The Breakdown | Explaining Southern California's economy

Enough with debit card fees! Give us a...Google Bank?

A month ago, I blogged about how Wells Fargo was preparing to increase debit card fees. We had asked for opinions via KPCC's Facebook page and gotten back…a reaction that was almost uniformly unhappy about Wells Fargo's move. 

Now Bank of America has followed suit. The consensus among observers of the banking business is that the practice is now here to say, after more than a decade of banks discounting their services or getting rid of fees altogether. I'm one of those people who's never paid a fee to use a debit card. And I use it for nearly every purchase I make.

But I don't bank with BofA, or Wells Fargo. I belong to credit union. Back in August, when we asked Facebook nation what it thought about Wells Fargo, the credit union option was repeatedly suggested. This time around, when I tweeted out my old post and made the credit union point, I received pretty positive feedback.

Mind you, I'm not against people banking with major institutions — I banked with Chase for more than a decade. There are obvious advantages: more ATMs, more extensive customer service, better technology for online banking. But I definitely think that the Brave New Age of higher bank fees may compel customers to evaluate what they're getting from their bank — and more importantly, what their bank is taking from them.

It's possible that we should grudgingly welcome all the new fees that big banks will soon be slapping on everyone. They're a sign that the banks' more, shall we say...adventurous? lines of business, from subprime mortgages to credit card swipe fees, are being dialed back by new regulations. Banks are returning to being…banks, with a simple suite of services. But they have to make money somehow. And so they're going to do it the old fashioned way, on the backs of depositors. 

However, this is invariably going to collide with learned behavior. In the good old days, most people were aware of how much their checking account was costing them each month. Since ATM cards morphed into debit cards, people have stopped writing checks, stopped using ATMs as much, and stopped paying for stuff with cash. I mean, I've used my debit card to buy a pack of gum. And I haven't felt the least bit guilty about it.

Debit cards have made transactions much more fluid. It's also easy to track spending, online. When was the last time you worried about balancing your checkbook? When was the last time you even heard a person use those words in a sentence?

Adding a cost, even a small one, to basic banking could open up a competitive opportunity. In fact, it already has. Google Wallet wants to consolidate transactions, manage everything through a mobile platform, and effectively knock down the last domino between actual and virtual cash: those little hunks of plastic that you carry around in your pocket. Plastic that, in the case of a BofA debit card, could cost you $60 a year, for nothing more than the privilege of spending the money that your bank is using to make more money, through loans and investments.

Google Wallet is set up to use only Citi credit cards. Citi could wind up charging a fee for this, following Wells Fargo and BofA. But you can also use a virtual prepaid Google Card.

Wait! A Google Card?

Yes, folks, Google is in the process of becoming a bank. Hey, it's already got a trading floor. It should be easy to move into easily automated realm of retail banking. In fact, Google might be able to make enough in this notoriously low-margin business to, you know...never charge fees for anything.

Don't be evil, indeed.

Follow Matthew DeBord and the DeBord Report on Twitter.

Photo: Kevork Djansezian/Getty Images