NorthOne has eliminated all non-sufficient funds and overdraft fees for its customers, the small business banking app said Tuesday (June 29).
“Fees like NSF and overdraft began a long time ago as a deterrent and cost recovery mechanism, but have since become an entire industry and profit center for many traditional banks,” Eytan Bensoussan, CEO and co-founder of NorthOne, said in a news release. “That’s not right. And this can be especially painful for many small businesses. We’re excited to eliminate NSF and overdraft fees for NorthOne customers and make our pricing even more transparent and simple.”
“NorthOne is a financial technology provider, not a bank. Banking services are provided by the FDIC-backed Bancorp Bank,” the release stated.
NorthOne noted that small businesses can lose a costly percentage of their revenues to these fees, while large corporations might never notice. American banks took $11 billion in overdraft fees from businesses and consumers in 2019. Even after federal regulators moved to encourage banks to waive these fees, the average penalty still hit $33.47, a record high.
That isn’t to say financial institutions (FIs) are letting overdraft fees run amok. 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 begun exploring options that offer a free grace period to customers for making their accounts whole when they overdraft.
Under NorthOne’s new arrangement, customers will pay a $10 monthly fee for their account and $15 every time they send or receive domestic wire payments. If a business owner using NorthOne tries to withdraw more than they have in their account, they’ll simply find their transactions rejected.
“We believe that NorthOne should succeed when our customers succeed, not when they stumble,” said Bensoussan.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More