Financial institutions now may offer their customers immediate access to funds via mobile or prepaid cards under a new initiative called GenNOW Fidelity National Information Systems (FIS) is offering its clients.
FIS is promoting the product as a means to help banks and credit unions attract and retain younger customers, many of whom increasingly are pursuing alternative providers of financial services.
“One in four U.S. households conducts at least some financial transactions outside of the mainstream banking system,” Bruce Lowthers, FIS executive vice president for North American Card Solutions, said in the product announcement. “When you consider those numbers, and the long-term opportunities available to banks and credit unions who reach out to the customers GenNOW focuses on, this is a key driver of consumer engagement, growth and future business.”
When financial institutions support GenNOW Financial Services, their customers also can track their spending and manage their finances.
Other perks include the ability to load funds into their prepaid card accounts and make expedited bill payments to avoid late payment charges through a mobile app, track spending and balances with personal financial management tools and alerts, get rewards for use and meeting budget and savings goals, and receive instant notifications of offers reflective of their buying habits and interests.
In an email, an FIS spokesperson tells PYMNTS.com that it has one initial client is offering the service in launch. He said consumers will pay nothing to receive a card, but there will be an undisclosed fee structure to loading and operating it.
In a YouTube video touting the program, FIS notes that Gen Y consumers, or those ages 18 to 34, represent 30 percent of the U.S. population, and by 2025 they will be earning half of all U.S. personal income. Banks will need those consumers, though representatives in that age group don’t do much actual banking because they have apps for that, a speaker representing the Gen Y consumer notes in the video.
“Of course managing separate accounts with different apps isn’t all that convenient,” she says. “But at least I don’t have to wait to use my money.”
As an added perk, the speaker says that in addition to being able to deposit a check with a smartphone, it would be nice to be able to access the funds now instead of having to wait for the check funds to clear. She then goes on to suggest that’s what a GenNOW account would provide, along with spending alerts, budget-management capabilities, direct merchant deals and retail discounts, along with anytime access to financial professionals, all from one app.
“This could be the start of an actual banking relationship,” she says.
An FIS representative depicted in the video describes GenNOW as a low-risk, revenue sharing turnkey solution. “We provide all the support you need to get it to market fast and extend your brand,” he says.
The FIS spokesperson said in the email the company will take its fees from consumer-generated revenue in the revenue-sharing agreements with financial institutions.