Instead, banks have altered their attention to existing products that protect users from overdraft fees.
In the case of JPMorgan, that product is Secure Banking, which has no minimum balance requirement and costs $4.95 a month. The service has about 1.4 million users, most of whom have direct deposit and will automatically start receiving early payments, MacDonald said.
The bank, which serves more than 66 million U.S. households overall, can be a “fast follower” of fintech rivals when they create must-have features, MacDonald said. Start-ups including Chime and Current have popularized early direct deposits as they’ve gained millions of cost-conscious users.
“The fintechs are doing a good job of entering the space and trying to disrupt by offering services,” MacDonald said. “Customers didn’t even think about early access to payment before some of these players came in. As we evaluated it, we think that there’s a real need for certain customers to have this.”
The bank is working on introducing other solutions for this group, including small loans or installment products, to help users to smooth out their financial needs when emergencies arise, he said.
