On Tuesday the San Francisco bank announced a partnership with software provider Column Tax to let account holders prepare and file tax returns through their Varo app.
Michael Flippo - stock.adobe.com
Varo Bank is following in the footsteps of challenger banks to offer free tax filing services for its users.
On Tuesday the San Francisco bank, which started as a neobank before receiving a national charter in July 2020, announced that it was partnering with software provider Column Tax to let account holders prepare and file tax returns through their Varo app.
Software providers such as Column Tax and April work with companies to integrate tax preparation and filing into their apps — sometimes for free — and make the experience smoother by pre-filling fields with customer data. Industry observers also see this as a field that is ripe for participation from financial institutions, which are typically organizations that consumers already trust with their money and that are deeply intertwined with a customer's spending, saving and wealth management decisions.
However, Varo says it is the first chartered bank to offer this.
William Trout, director of securities and investments at Datos Insights, is not aware of other chartered banks doing the same thing.
"They are, however, embracing related services around tax refunds and are likely to look to partnerships to roll out support similar to that offered by Varo," said Trout. "The idea will be to help consumers adopt more sensible withholdings strategies and keep more of their paychecks in their, and the bank's, pockets."
For now, the partnerships typically exist between these embedded "taxtech" providers and fintechs such as MoneyLion and Acorns. Challenger bank Current announced on Tuesday that it too was partnering with Column Tax to offer free embedded tax filing through the Current app. The company said that last year close to half of its users worked at least two jobs; the partnership with Column Tax is meant to make the tax-filing process simpler and less expensive for them.
Gavin Nachbar, co-founder and CEO at Column Tax, said the company has more than doubled the number of partners for the 2024 filing season. April says it has more than 20 partners spanning banking, payroll, savings, lending and other platforms.
As the Senate stands poised to pass a landmark bill establishing rules for stablecoin issuers, a provision allowing state-chartered uninsured banks to operate in states without prior approval is drawing concern from observers and opposition from state regulators.
The Federal Reserve, Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency issued a request for information on a range of payments-related fraud trends in order to develop policy solutions to the rising instances of check fraud.
The CEO of First Northwest Bancorp is promising to fight a lawsuit claiming the lender helped a client perpetrate a Ponzi scheme that bilked a hedge fund out of more than $100 million.
Buy now/pay later provider Sezzle has filed a lawsuit against Shopify, alleging that the e-commerce giant engaged in antitrust practices by making it difficult for merchants to integrate Sezzle's BNPL offering into their websites.
