The Underserved Unlikely To Embrace New JPMorgan Chase Account, Says Analyst

JP Morgan

SCOTTSDALE, Ariz.–A new checking account JPMorgan Chase has launched aimed at low-income consumers will most likely be embraced by a different segment of consumers, according to one analyst.

JPMorgan Chase has launched a “checkless” checking account that offers access to its mobile app, branches and ATMs for $4.95 a month and no minimum balance. An executive with the bank said the objective is to attract more low-income consumers and those who have traditionally been unbanked, adding the $60 annual cost is well below charges of $200 to $500 annually the target market would face from check-cashers and money order businesses.

But Ron Shevlin, director of research with Cornerstone Advisors, is predicting that one year from launch most of those who sign up for the new account will already be banked, rather than unbanked. “I'll go as far as to say that 90% of the customers Chase gets with this account will already have a checking account,” wrote Shevlin on

Three Non-Cost Factors

“If the unbanked are paying $200 to $500 a year today for cash checking and money order services--and want to reduce that amount--then why wouldn't they open a checking account with one of the many credit unions that still offer a free checking account?” asked Shevlin.

Instead, Shevlin said there are three non-cost factors that have led many of the unbanked to remain unbanked: failure of background checks due to previous banking issues; willingly opting out of the banking system to avoid debt collectors, or because they don't trust financial institutions.

“Chase's new account won't overcome these reasons,” said Shevlin.

Shevlin cited research on the unbanked done by the Kansas City Federal Reserve that found, in addition to having a low income, other reasons people remain unbanked has to do with level of education, employment status; and access to the Internet.

“If Chase really wanted to make a dent in the number of unbanked, it would: 1) pay for people to go to college; 2) give them jobs; and 3) set them up with access to the Internet,” wrote Shevlin.


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Copyright Year: 2019
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