and app feel like a big step backward.
For example, I like this auto save thing where they round up your purchases to the nearest dólar and deposit the money to a high interest savings account.
Not that I'm by any means happen with the shut-down, but my transition to BBVA was super smooth. Went to Simple, it redirected to BBVA, followed the instructions to create an account, logged in, verified all my account balances were the same as before.
Now, my only desire is to come up with another solution to replace Simple's "Goals" with something. I loved being able to daily set aside money. I'm thinking I'll just make a self-hosted app for personal use and link up with Plaid, and then it won't matter what bank I use.
On the bright side, traditional banking will be a thing of the past soon enough. Already looking forward to tell my grandchildren how we once had to walk into large shiny buildings and queue up to create "bank accounts" (why those were ever needed is going to be a tough one to explain).
I recall when Simple transitioned from Bancorp to BBVA as part of the BBVA acquisition, and it... did not go smoothly. Days of downtime, and double-spends on transactions that did go through. As someone living paycheck-to-paycheck at the time, I promptly moved my spending (and my paycheck) back to a traditional bank.
You're probably remembering a different transition, which was the move from TxVia to Fiserv for debit processing. That was in the works before the acquisition and we were right up against a deadline, and it did not go well.
The later Bancorp -> BBVA transition was very smooth, aside from BBVA's policies forcing us to close accounts (e.g. they didn't support resident non-citizens of any form).
Any banking core system migration that's in the news is a gigantic incident. A testament to the state of IT infrastructure at big banks, and the people they trust with directing the development of these systems. A shitshow.
I have been a simple customer from the beginning also. Probably since 2012. I just did the transition and had no issues so far. I hope that continues. Sorry to hear about all of these experiences.
using good venture-backed services is always a risk, they will either go public or get acquired and become exactly like the garbage we tried to avoid to begin with.
I'm a N26 user I guess one day it will be my turn to have my fancy app taken from me.
I closed my account over a month ago when BBVA revealed the new policy terms. Interest rates were already dropping and were going to get worse. Fees that hadn’t been present were getting added on. Losing the budgeting features meant there was no point in being with BBVA when nearly every other bank has either better fees, interest rates, or both.
I'm planning on closing mine. only reason I kept mine was taxs were just filed and I was just in the start of a job change. there's no way I'd stay with their fee structure
It was my second account. I had one for the household but liked using Simple. They wouldn’t let me open a joint account with my wife (green card holder) so it couldn’t be my primary account. I only had my “allowance” money in there by the time they closed. I’d convinced a lot of friends who were so-so with finances to try it and the budgeting feature helped them a ton. Squandered opportunity by BBVA.
The are (were) the only bank I know of in the US, that does not allow non US citizens to open an account. Even if you had a green card , a SSN , you weren’t able to open an account. I’m happy they are gone.
For anyone looking for an alternative, I'm using Wealthfront Cash now and I highly recommend it. They used to have super great interest rates but are now at about 0.10% APY, which is worse than others (I think you can get up to 0.50% APY right now at other places, with caveats). Although I keep minimal cash so it's not a huge difference. They do track the Fed interest rates pretty well, so I think many of the alternatives are just behind and will eventually have to lower their interest rates too. They have some nice features that Simple used to, like different categories and automatic savings/transfer to investment. The one sticking point is that they don't support cash deposits (perhaps it's possible through their partner Green Dot?), so I use a big bank checking account for that and nothing else.