In 1999, we published a report entitled Virtual Checking Accounts: On the Web it's the plastic that matters (OBR 50/51, July 27, 1999). Our hypothesis was that web-based access, electronic transfers, and a Visa or MasterCard were really the primary transaction tools going forward.
It has happened as fast as we thought it might. Two early proponents of this strategy, WingspanBank and Juniper, really never got off the ground, though Juniper did create an impressive credit card portfolio that was recently sold to Barclays.
Fast-forward to six years, HigherOne is working with 13 college campuses to offer its OneAccount, combing college ID, MasterCard debit, financial aid depository, electronic funding, and of course, website access.
Analysis
It's a trend worth watching. As today's teens and twenty-somethings move through their inevitable financial growth, they are going to think less about the bricks-and-mortar of THEIR BANK, and more about the website and plastic.
-- JB
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