Days after Live Oak Bancshares warned some customers that they would be unable to use their debit cards for up to nine days, the company said Thursday that there will be no disruption in access.
A spokesperson for the Wilmington, North Carolina-based parent company of Live Oak Bank confirmed that replacement debit cards are due to arrive in customers' mailboxes ahead of a planned
The digital bank had earlier notified about 1,000 of its business customers that their existing debit cards would be unusable for up to nine days starting on July 16, and that replacement cards would be shipped out on July 21, with an approximate arrival date of July 23-24.
The lengthy disruption time was the "worst-case scenario," Mark Moroz, Live Oak's chief banking officer, told American Banker on Wednesday, a day before the company confirmed that new cards will be mailed next week.
Moroz said regulatory requirements forced the bank to inform customers early about potential outcomes and that the bank had to wait until pre-conversion testing had been completed to update customers about the new debit-card arrival timeline.
"We have to prepare for things that go bump in the night," Moroz said about the initial timeline. Given the possible disruption, "we're making sure our customers have that white-glove service all the way through this process, even though the communications don't always show that."
The $13.6 billion-asset bank, which is one of the leading lenders of
Finxact, which was based in Jacksonville, Florida, was
Read about core conversions here: https://www.americanbanker.com/tag/core-conversions
Live Oak's upcoming conversion will impact customers with business checking accounts and those that use treasury management services, Moroz said. Less than 5% of the bank's customer base will be shifted to the new platform, and of that group, less than 1% faced the possibility of a debit-card disruption, he added. Live Oak
The payments fintech is partnering with credit unions such as Michigan State Federal Credit Union to offer cash-back rewards on debit transactions using account-to-account payment schemes.
Previously, the branchless, tech-forward bank limited its deposit products to business savings and consumer savings accounts, with higher rates offered on the business accounts.
As part of the upcoming conversion, Live Oak halted the processing of new debit card orders. The halt took effect on June 20 and will remain in place until July 21, according to the bank's notification to customers.
The company also provided a heads-up to customers about other banking services that will be impacted during the conversion. For example, online banking will be unavailable for a weekend, starting at 5:00 p.m. Eastern on July 18, and returning by 8:00 a.m. Eastern on July 21, according to the bank's website.
Customers will need to order new checks, due to the fact that Live Oak's routing number is changing, the company said. However, checks that include the prior routing number will continue to be honored for up to six months after the upcoming systems upgrade, according to the bank.
To help ease any burdens that its customers may feel during the switch, the bank is waiving monthly account service fees in July.
In addition to debit cards, business customers will continue to have access to other payment methods during the transition, Moroz said. The combined number of debit card transactions per month among the affected customers is about 9,000, he said in the Wednesday interview.
"I am fully confident that we're doing the right thing for our customers," he said.
