After One Year, Simple Processing Tops $1B Annually

It’s no secret that Americans have fallen out of love with major banks. But, when it comes to moving on, research had previously shown that many consumers weren’t quite willing to make the first move.

Javelin Research and Strategy reported in March 2012 that 11 percent of consumers were at risk of switching their primary financial institutions over the next year. However, many consumers stayed with their banks through 2012. Despite a bitterness toward many industry practices, data suggested that consumers hadn’t quite taken to any new suitors. 

However, a new blog post from mobile banking provider Simple suggests this narrative may not be true, and that alternative banking providers stand a chance of making significant headway, provided they court the market correctly.

On July 15, the Portland, Oregon-based company celebrated its first year of operations by releasing new information about its influence on the market, and its data suggests its pitch has been working with consumers. Most notable among the announcements was Simple’s statement that it is now processing more than $1 billion annually.

“We were kind of nervous when we launched last year that people wouldn’t get it,” Joshua Reich, founder and chief executive of Simple, told VentureBeat. “The real hope with these features is that we could do something that people have been trying to do, but that’s been difficult to do.”

Simple, formerly known as BankSimple, is unique in that it is not a traditional bank, and does not raises money through fees. Instead, it splits the net interest margin with its partner banks. In its profile of the business, TechCrunch suggested this eliminates Simple’s “incentive to push more confusing products at consumers.“

Some of Simple’s more innovative features include offering users the ability to change the PIN on their account, deposit a check and block certain cards, all from their phone. Simple has also built an extensive free ATM network.

In the post, Simple noted that its Visa cards have been swiped more than 2 million times, that it has upwards of 40,000 customers and that 250,000 people have requested an invite to its service. The company also stated it now has a team of more than 70 employees.

Still, it will remain to be seen whether Simple will be able to keep its disruptive spirit as its user base grows. CFO Sharmir Karkal has been confident about his company’s approach. Speaking to PYMNTS.com, he suggested that it’s companies like Simple that are leading the industry, and that traditional banks might not be able to catch up. 

To read our full interview with Karkal, click here.