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Mobile-centric bank debuts

By Claes Bell, CFA · Bankrate.com
Tuesday, January 29, 2013
Posted: 11 am ET

Mobile banking still has a ways to go to match the popularity of online banking. But if you love banking on your smartphone, there's a new option out there -- an all-mobile checking account.

Green Dot announced this month that it will introduce a bank with checking accounts designed to be managed primarily via mobile devices, dubbed GoBank. While GoBank account holders will have access to the nationwide MoneyPass network of ATMs to withdraw money, the bank won't have physical branches at all.

Instead, most essential banking business, including deposits, check writing and person-to-person payments will be conducted via apps for smartphones and tablets. In fact, the check-writing function seems to borrow a little from ING's online checking accounts. Customers will write checks electronically, which the bank will then print out and mail to their intended recipients.

Another novel feature is the checking account's monthly maintenance fee. At least for the time being, instead of setting a specific bank fee, customers will be to name their own price, paying whatever they think the account is worth.

For a certain type of tech-loving bank customer, I can see GoBank being a good deal. There are no overdraft fees, and the bank's mobile-centric approach is being hailed by some as a glimpse of the banking industry's future.

But it's also important for consumers to avoid being sucked in by hype. Lots of online checking providers have been providing sophisticated mobile banking functionality for a while now. There's nothing beyond the "name your own price" monthly bank fee here that's truly new, and it's very possible to find free online checking accounts that will provide all the features that GoBank is offering. In fact, some online checking accounts pay you a substantial yield, rather than asking for a monthly contribution.

So while GoBank is the new kid on the block, consumers should compare bank fees and account features to determine where to take their checking business.

What do you think? Would you go for mobile-centric banking?

Follow me on Twitter: @ClaesBell.

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