Column: Bank in Beta

After the tents of Occupy Wall Street have been packed, the drum circles silenced and the signs of fury discarded, there is at least one thing that will carry on the movement’s legacy: a new crop of startups that are looking to capitalize on consumer anger against banks.

One such company is Simple, whose name was recently reduced from BankSimple; a good thing too, seeing as the finance company isn’t really a bank (nor is it really that simple, but more on this later).

Simple is waging a war against commercial banks by improving upon existing standards of technology, design and customer-friendliness that are, well, a bit lacking industry-wide. The company doesn’t charge any fees (not even for overdrafting or paying late), and runs exclusively on the web, with not a single teller or brick-and-mortar branch in sight.

To be clear, this isn’t a column about finance (that’s what my colleague Danny Brawer does on Tuesdays). This is a column about the virtual vs. the real.

The classic example of virtual triumph is Amazon, who offered consumers a large selection, built a reputation for excellent customer service and watched as their following amassed. Slowly but surely, they poached customers from brick-and-mortar shops, trumping independent booksellers and big box stores alike.

What Amazon did for retail is what Simple can do for banking.

Simple has shown signs of promise that it, too, could reinvent an industry online. The Portland-based company is creating just the kind of new-age product that 20- or 30-something young professionals won’t be able to resist.

Here’s how it works: Simple issues its customers a Visa debit card. Since Simple has no ATM network of their own, cash can be withdrawn at any ATM and the company will refund all incurred fees.

Depositing cash, on the other hand, is where the company deviates from its claim to simplicity. You can deposit your money at one of Simple’s “partner banks”, but will have to deliver special instructions to the teller in order to do so. You could also take the cash to a bank, turn it into a money order, then deposit it through Simple’s mobile app. It’s likely you’ll be charged either by the depositing bank or the agency providing the money order.

In actuality, Simple doesn’t deal with your money — its partner banks do. Simple just provides the technological infrastructure to manage your money, requiring you to own a camera-enabled smartphone to access it. This focus on technology is precisely why it will appeal to the young and the tech savvy.

Simple requires you to manage your personal finances through the mobile app that lies at the core of its services. The application allows its users to view a map of where they’ve purchased items and exactly how much money they spent there. It can even calculate a daily “Safe-to-Spend” number for you that takes into account what you earn, what you spend and what you need to save. Other features include an advanced search function wherein you can sort transaction history by time (lunch dates), type (coffee) or size ($20 and up).

It is Web 2.0’s answer to banking. On top of it all, the beautifully designed, minimalist user interface might make you (dare I say) like doing banking on your phone.

But the real question is, will it catch on with the banking population at large?

Since Simple will only accept smartphone owners, it restricts its membership to a fairly nichey crowd and excludes people who could really use the service but don’t spend a lot of time checking Twitter on their iPhones, like busy heads of households.

The service is still in Beta, and interested parties can request an invite at simple.com (epic domain grab, right?).

If Simple does what it sets out to do, it will change how people manage their personal finances — but it may for only a select few.

If you’re glad Congressperson Lamar Smith said NOPA to SOPA, let NICOLE NGUYEN know at niknguyen@ucdavis.edu.