Steve Streit and his team at Green Dot formally launched the Go Bank Tuesday (see full story here), which utilizes the technical knowhow acquired in the Loopt acquisition to create a very impressive and friendly mobile banking application. Couple the friendly and innovative user interface with a unique monthly fee structure that includes the option (that’s right, the OPTION) to pay anything from nothing to $9 per month, and what we have is a very interesting business model built around a mobile banking product.
There already have been statements that the pricing strategy for Go Bank will make profits difficult, and that Green Dot will be forced to alter the cost to include a low fixed monthly fee. It is more likely the Green Dot team has done its homework, looked at its own prepaid portfolio, and determined that the income derived from transaction fees and card customization will drive profitability even without a monthly fee. As a public company, time will quickly identify who is right.
Several traditional banks have created interesting solutions that are close to Go Bank, including USAA and ING Direct, but the closest competitor is likely Simple, which is also built for mobile usage from the ground up and includes budgeting tools, bill pay and P2P payments as integral aspects of its offering. What they all lack is a cute dog mascot!