This Week in Payments: AmEx Launches a Checking Account, Consumer Financial Health Worsens and Everyone Ponders the Post-COVID Future

The launch of an American Express all-digital checking account, a dip in the quality of consumers’ financial health and the changes at Peloton were in the news this week.

So were the bigger trends they illustrate: the maturing of challenger banks, the need for customer assistance delivered both digitally and by humans, and the future of post-COVID retail.

NCR President Doug Brown joined PYMNTS to discuss This Week in Payments.

Topping the agenda was American Express launching its first all-digital consumer checking account, available to eligible consumer card members in the U.S.

Read more: AmEx Launches First All-Digital Checking Account

Brown noted that although American Express has Bluebird, this new offering has a different value proposition, being tied to the higher-net-worth accounts and being a loyalty play that gives rewards on spending.

“I think it’s got an interesting segment attraction, if you will, because it is targeted right at a card user of AmEx, which has a different profile than your average consumer,” Brown said. “So, I think it’s going to be an interesting niche play.”

Challenger Banks Show an Intent to Stay

There’s also been continued activity among two classes of challenger banks: those with a banking license and the neobanks that have a bank in the background.

See: As SoFi and a Handful of Challenger Banks Grow Up, Traditional Lenders Should Be Nervous

Brown said the SoFi model signals a more deliberate intent to stay, while the neobanks with the “rent-a-bank” infrastructure behind them are still looking for the model to pan out.

He said of the neobanks, “I think they’re still trying to figure out monetization value of the relationship, but they haven’t quite cracked the code.”

Consumer Financial Health Takes a Turn for the Worse

Consumer financial health was in the news, too, this week as PYMNTS released a report that found that the percentage of consumers living paycheck to paycheck is on the rise, after having trended down earlier in the pandemic when stimulus payments were being distributed.

Learn more: PYMNTS Intelligence: 61% of the US Population Living Paycheck to Paycheck

Brown said his takeaway from the research was that there’s always a need for financial wellness coaching and advising. He noted that it shows that there are members of all income demographics who are living paycheck to paycheck.

“I think it’s incumbent on providers, if you want to be in it for the long term, these relationships, no matter how you’re assembling them, you’ve got to come back to help advise, guide and inform these customers — because they need it,” Brown said.

Read more: US Household Debt Increased $333B in Q4 of 2021

Winning institutions are making a deliberate push to “humanize digital,” he added, by deploying technology that offers people digital conversational assistance and allows them to connect to human assistance when needed.

With such resources, these institutions are helping customers understand credit score impact, overall positioning and planning for milestones in life.

“That’s what seems to be resonating for the winning institutions,” Brown said.

Rumors of Potential Acquisition Surround Peloton

Peloton was in the news again this week with a changing of the guard at the CEO position and rumors that there may be an acquisition in the wings.

See: Amazon, Apple, Google, Nike — Even UnitedHealthcare — Have Good Reasons to Buy Peloton

Brown noted that Peloton has awareness of the user’s wellness, and there are several players that could capitalize on that.

“Peloton’s business model, of course, is in need of an infusion,” Brown added, “so some event needs to happen for them — whether it’s Nike, Amazon, Apple, it makes logical sense.”

The Post-COVID Future Will Be Digital-First

As COVID seems to be in the rear-view mirror, many are wondering what the reopening will bring and how people will use gyms, offices and stores.

Read more: CVS Sees $3B Tech Investment as COVID-19 Vaccine and Testing Set to Plunge

Brown said the data shows a return to spend and activity. He added that he believes there will continue to be a hybrid model in which people use both physical locations and digital platforms, whether it be the gym, the bank or the grocery store.

“We describe that as the ‘digital-first’ phenomenon, which means not digital only, but digital everywhere,” Brown said.

Closing out the discussion of the week’s news, Brown said developments in crypto always catch his eye, noting NCR’s acquisition of LibertyX.

Also read: NCR Closes Purchase of Crypto Service LibertyX

“Things that are happening on the crypto landscape always catch my attention, and there’s increasing intensity, there’s more and more demand every day about how this is going to manifest itself,” Brown said. “So, there’s never-ending conversations about how to go about it, what does it mean and what does it mean on the consumer side.”