NorthOne SME banking app ends overdraft fees
NorthOne has eliminated all insufficient funds and overdraft fees for its clients, the small business banking app announced on Tuesday (June 29th).
âCharges like NSFs and overdrafts started a long time ago as a deterrent and cost recovery mechanism, but have since grown into a separate industry and profit center for many traditional banks,â said Eytan Bensoussan, CEO and co-founder of NorthOne, in a statement. Release. âIt’s not fair. And it can be particularly painful for many small businesses. We’re excited to eliminate non-payment and overdraft fees for NorthOne customers and make our pricing even more transparent and straightforward. .
“NorthOne is a financial technology provider, not a bank. Banking services are provided by the FDIC-backed Bancorp Bank,” the statement said.
NorthOne noted that small businesses can lose an expensive percentage of their income because of these fees, while large businesses may never notice. U.S. banks levied $ 11 billion in overdraft fees from businesses and consumers in 2019. Even after federal regulators decided to encourage banks to waive these fees, the average penalty was still $ 33.47 , a record.
That’s not to say that financial institutions (FIs) let overdraft fees run wild. As PYMNTS reported earlier this month, Reg E now requires consumers to apply overdraft protection for debit card, ATM and check transactions. Other banks have limited the number of overdrafts allowed in a day and have started exploring options that provide a free grace period for customers to reset their accounts when they are overdrawn.
Under NorthOne’s new arrangement, customers will pay a monthly fee of $ 10 for their account and $ 15 each time they send or receive domestic electronic payments. If a business owner using NorthOne tries to withdraw more than what they have in their account, they will simply have their transactions rejected.
âWe believe NorthOne should be successful when our customers are successful, not when they stumble,â said Bensoussan.