Big Banks Backing Off Debit Card Fees, Citing Consumer Backlash

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Following eight months of consumer testing, J.P. Morgan Chase [JPM] has decided that it won’t charge customers who use their debit cards to make purchases… J.P. Morgan joins U.S. Bancorp [USB], Citigroup Inc. [C], PNC Financial Services Group Inc. [PNC], KeyCorp [KEY] and other large banks that have said in recent days that they won’t impose monthly fees on debit cards.

It is a positive sign that banks are beginning to realize that single-minded pursuit of short-term profits is not the way to sustained success. Robin Sidel writes:

Big banks say they determined debit-card fees would cost them as well. “Our customers said that would be a massive source of irritation for them,” said Stephen Troutner, Citigroup’s head of consumer and small business banking. “Any time you hear that kind of emphatic feedback from customers, you’ve got to listen to them”…

Many banks will likely increase charges in other areas to make up the lost revenue but some banks said they will focus on winning over more customers and convincing them to sign up for more financial products…

Todd Barnhart, head of retail products at Pittsburgh-based PNC, said “I generally think customers don’t want to be nickled and dimed.”

A long road to go

Still, big banks have a long way to travel before they will be delighting their customers. The average Net Promoter Score (NPS) for a national bank with branches is –minus 6 percent, compared to the most liked bank, USAA, which has an NPS score of plus 88 percent. USAA has reached those heights by years and years of focusing on what customers want and delivering that.

The banks are still thinking: “Introducing charges will hurt our bottom line. So we had better not do it.” They still see their goal as making money for shareholders. They haven’t yet crossed the Rubicon of 21st Century management and realized that their actual bottom line is delighting their customers.


Read the full article at Forbes.com…


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Consumers now paying ‘per-swipe’ fee on debit card purchases

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man with empty wallet


First they charge up to $5.00 per transaction at the ATM machine..
. Now we can look forward to both monthly charges AND per swipe fees for the privilege of using a bank debit card while shopping.

It’s time to start carrying cash again, consumers.

Read the infuriating article in the New York Times


SHORTCHANGED: States Charging Unemployed Fees To Collect Benefits

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WASHINGTON — Many states shortchange the jobless by distributing unemployment benefits on debit cards loaded with obnoxious fees, according to a new study by the National Consumer Law Center.

Of the 40 states that have switched from paper checks to prepaid debit cards, 22 states’ cards charge ATM fees, 24 charge balance inquiry fees, and 28 charge inactivity fees. The cards in Arkansas, Idaho, Nebraska, Ohio, and Oregon come with overdraft fees ranging from $10 to $20.

And in Connecticut, Iowa, Rhode Island, and Tennessee, cardholders “must pay for every ATM inquiry or pay a denied transaction fee if they request cash when their balance is insufficient,” the study says.

 

Tennessee stands out for having the card with the most “junk fees,” the study says. Tennessee’s card, provided by JPMorgan Chase, charges $1 for initial ATM withdrawals, 40 cents for balance inquiries, and 25 cents whenever someone swipes the card at checkout. It’s one of just four states that doesn’t provide even one free ATM withdrawal per deposit.

Read the full article in the Huffington Post…