Wells Fargo on Tuesday touted a novel checkless account that waives a lower monthly service fee for younger customers and omits overdraft fees, saying it would benefit U.S. consumers who need help managing their spending or are new to banking.
The account operates like a traditional checking account, but account holders aren’t issued paper checks and they cannot be used with the account.
The Clear Access Banking account “demonstrates our commitment to provide a simplified banking experience,” said Ed Kadletz, head of Wells Fargo’s deposit products group for consumer and small business banking.
The account incurs a flat $5 monthly service fee, which will be axed for primary account owners between the ages of 13 and 24, and does not charge overdraft or non-sufficient funds fees. For comparison, the service fee for the company’s Everyday Checking account is $10, and overdraft or returned-item fees run customers $35 per occurrence.
The new account’s features also include standard alerts for things like a low account balance or upcoming payments due, online services such as bill pay and mobile banking and access to the money transfer platform Zelle.
“Our customers are seeking clear, easy to use, low-cost bank accounts for day-to-day money management,” Kadletz said. “This simplicity is as important as ever to customers in the wake of the pandemic and recent economic challenges.”
While American consumers are still shifting more spending toward essentials such as groceries, as new cases of COVID-19 have begun to stabilize, especially during the last week of August, “The recovery in discretionary spending has started to resume,” according to a Friday survey by McKinsey & Company.
The country’s third-largest bank by assets said it’s rolling out the new account ahead of schedule — the original target date being early next year — in an attempt to better serve customers, as Wells Fargo, which shook up its risk management structure last month upon the departure of Chief Compliance Officer Mike Roemer, rebuilds its reputation in the wake of scandals.
In February, the San Francisco-based bank agreed to pay a $3 billion fine to the U.S. government after millions of fake accounts were created for non-consenting clients, a major scandal that led the U.S. Federal Reserve to impose a $1.95 trillion asset cap on Wells Fargo in 2018.
And last month, Sens. Elizabeth Warren (D-Mass.) and Brian Schatz (D-Hawaii), members of the U.S. Senate’s banking committee, formally questioned Wells Fargo regarding reports of borrowers being put into mortgage forbearance programs without their permission under the Coronavirus Aid, Relief and Economic Security Act.
“As a company, we’re moving with urgency to remove complexity and create a better experience for our customers,” Kadletz said. “These updates are supporting Wells Fargo’s larger transformation and focus on earning trust and building lifelong relationships with our customers.”
Users of the new lower-fee account will also receive a contactless debit card and ability to make purchases through a digital wallet. That’s a potentially enticing proposition, as nearly half of coronavirus-wary consumers in the U.S. and a half-dozen other regions indicated in a Visa survey early last month that they wouldn’t shop somewhere that didn’t provide a contactless payment option.
The new offering is also a good option for customers who can’t open a standard account because of their credit or banking history, Wells Fargo said.