Banking Startup Simple Acquired for $117M, Will Continue to Operate Separately

ING was absolutely remarkable. Less so after being acquired.

And Simple is by far the best banking experience I've had. The interface is so well done, the customer service has been phenomenal. I actually find myself on my banking tab nearly every day (happily), adjusting goals and making sure I'm on target.

I still use mint to manage all my accounts and consistently wish the interface was even half as good as Simple's. Mint is another example that stopped being incredible after being acquired - or at least stopped progressing in any useful manner.

I just wish they offered Two-Factor authentication for "360" accounts.

Relevant link: https://www.facebook.com/CapitalOne360/posts/101515573342295...

My experience with one of the banks you mentioned has not changed since it's been acquired.

Every bank I've had the ability to talk to an actual person was able to see that this is clearly absurd, I am not a serial check bouncer/overdrafter/etc and to get my account going. Simple..notsomuch. I'd love to use them if they'd let me.

That seems like a lot of money for a mobile banking app. They didn't actually hold deposits themselves or make loans, the activities that are worth money in banking. They were sort of a VPS for banks--a "bank" sitting on top of real banks that made some painful things easier. Hard to profit that way though.

I'd wager that the founders wanted their FU-money to eventually pursue something new.

The savings goals are certainly nice, but I can get that with most other banks (just don't have the online management component), otherwise they don't offer a whole lot beyond "pretty".

I put a lot more weight into the convenience of drive-through cash deposits a couple blocks from my house. Or spending an hour at the branch and walking out with a loan. Or a rewards card that applies 5X points to my mortgage for purchases I was going to make anyways.

I wouldn't say I'm a "fan" of Wells Fargo. Or that they're particularly "amazing" for any of this. And their iOS app kinda sucks to be honest. Functional but meh.

That said, they set a minimum expectation for their offering that Simple doesn't meet and no amount of pretty Apps or direct-to-live-human (I mean how often do I call my bank? I couple times a year?) service is going to make up for.

The biggest one for me though is Joint Accounts. I mean seriously. It's weird to me as a married guy that my wife and I should maintain multiple separate bank accounts. That alone makes the offering fairly useless for me. If I were single and didn't have a mortgage, I could see how I might have different priorities.

The only reason I'm still a member at this point is that closing an account, needing to hook up a new external account (we changed primary banks during my membership at Simple so the external account I opened with is no longer the one I need to transfer funds back to for closing) is cumbersome.

Sure, it would be awesome to rebuild a bank from scratch, but that doesn't mean there wasn't innovation here.

What lets them down is the overall power of their offering and the rate at which they have been developing it. If the banking backend was the constraint, maybe this will help them to accelerate.

What is a bit sadder is that they weren't able to stick it out until they started building their own platform.

  > Simply (no pun intended) building a layer on top of the existing banking infrastructure...

I now use a local credit union and I get far, far better service than I ever did with BoA. The credit union has a branch 3 blocks from my apartment, across the street from where I work, and on campus at school. Plus they have ATMs in many of the local businesses I visit. Simple just can't compete with that, so for me, it's all upside.

Banks have survived hundreds of years, through hardships like depression and war, long after their founders were all gone.

Now the business model is "shop around for a buyer if your growth isn't high enough in the first five years."

Kind of sad.

It's likely nearly impossible to build a bank from scratch because of regulatory hurdles. That's why Simple had to team up with a partner bank instead of going it 100% alone. I remember reading a blog post from Simple about it, it seemed they had no choice to partner with an existing bank (if I find the post I'll share it). The banking system is broken on purpose. This is why banks operate like it's the stone age and get away with awful service and fees - there's little chance of nimbler competitors coming along and eating their lunch.

But with this news that they're being acquired, I now have even less hope than before. I love Simple, but I'm now wondering if I'm going to have to find a different company to give my business.

I transferred a few hundred bucks to Simple when I signed up and finally moved that money back out just last week. I'm done waiting. :(

Why not have one account for each of you? Simple has instant account-to-account internal transfers.

Basically I want Simple but with a richer transaction history. It doesn't have to be as cumbersome as a full double-entry account system, but it needs to have roughly a similar level of account history.

I've used all three of those methods and they've all worked just fine for me.

The biggest issue I've had is the inability to write a check, which doesn't come up often but often enough I have to have a separate bank account for that.

Now even though I've live in the UK since 2011, I opened a Simple account and it's been a breath of fresh air. The transfer to and from my other accounts is far simpler than any of my other US accounts. Also, I can receive wire transfers for free (imagine that, receive money for free!? The Wells Fargo founder must be spinning in his grave at the sound of that). Contrast this with the old experience of calling up a bank and saying I want to transfer money to another account and they tell me I have to call the other bank, because ACH is a "pull" system.

Sorry to get off on a rant, but Simple is the best of the best in my opinion as a customer having dealt with at least 10 different banks over the last 20 years in both the US and UK.

...

>The acquiring company, BBVA, is a 150-year old financial services corporation

I think that was the problem.

I predict they kill it within 6 months, either overtly or by halting all development.

Not really. I looks pretty much the same to me as when they started and it certainly looks the same as when they were bought, five years ago.

I'd be very interested in knowing how many product and engineering people still work on it. (if any…)

I myself never experienced downtime and they've only gotten more reliable, better customer service, and more features.

There are some interesting feature gaps in what they let you do on the site, that occasionally mean you might have to send them a physical letter or fax (!), but on the whole I'm pretty content with the functionality there as well.

As mentioned, the customer service is stellar. I have never had to be on hold much more than a few minutes and the person on the other end has always been engaged and knowledgeable, all the while remaining totally professional. I think this image of them was cemented for me when I found that their hold "music" was that Friday's jobs report!

The website is not great on the usability front and some things are placed in questionable locations. The search functionality is also frustrating and obtuse many times. The same is true of the mobile app. However, they are functionally more than sufficient and work perfectly fine. And, worst case, you can always just call them or do the online chat.

I think they are on the more expensive side as a brokerage, but their integration there is satisfactory (that being said, I am not an active investor)

They also don't nickel and dime you on things. I was amazed when I found out that other banks charge for getting extra checks and a checkbook. Admittedly, checks are in less and less use these days, but you still need them sometimes. Schwab offers unlimited checks for free. Spare debit cards may be charged, but I am not sure. I have not lost my debit card (yet!)

The bank side is located in Reno, NV, so any checks have to be mailed there. However, this isn't entirely true. Schwab does have physical locations to serve their brokerage clients and since the Checking account requires a brokerage account (although it doesn't require it to be funded), you can still use their physical locations to deposit and withdraw money, and then move it around online or on the app.

The con you listed isn't exactly accurate. You don't need an IRA, or direct deposit.

In opening a bank account, they automatically open a brokerage account, in doing so there is no minimum balance in either account. No direct deposits required, no IRA, no requirement to even use their brokerage accounts.

Real cons I've found: 1. You have to actually mail in a form to set up electronic transfers to other bank accounts (either your own or someone else's). After learning about square cash I no longer find this to be an issue. 2. You can't do international wire transfers directly from the bank account. You can however transfer the money to your brokerage account and do the wire transfer from there. 3. If you initiate an ACH pull from another bank account you have they place a 3 day hold on the money. Annoying but can be avoided if you can use an ACH push from the other bank.

And the pros: 1. They do refund all ATM fees, including foreign ATM fees. This was extremely useful when I was in Japan which is cash only and where I was getting hit with $15 ATM fees. 2. They also absorb the fee Visa imposes on foreign transactions (both currency conversion fees, an the Visa cross-border fee of approximately 1%). 3. Unlimited free checks, free return envelopes for sending in things you have to mail them. 4. Customer service so good I always put down the phone smiling and elated. I've never been transferred to another person when dealing with them!

All in all I highly recommend them unless you need to make cash deposits, or need to make international wire transfers frequently.

I'd be better off just playing the market at that point (or using something like betterment/wealthfront to hold most money).

Simple is nice because the interface/app are solid and they have incredible customer service. The only other thing I'd want from them is a decent rewards credit card.

I'm sure CapitalOne has "budget tools" marked off of some internal checklist but imagine it's pretty crappy.

Giving up a few bucks a month in exchange for a great budgeting tool is the reason I use Simple.

https://home.capitalone360.com/rates https://www.simple.com/policies/rates/

I would use it, but I can't because I have a working US visa and they only let you make an account if you're a US citizen.

The way I see it, someone has looked at their online/mobile banking, and said "what can we do better here? what are other people in the industry doing?" and seen the way Simple operates, and the general satisfaction of their customers.

It'll be interesting to see what happens from here