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Soon You Can Open a PayPal Bank Account

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PayPal bank accoount, anyone? Coming soon: An official PayPal bank account.

Although PayPal used to require that you already have a bank account or card with another financial institution, that won’t be necessary with new offerings debuting this summer.

The company will be going from only offering payment products to having actual deposit-holding accounts backed by the Federal Deposit Insurance Corp. and are specifically intended for people who don’t already have bank accounts.

The Unbanked

PayPal’s market for these products include the 30 million Americans don’t yet have bank accounts — and potentially more than a billion outside of the country don’t either.

The fees that these people have to pay for access to alternative financial services accounts for 9.5% of their income, according to Bill Ready, executive vice president and chief operating officer of PayPal.

Apparently, the company intends to undercut the fees that this target market is paying to so-called non-bank providers of banking services.

Testing New Services

PayPal is already testing these offerings are already with a limited number of consumers, according to PayPal spokespeople.

Meanwhile, PayPal already offers at least half a dozen different banking-related products — online money transfers, a digital line of credit, and four different Mastercards spanning credit with rewards, debit and prepaid value.

You may have received marketing offers for the different credit and debit products if you already use PayPal for money transfers — but they’re distinct from the plans to offer bank accounts to those who lack them.

PayPal Bank Account, Anyone?

Although the company’s assortment of payment products has already made it a pretty close competitor to a bank — in fact, people with PayPal merchant accounts could effectively use them like checking accounts — now the company is officially going there.

The company plans to offer prepaid cards connected to the deposit accounts intended for those who are currently unbanked.

If you’re confused about the difference between all of these products — let alone the future PayPal bank account — here’s a breakdown of how each of them functions and what they cost.

  • Money Transfers: PayPal got started in online payments, which have no fee if you’re the buyer or you’re sending money to friends and family. Otherwise, sellers and people who generate invoices on the site pay fees of 2.9% of the value of the transaction plus 30 cents apiece for domestic transactions. Internationally, it goes up to 4.4% plus a fixed fee based on the currency in question.
  • PayPal Here Card Reader: This account for merchants competes with the Square card reader and charges a fee of 2.7% when a buyer swipes a card or 3.5% plus 15 cents for manually entered transactions.
  • PayPal Credit: This digital line of credit actually doesn’t require a plastic card; purchases of $99 or more have no interest if you repay it in its entirety within six months — take longer to pay and late fees apply.
  • PayPal Cashback Mastercard: Earn 2% back on all transactions, a rate that comes in a bit higher than what other rewards cards tend to offer — and they’re redeemable toward your balance at any time, without any minimums required. The card has no annual fees, but interest applies once you start carrying a balance.
  • PayPal Extras Mastercard: Earn three points per $1 spent on gas and restaurants, two points per $1 spent on PayPal and eBay one point per $1 spent on all other purchases; the points are redeemable for gift cards, travel vouchers, or cash back.
  • PayPal Cash Mastercard: This connects a debit card to your PayPal balance, allows you to set up direct deposit for free and withdraw cash from ATMs, with no annual account fees nor minimum balances required.
  • PayPal Business Debit Mastercard: The business version of the PayPal Cash MasterCard, it combines the debit card features described above with the ability to earn 1% back on all purchases.
  • PayPal Prepaid Mastercard: This connects a prepaid card to your PayPal balance so that you can load more money onto the card at select locations; plus you can opt into a tiered-rate savings account with up to a 5% annual yield depending on how much of a balance you carry.

Outbanking the Banks</h2

In many cases, PayPal offers better pricing on banking products than you might get from more traditional financial institutions.

PayPal accounts can also serve as a platform for people who need to set up dedicated business or merchant accounts without having to pay typical merchant fees.

Although the company has lots of products and plans to offer some new ones, one thing that isn’t entering the mix involves paper: PayPal doesn’t sound like it’s going to enable check writing on the new bank accounts.

But it might not need to. The company already has over 227 million accounts around the world and seems likely to keep growing beyond that.

Readers, which features do you require in a bank provider? And what kinds of PayPal features do you make use of — and which ones are you considering adopting? Would you want to open an official PayPal bank account.

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Mango Money Review

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mango money review

Mango Money is a prepaid credit card and money managing software designed to be affordable. With an attractive 6% Annual Percentage Yield (APY), another draw to this savings account is that it does not require a credit check. But, is it actually worth looking into? We decided to evaluate the company and develop a Mango Money review to find out.

In recent years, prepaid cards are growing in popularity. According to survey results from independent research group GFK, 60% of consumers had a branded prepaid payment card in 2014. Although the satisfaction rate of prepaid cards was at roughly 70% at the time of the survey, users need to be aware of potentially higher bank fees. Mango Money’s prepaid card does come with the usual ATM fees as well as a monthly service fee, but there is actually so much more to MM than its card. Let’s break it down.

The Mango Money Review

Hopefully, by the end of our findings, you will have determined if this savings route is for you.

How does Mango Money work?

The Mango Visa Prepaid Card is not a credit card, which is why it does not require a credit check. It also does not have an activation fee. According to the website, there are no hidden costs or interest charges. Not to mention, the card can be used anywhere that Visa debit is accepted. Plus, once you have activated your card, you can start utilizing the 6% APY savings account. To qualify for the 6%, though, you need a net direct deposit of $800 or more each month and a minimum balance of just $1 by the end of the month.

What type of services do they offer?

One of the goals of Mango Money seems to be helping customers improve their finances. In order to accomplish this, they offer a variety of features. In addition to their prepaid card and savings account, you can sign up for their text messaging alert system, which sends you a message every time you use your card or money is deducted. It’s a great way to track how much you spend, but buyer beware; text messaging rates may apply with your phone carrier.

Mango also provides an app for both the iPhone and Android that allows you to view your account, reset your pin or transfer funds any time while on the go.

Another great feature is the fact that there are different funding options as well. You can choose to do a direct deposit into your Mango account or bank transfers even from PayPal.

Lastly, MM tries to make themselves accessible to their customers. If there is something you cannot find through the FAQ on their website, you can reach out to them through phone or email. They boast of spending more time and money on their customers instead of on traditional advertising dollars such as television or print ads.

What are the cons?

Mango Money has some great features, but there are a few downfalls. For instance, even though it doesn’t require a credit check, it also does not help you improve your current credit score. And when you o a cash deposit, there are limitations on how much you can deposit. Moreover, there is a limit to how much you can withdraw at the ATM along with how much can be on your card. It’s actually been noted in previous reviews that getting your money out is harder than putting it in. You need to use the card to access your money rather than transferring the money out through ACH.

It’s also important to know that there is a threshold with the 6% interest rate. Because Mango wants to give individuals the tools they need to create better savings habits, they feel after reaching $5,000 the right habits are established. This is why they drop the APY to 0.10% for those with more than $5,000 in the account. Likewise, for any account not meeting the $800 minimum net direct deposit, they drop the APY to 2%.

What else are people saying?

Even though the 6% interest rate is much higher than the typical 1% rate promised by most savings accounts, the fact that the money is not easily accessible is an issue for many. The needing $800 (a $300 increase, which began September 2016) is also restricting to some. Some reviewers feel as though they are being forced to jump through hoops to maintain the 6% rate, where that time could be better spent elsewhere.

Reviews of the company and their services were mostly positive.

Conclusion:

Mango Money is not for everyone. If you are someone who does not use a credit card often, doesn’t need regular access to your savings funds or is looking to build your emergency savings in general, Mango may be a great option for you. Even if you feel you are unable to meet the $800 minimum, it could be worth keeping or trying for the 2% APY they still offer, which is very competitive.

Did you find this Mango Money review helpful? Have you tried their services before? Weigh in on the comments below or start a discussion on our Forums page.