Digital-First Banking

Wealthfront FinTech Rolls Out Debit Account Capability

Wealthfront, the online investment service firm, has added checking features to its app.

The Palo Alto, California startup said the no-fee account is the company’s latest move to build a next-generation banking service that is branchless, automated and optimizes every dollar.

“Our clients are anxious for Wealthfront to become their primary financial relationship, and offering checking features puts us in that position,” said Wealthfront’s co-founder and CEO Andy Rachleff in a statement.

With the Wealthfront mobile app, customers with direct deposit can get paid up to two days early, as well as set up direct deposit for other payments like a tax refund or company expenses.

Monthly bills such as rent, mortgage, or utilities can be set up for automatic payment to be paid from the Wealthfront Cash Account, and clients can transfer money with apps like Cash App, Venmo, PayPal and other apps.

A debit card can now be added to the Wealthfront Cash Account to make purchases and get cash from a nationwide network of fee-free ATMs.

The demand to move to digital financial services has been greatly accelerated by recent events like nationwide shelter-in-place orders due to Covid-19.

In an interview with PYMNTS earlier this month, Mzukisi Rusi, head of technology delivery in North America at Entersekt, said the stage has already been set for the shift to digital.

“Even in pre-pandemic times, some of the key initiatives from financial institutions were focused on improving the customer experience, while at the same time focusing on fraud prevention,” he said.

Dan Carroll, co-founder and chief strategy officer of Wealthfront, said the retail branch model used by traditional financial institutions is broken, and the recent shelter-in-place orders exacerbated the existential threat banks face.

Wealthfront is not alone in the diversified financial services sector: New York-based Betterment, Acorns headquartered in Irvine, California and Personal Capital in the Redwood City, California compete with Wealthfront in the financial application software industry, according to Owler.com, which conducts research on companies in real time.

On Monday (June 29), a PYMNTS report, How a Global Pandemic Created a Digital-First Customer in 12 Weeks, revealed it took just three months for consumers to make the leap to the great digital divide.

In April, Wealthfront announced its new cash accounts have collected $1 billion in customer deposits since the company launched the offering in February. The accounts give customers a higher-than-average, 2.24 percent interest rate. To celebrate, the company said it raised the interest rates to 2.29 percent.

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NEW PYMNTS STUDY: LEVERAGING THE DIGITAL BANKING SHIFT – SEPTEMBER 2020  

The September 2020 Leveraging The Digital Banking Shift Study, PYMNTS examines consumers’ growing use of online and mobile tools to open and manage accounts as well as the factors that are paramount in building and maintaining trust in the current economic environment. The report is based on a survey of nearly 2,200 account-holding U.S. consumers.

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