Simple adds faster payments, P2P as rival fintechs encroach

Financial crisis-era rebel Simple is turning to payments innovation — along with its traditional combativeness on fees and rates — to stay relevant against the many fintechs lurking at the edges of the banking world.

The Portland-based "neobank" plans to use P2P as a springboard for innovation, and to build out real-time account funding, faster payments and push payments, along with higher annual percentage yields for savings accounts and social saving and payment "goals."

A large part the strategy will be punching up a payments menu to address the expectations of a target demographic that’s accustomed to social-driven apps such as PayPal's Venmo and other digital financial services challengers like Monzo.

Dickson Chu will help lead the charge as Simple’s executive chairman and interim CEO, having assumed the role when Simple co-founder and CEO Josh Reich departed the company earlier this year. Chu has also worked with Simple as head of portfolio management for BBVA, which acquired Simple in 2014. Chu’s career in financial services includes roles at Wells Fargo, PayPal and Citigroup, where he worked on several new initiatives.

Simple will also work on faster payment processing, push payments and connections to Visa Direct and Mastercard Send. Other features include real-time account funding and changes to Simple’s core account to encourage greater savings.

“Most if not all of our customers have account relationships somewhere else,” Chu said. “We want them to be able to move money back and forth.”

Simple is also developing instant provisioning for cards and mobile wallets such as Apple Pay, Google Pay and Samsung Pay.

Simple is offering a new 2.02 percent APY on all current and new “savings goals” with a balance of $2,000 or more, a higher rate than the national average of less than 0.1 percent.These accounts will back P2P and the other payment innovations at Simple.

Simple has its own P2P service, called Instant, and it plans to make it easier to move funds to other accounts outside Simple. These features join Simple Express, another product that helps consumers save and plan for recurring costs such as bills, groceries or rents. Simple's concept of “goals,” or protected accounts within accounts, are dedicated to specific things such as a vacation.

Simple has its roots in the financial crisis of 2008, when it formed to sell financial services to younger consumers who were turned off by the traditional banking system, or felt bank fees were too high or complex.

Much like Monzo, another bank alternative, Simple has faced technology challenges such as customer lockouts and other usage glitches. It also faces non-bank competitors, such as Square and PayPal, which both tie financial services to their core payment apps. PayPal also owns Venmo, the social P2P service which targets the same demographic as Simple.

Simple hopes its higher APYs, plus the social tools tied to group transactions and the “goal” accounts, will help it move beyond those challenges.

The goals have a social element, as groups can contribute toward the goals or use the P2P app to transfer funds into the goals. The higher APYs and payment enhancements will also be connected to the goals, Chu said.

“That makes sense for our audience, which is focused around millennials, who are very mobile-forward and willing to adopt new capabilities…We think of ourselves as a tech company that happens to deliver banking services,” Chu said.