The Breakdown

Explaining Southern California's economy

It's a bank! It's an app! It's a bank AND an app!

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53580 full

A show of hands, please: Who hates their bank? 

OK, OK! You can put your hands down now. In response to your pain over fees and account minimums and various other picky little money-grubbing charges, Green Dot, a Pasadena-based company that made it big in prepaid debit cards, has created a no-frills, low-cost banking service that's optimized to run on mobile devices.

It's called GoBank, and it's designed to run on the iPhone and Android devices. In fact, the entire banking experiencing is centralized on small screens and makes use of a smartphone's camera to manage deposits. You can email money to people. And text money. And — yes — Facebook money. 

You also get, along with FDIC insurance, a Visa debit card and an embedded "Fortune Teller" that will tweak you when you're spending too much.

Green Dot says it takes a matter of minutes to set up an account, and the fee is on a  voluntary sliding scale. The most it asks customers to pay is $9.  The debit card will set you back nine bucks, no sliding scale.

Green Dot — which staged a big IPO in 2010, valuing the company at $2 billion (it declined substantially since then, as it ran into increased competition) — can pull this off because it bought a small bank in Utah a few years ago and then picked up Loopt, an app developer, last year. 

GoBank is the lovechild of those acquisitions, as well as Green Dot's play to move out of its established market — people lacking traditional bank accounts who purchase prepaid debit cards at places like Walmart — and into...well, you'd have to call it the future of banking.

You could easily call GoBank "lean" banking, to borrow a term from the manufacturing world. There are plenty of folks who dislike the deal that traditional banks offer and, ultimately, need very little in the way of financial services. The ability to move money, avail themselves of direct deposit, write virtual "checks," and above all avoid paying fees is what matters to them. As society becomes increasingly cashless, they don't really even need the "massive" ATM network that GoBank touts.

The app is in beta now, but I signed up immediately to give it a try and will be doing so as soon as they authorize me. Frankly, I've been eagerly awaiting something like GoBank since I heard about M-Pesa, the extremely successful mobile payments system that's used by millions of Africans to handle basic financial needs. There are other players in this space, notably Simple.

But there's something about GoBank that has that look of developing world innovation about it. It's "good enough" to handle the basic banking needs of...well, just about everybody. This is what your bank will be in the future: it will fit in the palm of your hand. 

Oh wait, the future is here! Stay tuned...

Follow Matthew DeBord and the DeBord Report on Twitter. And ask Matt questions at Quora.

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