Simple (bank)

Last updated

Simple Finance Technology Corp.
FormerlyBankSimple
Industry Financial services
Founded2009 (2009) in Brooklyn, New York
FoundersShamir Karkal
Alex Payne
Joshua Reich
DefunctMay 8, 2021 (2021-05-08)
Headquarters
Portland, Oregon
Area served
 United States
Key people
  • David Hijirida (CEO)
  • Susan Ehrlich (CFO)
Number of employees
Over 300 (Nov 2015)
Parent Banco Bilbao Vizcaya Argentaria [1]
Website simple.com
Footnotes /references
[2] [3] [4] [5]

Simple (formerly BankSimple) was an American neobank based in Portland, Oregon. It was recognized as the first neobank and operated between 2009 and 2021. [6]

Contents

The company provided FDIC-insured checking accounts to US citizens, but not to Permanent Residents, through a partnership with The Bancorp Bank before transitioning over to BBVA USA in 2016. [2] It was part of the Allpoint network for surcharge-free access to ATMs. [2]

In 2014, Simple became part of Spanish bank Banco Bilbao Vizcaya Argentaria, one of the largest banks in Europe. [1] [7] On May 8, 2021, Simple was closed, and remaining accounts began to be transitioned to BBVA checking and savings accounts. [8]

History

Simple's logo from 2011 to 2016. Simple (bank) Logo, 2011-2016.png
Simple's logo from 2011 to 2016.

What was initially known as BankSimple was founded in 2009 in Brooklyn [9] by CEO Joshua Reich and CFO Shamir Karkal. [3] The initial seed capital was provided by Jerry Neumann. In August 2011, the company raised $10 million from investors led by IA Ventures, Shasta Ventures [10] and Dave McClure's fund 500 Startups. Later that month, the company moved its headquarters to Portland, where five of the company's 17 employees already resided. [10]

The company launched in the summer of 2012 as a limited beta. [3] [11]

By January 2013, the company had 20,000 customers and had processed more than $200 million in transactions. [12] By July 2013, its customers had increased to 40,000 and total transaction values increased to greater than $1 billion. [4] At year's end in 2013, Simple reported processing on average around 13 debit transactions per minute with an overall customer balance of $64 million. [5]

On February 20, 2014, Simple announced it had been acquired by Banco Bilbao Vizcaya Argentaria (BBVA). [1] Paying through its US subsidiary BBVA Compass., [7] BBVA acquired Simple for $117 million or about $1200 per customer. [13] BBVA was also part of the initial venture funding; it originally became interested in Simple in 2011 when a co-founder of Simple criticized the technology of banks and their approach to customer service. [14]

On May 14, 2018, co-founder Reich announced his plans to step down as the company's CEO. [15] [16]

In February 2020, Simple announced that its automated, round up savings feature had saved customers 1.2 million dollars in less than 4 months since the feature was introduced. [17]

On May 8, 2021, Simple was formally closed, and remaining accounts began to be transitioned to BBVA checking and savings accounts. [8]

Business model

In contrast with traditional consumer banks, Simple had no physical branches. [18] Instead, account-holders were issued Visa debit cards and had access to an online banking system accessible through Simple.com or mobile apps for Android or iOS. Simple earned revenue by collecting interest on customer deposits and through the collection of interchange fees. [2]

Features

Controversy

After BBVA acquired Simple, it required non-citizens of the US to open Simple accounts at a BBVA branch rather than online. A federal lawsuit challenging this practice was filed in 2018. Chattopadhyay v. BBVA Compass Bancshares, Inc., 4:19-cv-01541-JST (N.D. Cal.2019).

Related Research Articles

<span class="mw-page-title-main">BBVA USA</span> Former American bank holding company

BBVA USA was a bank headquartered in Birmingham, Alabama. It was a subsidiary of Banco Bilbao Vizcaya Argentaria from 2007 until 2021, when it was acquired by PNC Financial Services. It operated mainly in Alabama, Arizona, California, Colorado, Florida, New Mexico, and Texas. The bank was earlier named Central Bank and Trust Company, Central Bank, Central Bancshares of the South, and Compass Bancshares.

<span class="mw-page-title-main">Mobile banking</span> Service provided by a bank

Mobile banking is a service provided by a bank or other financial institution that allows its customers to conduct financial transactions remotely using a mobile device such as a smartphone or tablet. Unlike the related internet banking it uses software, usually called an app, provided by the financial institution for the purpose. Mobile banking is usually available on a 24-hour basis. Some financial institutions have restrictions on which accounts may be accessed through mobile banking, as well as a limit on the amount that can be transacted. Mobile banking is dependent on the availability of an internet or data connection to the mobile device.

China Banking Corporation, commonly known as Chinabank, is a Filipino bank established in 1920. It was the first privately owned local commercial bank in the Philippines initially catering to the banking needs of Chinese Filipino entrepreneurs. The bank offers a wide range of banking services, including deposits, investments, trust, cash management, remittance, and loans. It also offers insurance brokerage, stock brokerage, and bancassurance services through its subsidiaries and affiliate.

Umpqua Holdings Corporation, d.b.a. Umpqua Bank, is a financial holding company based in downtown Portland, Oregon, United States. Headquarters are in the Umpqua Bank Plaza, formerly the headquarters of Benj. Franklin Savings and Loan. The firm has two principal operating subsidiaries: Umpqua Bank and Umpqua Investments.

A direct bank is a bank that offers its services only via the Internet, mobile app, email, and other electronic means, often including telephone, online chat, and mobile check deposit. A direct bank has no branch network. It may offer access to an independent banking agent network and may also provide access via ATMs, and bank by mail. Direct banks eliminate the costs of maintaining a branch network while offering convenience to customers who prefer digital technology. Direct banks provide some but not all of the services offered by physical banks.

<span class="mw-page-title-main">Zopa</span> British financial services company

Zopa Bank Ltd. is a British online bank which offers deposit accounts, personal loans and credit cards. It began as the world's first peer-to-peer lending company in 2005 and gained a full banking licence in 2020. The peer-to-peer side of its business closed in December 2021.

<span class="mw-page-title-main">UBank</span> Australian bank subsidiary

UBank is an Australian direct bank, that operates as a division of National Australia Bank (NAB). It was established in 2008, and provides savings products and home loans online and over the phone.

Guaranty Bank was a major bank based in Austin, which collapsed in 2009. It was formed in 1988 as part of Temple-Inland and in 2007 became a standalone company. At the time of its collapse, Guaranty was the second largest bank in Texas, with 162 branches across Texas and California, and had $13 billion in assets and held $12 billion in deposits. Major shareholders included billionaire investor Carl Icahn and hotel tycoon Robert Rowling, who jointly invested $600 million in the bank in 2008.

<span class="mw-page-title-main">Banco Bilbao Vizcaya Argentaria</span> Spanish financial services company

Banco Bilbao Vizcaya Argentaria, S.A., better known by its initialism BBVA, is a Spanish multinational financial services company based in Madrid and Bilbao, Spain. It is one of the largest financial institutions in the world, and is present mainly in Spain, Portugal, Mexico, South America, Turkey, Italy and Romania.

<span class="mw-page-title-main">Starling Bank</span> Challenger bank in the United Kingdom

Starling Bank is a British bank, occasionally referred to as a digital challenger bank or neobank, providing current and business bank accounts in the United Kingdom. Starling Bank is a licensed and regulated bank, founded by former Allied Irish Banks COO, Anne Boden, in January 2014. Since its founding, it has received over £500m of funding.

<span class="mw-page-title-main">Monzo</span> British neobank

Monzo Bank Limited is a British online bank based in London, England. Monzo was one of the earliest of a number of new app-based challenger banks in the UK.

<span class="mw-page-title-main">Monese</span> British financial services company

Monese is a British-Estonian company that offers current accounts and money transfer services as an alternative to traditional banks. The mobile-only service provides accounts in Pounds sterling, Euros and Romanian leu, and is available in 31 countries across the European Economic Area. As of January 2020, it has over 2 million customers.

<span class="mw-page-title-main">Neobank</span> Online-only direct bank

A neobank is a type of direct bank that operates exclusively using online banking without traditional physical branch networks that challenge traditional banks.

Xinja is an Australian fintech company and former bank. Xinja was granted a full banking license by the Australian Prudential Regulation Authority in 2019. Xinja Bank was the second Australian neobank to be made an authorised deposit-taking institution. The company exited banking in December 2020 and returned to business in fintech.

Up, also known as Up Money and Up Banking, is an Australian neobank based in Melbourne, Victoria, Australia with more than 700,000 mostly young Australian customers.

Good Money is an American digital online banking platform, often called a neobank, founded by Gunnar Lovelace. Good Money directs 50% of its profits toward environmental and social justice initiatives through impact investments and charitable donations. As a digital platform, Good Money takes no ATM or overdraft fees. The platform's customers vote on where Good Money will invest profits, but their options only include sustainable investments. It is based in San Francisco.

Chime Financial, Inc. is a San Francisco–based financial technology company that partners with regional banks to provide certain fee-free mobile banking services. The company offers early access to paychecks, negative account balances without overdraft fees, high-yield savings accounts, peer-to-peer payments, and an interest-free secured credit card. Chime earns the majority of its revenue from the collection of interchange fees on debit card transactions.

Azlo was an American technology neobank company which provided financial services for small businesses through a mobile app and website. In January 2021, the company announced that it was shutting down, and by the end of March 2021 it had closed all accounts.

Current is a New York City-based financial services and software development company (FinTech). It provides mobile banking services through its partner bank, Choice Financial Group, Member FDIC.

The development of neobanks in Europe is a trend in the European financial landscape beginning in the 2010s. Neobanks are a type of digital-only bank that offer financial services primarily through mobile and web applications, with little or no reliance on physical branches. The trend was driven by advancements in technology, changing consumer preferences, and supportive regulatory frameworks. Neobanks provide a range of services, including personal accounts, loans, and payment services, with a focus on user-friendly interfaces, low fees, and innovative features. In 2022, European neobank market have generated over 570B transactions.

References

  1. 1 2 3 Joshua Reich (February 20, 2014). "The Next Chapter". Simple. Archived from the original on December 8, 2015. Retrieved February 20, 2014.
  2. 1 2 3 4 "Simple: FAQ". Simple. Archived from the original on January 29, 2021.
  3. 1 2 3 Reich, Joshua (July 25, 2012). "The Beginning". Simple. Retrieved August 7, 2013.
  4. 1 2 Reich, Joshua (July 15, 2013). "One Year with Our Customers". Simple. Retrieved August 7, 2013.
  5. 1 2 "Simple / 2013". Simple. Archived from the original on December 30, 2013. Retrieved December 30, 2013.
  6. ↑ "Matt Harris of Bain Capital Ventures on New York's Fintech Evolution, Friendliness to Vendors, and Failures in Regulation". NYC Founder Guide. June 1, 2021.
  7. 1 2 "BBVA acquires digital banking service pioneer Simple". BBVA Compass. Archived from the original (press release) on February 23, 2014. Retrieved February 20, 2014.
  8. 1 2 Kastrenakes, Jacob (May 9, 2021). "Simple bank shutdown goes awry leaving customers without account access". The Verge.
  9. ↑ Jeffries, Adrianne (August 25, 2011). "Brooklyn Not Friendly and Passionate Enough for BankSimple, Start-Up Moves to Portland". betabeat.com. Retrieved July 24, 2014.
  10. 1 2 Rogoway, Mike (August 24, 2011). "Promising NYC startup BankSimple moves HQ to Portland". The Oregonian . Retrieved July 24, 2014.
  11. ↑ Kincaid, Jason (November 11, 2011). "BankSimple is Now Just 'Simple'". TechCrunch. Retrieved February 12, 2013.
  12. ↑ Wortham, Jenna (January 9, 2013). "A Financial Service for People Fed Up With Banks". The New York Times.
  13. ↑ David Wolman (February 26, 2014). "The Bank and the Anti-Bank". The New Yorker. Retrieved January 26, 2015.
  14. ↑ William Alden (February 20, 2014). "BBVA Buys Banking Start-Up Simple for $117 Million". NY Times. Retrieved January 26, 2015.
  15. ↑ Rogoway, Mike. "Simple's founding CEO leaving Portland online banker after nearly a decade". OregonLive.com. The Oregonian. Retrieved May 14, 2018.
  16. ↑ Spencer, Malia. "Simple co-founder and CEO stepping down". BizJournals.com. Portland Business Journal. Retrieved May 14, 2018.
  17. ↑ Green, Rachel. "BBVA USA's digital offshoot Simple surpassed $1.2 million in auto savings". Business Insider. Retrieved February 11, 2020.
  18. ↑ "Can BankSimple Live Up To Its Name?". GigaOm. February 11, 2011.
  19. ↑ Robertson, Adi (May 9, 2012). "Banking substitute Simple releases iPhone app". The Verge. Retrieved February 12, 2013.
  20. ↑ Jeffries, Adrianne (January 15, 2013). "Simple's online-only banking app launches on Android". The Verge. Retrieved February 12, 2013.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.