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Arkaid Kuhlman, the founder of the Internet bank ING Directhas gone mobile with his startup, ZenBanx, and he plans to exclude cashdeposits entirely, according to AmericanBanker.
But in an intriguing move,ZenBanx’s model includes no physical cash transactions. While the startup plansto add mobile deposit capture for checks, it has no cash deposit venues on theagenda. “In a digital world, cash is obsolete,” Kuhlmann said.”Payments can be made with your debit card; cash can be withdrawn withyour debit card.”
It is interesting that in one breath, Kuhlman says that cashis obsolete, but in the next reassures potential ZenBanx users that they willbe able to withdraw cash. Cash is not obsolete, and it facilitates quick,low-risk, one-time transactions with instantaneous settlement for both thepurchaser and the merchant.
While the Banker reports that Kuhlman plans to focus onpeople who have strong international ties, it will be interesting to seewhether it can maintain its no-cash deposit policy and still be attractive topotential customers. Among his target audience are students, who often workjobs like waiting tables where cash can form a big part of their compensation.Cash deposits are not impossible. Consider Green Dot Corp.’s GoBank, whichallows for instant cash deposits at Walmart stores. Granted the marketdemographics appear to be different, but having the flexibility to put cashinto an account as well as take it out remains an important feature for manycustomers.
Overview by Ben Jackson, Director, Prepaid Advisory Service for Mercator Advisory Group
Read full story in American Banker