Continuing to build market momentum with a series of alliances and product launches, Discover has now entered the competitive market for direct banks with the launch of their Cashback Checking account.
From an American Banker article:
Discover is marketing the accounts as “Cashback Checking,” with customers eligible to receive 10 cents back for each online bill payment they make and each check they write, in addition to debit card purchases.
Consumers consistently rank cash back above all other types of rewards and with regulated debit issuers pulling back on adding value to their card programs, Discover is finally leveraging their full service banking capabilities to provide online bank accounts to select customers. Launched on an invitation only basis, the strategy will pull together assets from around the company including Discover Bank, PULSE Network, existing mobile applications, and cashback program management experience.
Checking customers will be able to access their accounts through Discover’s existing mobile app, according to a company spokesman, both to make deposits and pay their bills. The accounts do not carry monthly fees or require a minimum balance, according to the company.
For consumers who value their Discover card, presumably their best users, a checking account with a similar program seems like a natural fit. That may give the strategy an initial boost in the market. However, as all direct banks know, it’s the acquisitions that come afterwards that mean the most.
Discover is entering the market at a time when direct banking products are proliferating, however, this is not a prepaid card program and Discover has an advantage in being able to pull together a wide range of traditional financial services much like Capital One is able to do.
Click here to read more from American Banker.