BBVA Compass' Small Business Mobile App Takes on Square

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BBVA Compass has designed a Business Mobility Bundle designed to give the smallest of businesses, which it calls "micro businesses," a set of features it hopes will appeal: online and mobile banking with a free tablet, no monthly fee, remote check deposit, and a card reader.

The bank views micro businesses as an underserved market segment. "When you consider almost 95% of small businesses in our country have annual revenue of less than $500,000, and about two-thirds of them are meeting their business checking account needs through their personal accounts, it screams out that there's a product gap causing them to default to their personal account," says Lonnie Hayes, small business segment director at BBVA Compass.

Research told the bank that very small business owners often find business banking apps irrelevant. "They're looking for an account that's basic and built around lower-volume needs," Hayes says. "That was a gap we saw in the market and in our product set."

BBVA Compass's existing business account came with either a monthly fee or a minimum balance.

"The very small or micro business is extremely sensitive to fees and cost," Hayes observes.

The new offering has no monthly fee, but charges for certain services. "We're letting business owners choose different behaviors to control costs," Hayes says.

During the two-month product launch, the bank is giving each customer who signs up a Samsung Galaxy 3 tablet.

Online and mobile banking are important to this segment. "The number one thing these owners tell us is they don't have time to go to grocery, let alone the branch," he says. "Anything we can do that will allow them to extend the hours of banking available to them is attractive. Online banking does that." Because many micro business owners are on the road a lot, being able to do banking tasks on a mobile device is important.

The account comes with mobile remote deposit capture for smartphones and tablets, a critical feature for small business owners who end up taking daily deposits down to the branch in person. It also comes with a mobile card reader (offered in partnership with Payware) for accepting MasterCard and Visa payments.

Hayes sees the card reader as BBVA Compass' way of competing directly with Square. An advantage for BBVA is that its reader comes pre-integrated with the customer's checking account and online banking tools.

The bank has tried to give its small business app a similar look and feel to its consumer app. "Micro businesses and even small and medium sized businesses aren't asking you just to help them manage their business, they're asking you to help manage their lives," Hayes says. "We have to make the experience seamless between the consumer banking app and the small business app."

The account has no monthly service charge and no monthly balance requirement, but costs to the bank are also low. Transactions are limited to 50 items or less a month, with up to five in-branch withdrawals or processed checks.

BBVA Compass hopes the new account will lead to stronger relationships with small business owners and larger wallet share.

For the second phase of this product offering, the bank is building a resource center for its online banking business customers. In the future, it plans to blend consumer and business banking features for very small business owners.

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