Saylent Technologies Announces “Checking 2.0” to Bring Fairness to Consumers and Financial Institutions

New Overdraft and Reward Checking Accounts Help Consumers and Bankers Work Together



FRANKLIN, Mass.--(BUSINESS WIRE)--Saylent Technologies, Inc., a pioneering provider of payment intelligence software, today announced “Checking 2.0,” a new way for financial institutions and consumers to work together towards a common goal.



“Consumers are purchasing a service from financial institutions, and that service has a delivery cost. The total cost, however, is based on how the consumer banks”



“The marketplace is marred with distrust between consumers and financial institutions. We saw a need for a solution that creates a win-win for consumers and financial institutions alike, since the reality is one cannot prosper without the other,” said Tyson Nargassans, president of Saylent Technologies.



Checking 2.0 is grounded in respect and fairness between the consumer and the financial institution. Utilizing its Account360™ solution, Saylent developed two new Checking 2.0 accounts: Overdraft Forgiveness Checking and Reward Checking 2.0.



Recent regulatory changes highlighted the practice of overdraft fees. While overdraft’s original design was well-intended and saved the consumer the embarrassment of a bounced check, it has led to the “$40 latte,” where an everyday purchase triggers an overdraft fee. Saylent’s Overdraft Forgiveness Checking allows consumers to overdraw their accounts one time per statement, for any reason, and the bank will waive the fee. As an incentive not to overdraw their account, these consumers can also earn interest and cash rewards for managing their money well and banking electronically.



The reduction in overdraft fees also creates a sizeable revenue shift for financial institutions. Its impact will be felt on free checking accounts, which have been largely subsidized by overdraft fees. Reward Checking 2.0 seeks to balance service fees, free checking and rewards checking. It charges a modest fee to the consumer to service the account, but provides opportunities to waive those fees and then earn interest and cash-back.



“Consumers are purchasing a service from financial institutions, and that service has a delivery cost. The total cost, however, is based on how the consumer banks,” Nargassans explains. “Reward Checking 2.0 is the new ‘free’ checking account for the post-recession world. It recognizes this cost, but it provides a way for the consumer to waive those fees as well as a way to make their money work harder for them. Consumers get world-class service and an opportunity to earn more. And financial institutions promote banking activities that help them operate more efficiently. That’s the win-win the market needs.”



Account360 is integrated with the financial institution’s core platform and provides real-time, automated adjustments to accounts based on their banking activity. Customers of Jack Henry & Associates’ Silverlake® and CIF 20/20® solutions have access to these solutions through the pre-integrated, hosted BIG Rewards product.  

About Saylent Technologies, Inc.

Saylent Technologies, based in Franklin, Mass., develops payment intelligence solutions to help financial institutions attract and retain accounts. Employing innovative analytics and segmentation techniques, Saylent’s Card360 solution identifies card usage patterns by cardholder, targets underperforming or at-risk segments and enables corresponding marketing programs and metrics. Saylent’s Account360 solution provides a holistic perspective on customers across all payment types, enabling financial institutions to understand and reward profitable behaviors. For more information, please visit www.saylent.com or call (508) 570-2161.



About Jack Henry & Associates, Inc.

Jack Henry & Associates, Inc. (Nasdaq: JKHY) is a leading provider of computer systems and ATM/debit card/ACH transaction processing services primarily for financial services organizations. Its technology solutions serve more than 11,300 customers nationwide, and are marketed and supported through three primary brands. Jack Henry Banking™ supports banks ranging from de novo to mid-tier institutions with information processing solutions. Symitar™ is the leading provider of information processing solutions for credit unions of all sizes. ProfitStars^® provides highly specialized products and services that enable financial institutions of every asset size and charter, and diverse corporate entities to mitigate and control risks, optimize revenue and growth opportunities, and contain costs. Additional information is available at www.jackhenry.com.

New Overdraft Rules for Debit and ATM Cards

New Federal Reserve rules give debit and ATM card users additional options regarding overdrafts. In the coming months, banks, credit unions, and other financial institutions must offer you the ability to make decisions about overdraft services for transactions made with your debit or ATM cards.



Expect your bank to send you an explanation of its overdraft services; here is an example (38 KB PDF). Here are some key things you need to consider when reading the notice:

The basic facts

Types of overdraft services. An overdraft occurs when you make a purchase or ATM transaction but don't have enough money in your account to pay for it. For a fee, your bank's overdraft services will cover you when you become overdrawn. This fee can apply to each time you overdraw your account.

Generally, there are two types of overdraft services:

• Standard overdraft services. Your bank will cover your transaction for a flat fee of about $20-30 each time you overdraw your account. For example, if you make a purchase with your debit card for $150 but only have $100 in your account, your account will be overdrawn by $50 and your bank will charge you a fee. If you then make an ATM withdrawal for $50, your account will be overdrawn by $100 and you will be charged another fee. In this example, if the fee your bank charges for overdraft services is $30, you will pay a total of $60 in fees.


• Overdraft protection plans. Your bank may offer a line of credit or a link to your savings account to cover transactions when you overdraw your account. Banks typically charge a fee each time you overdraw your account, but overdraft protection plans may be less expensive than standard overdraft services.

The new rules

• You choose. In the past, some banks automatically enrolled you in their standard overdraft services for all types of transactions when you opened an account. Under the new rules, your bank must first get your permission to apply these services to everyday debit card and ATM transactions before you can be charged overdraft fees. To grant this permission, you will need to respond to the notice and opt in (agree).


• Existing accounts. If you do not opt in (agree), beginning August 15, 2010, your bank's standard overdraft services won't apply to your everyday debit card and ATM transactions. These transactions typically will be declined when you don't have enough money in your account, but you will not be charged overdraft fees.


• New accounts. If you open a new account on or after July 1, 2010, your bank cannot charge you overdraft fees for everyday debit card and ATM transactions unless you opt in. If you open a new account before July 1, 2010, your bank will treat you as an existing account holder: you will receive a notice about your bank's overdraft services and will have to decide if you want them for everyday debit card and ATM transactions.


• Flexibility. Whatever your decision, the new overdraft rules give you flexibility. If you opt in, you can cancel at any time. If you do not opt in, you can do so later.


• Checks and automatic bill payments. The new rules do not cover checks or automatic bill payments that you may have set up for paying bills such as your mortgage, rent, or utilities. Your bank may still automatically enroll you in their standard overdraft services for these types of transactions. If you do not want your bank's standard overdraft services in these instances, talk to your bank; you may or may not have the option to cancel.

• everyday debit card transactions
  
  purchases made with your debit card on a day-to-day basis (excludes all checks and automatic bill payments)


• overdraft
  
  an overdraft occurs when you write a check, make an ATM transaction, use your debit card to make a purchase, or make an automatic bill payment or other electronic payment for an amount greater than the balance in your checking account


• opt in
  
  giving your bank permission to include you in a particular service


• opt out
  
  declining a particular service offered by your bank

• Bank Accounts and Services


• Credit Cards


• Identity Theft


• Leasing


• Mortgages


• Personal Finance


• Federal Agency Contacts

• New Credit Card Rules

.

Use PIN Debit to Buy Gas and Save Big!!!

Editors Note: The following may sound crazy, but it's happening more and more every day, especially with rising gas prices. If you use your debit card to make a gas purchase, DO NOT pay at the pump! Pay INSIDE and use your PIN number.

Otherwise...the higher price of gas has resulted in both account freezes and a windfall of overdraft charges for banks.

Consider the following scenario: You have $100.00 in your checking account. Early one morning on the way to work, you make a $25 dollar gas purchase with your debit card and pay at the pump. You have $75.00 left. However, unbeknownst to you, the gas station implements a $75 dollar hold on your checking account.

Now it's lunchtime and you buy lunch at McDonalds ($5.00). You have $70.00 left right? On the way home, you decide to buy a pack of smokes ($5.00), you have $65.00 left in your checking account, right? You pull in the driveway and the wife sends you out for Milk and Bread ($5.00) You have $60.00 left in your account right? WRONG!!!

Reality Check: The $75.00 hold triggers a $35.00 overdrawn checking (debit) account fee on the $5.00 McDonald's purchase. Same result with the pack of smokes. Ditto on the $5.00 Milk/Bread purchase. You now have $105.00 in overdraft fees. When the $75.00 hold is lifted early the next morning, the three $35.00 overdrawn fees (or $105.00) are applied to your account, but you only have $65.00 so you're left with a negative balance -$-45.00 instead of +$60.00.

End result? The $25.00 gas purchase cost you $130.00.

Want to avoid this scenario? Pay the attendant inside with your debit card and enter your PIN number. PIN based transactions involve no hold because the amount is deducted immediately. This can save you BIG headaches.

Here's an article from The Charlotte Observer regarding this subject:

‘Freezes' by service stations above what's paid for gas can unpleasantly surprise people with low balances.

Some drivers paying for gas with a debit card are experiencing a different kind of pain at the pump. Gas stations concerned about collecting on automated debit-card transactions are freezing large amounts of money in consumers' checking accounts, causing financial headaches for some drivers who carry low balances.

In the past, when gas cost $2.00 per gallon, when a consumer swipes a card at a gas pump, most gas stations froze $1 as a confirmation that a valid checking account exists. That hold usually lasted for a few hours, but can stretch for a couple of days. The station later debits the actual amount of the gas purchased from the account. But as gas prices soar to record heights this week and fill-ups reach into triple digits, some stations in the Charlotte area and around the country are freezing much higher amounts, some local bankers say. Some of the consumer complaints have centered on Shell and Exxon stations, which are usually independently owned, though the practice could include other local stations. The consumer protection division of the N.C. Attorney General's Office has received more complaints this year about the practice, said spokeswoman Jennifer Canada.

The office doesn't keep statistics on the specific complaint, but “as gas prices rise, gas stations tend to do this more,” she said. For instance, one consumer reported to the Observer that she purchased $25 of gas using her debit card at the Shell station on Gold Hill Road in Fort Mill, S.C. But she had $90 frozen in her checking account for several hours, along with the $25 for the purchase.

The manager of the station did not immediately return a message. And several other managers reached at various gas stations said they didn't know what amounts were being held or how it was determined. Despite the big-time names, most gas stations that sell Shell, Exxon and other brand names are independently owned.

Hotels have been placing extra holds on debit and credit cards for years in case customers run up extra expenses before checking out, such as for telephone calls, mini-bar items or other services.

But it has been happening at stations because some fear banks won't cover increasingly large gas purchases if the money ends up not being in a consumer's checking account, said Red Gillen, an analyst with Celent, a Boston-based financial services research firm. “Because there's a time lag between pumping and paying, there's a lot of money at risk. You're going to see more and more gas stations doing this,” he said. The hold policies can cause financial headaches for consumers in several ways, said Nathan Tothrow, director of marketing for Charlotte Metro Credit Union: A debit-card transaction might be rejected even though drivers have enough money in their accounts for the gas they want to purchase. “They have enough money for the gas, but not for the hold,” he said.

The holds can tie up cash that can't be used for at least a few hours. Unsuspecting consumers can have other transactions incur an overdraft fee since there's a danger that the holds can stay on for longer than a few hours, which can result in other transactions causing an account to be overdrawn, triggering fees. Tothrow said the credit union has received complaints about excessive holds. The bank investigated and found several gas stations were freezing $75 and $90. “For a lot of folks, a $90 unexpected hold can cause a problem,” he said. “I really don't like that they are doing it to our members.”

The way to avoid holds is to use the debit card with a gas station attendant and enter your PIN number because there are no holds involved and the account is charged immediately for the exact amount, the N.C. Attorney General's Office says.

Most gas stations and merchants send in charges as one bundle at the end of the day, after most holds have fallen away, Tothrow said. But some stations have started sending in the charge for pumping gas quicker, even before the hold has worn off. That can put double financial pressure on a checking account, at least for a few hours.

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