Points of Cost
- Fraud ($15): Shift to a prepaid model
- Physical distribution ($15): Digital first and only
- Checks ($5): Consumer pays for the convenience
- Statements ($15): Paper statements are costly
- Opening and fulfillment ($10): Digital first
A new product would need to change the paradigm on the the biggest cost drivers. Ultimately it saves about $60 per account per year:
• Fraud ($15)- shift to a prepaid model
• Physical distribution ($15) – digital first, downloadable
• Checks ($5)– still necessary but a consumer will pay for the convenience
• Statements ($15)– Paper statements are costly: why bother?
• Opening and fulfillment costs ($25-$50 amortized over 3 years) – digital first
• Brick and mortar acquisition costs –($ ?) a truly convenient product, sticky payment solutions, social media, and a better UI will reverse the traditional marketing funnel
Additionally, the industry has a platform and a mislabeled, misunderstood product (prepaid) as an opportunity