Interview: The fee structure of an eccount
Due to complicated fees and a lot of fine print, banking can quickly get expensive with many highstreet banks. One of the reasons why eccounts have caught on with the general public is that they are based on a strikingly simple cost structure and don’t require a degree in rocket science to understand. We caught up with Will Thomas of eccount money to find out more behind their fee strategy.
Tell me a bit about the general approach behind an eccount, please.
eccount money believe in treating all customers fairly, that’s why we guarantee to accept any applicant that can prove their identity and UK address sufficiently. We don’t make any credit checks, so customers with a previous history of bad credit, including, for example, bankruptcy, CCJ or Debt management, can still open an eccount money current account.
In which way does the fee structure of an eccount differ from a regular bank account?
We don‘t provide overdrafts or charge for unpaid and bounced payments. So if you find yourself without sufficient funds to pay a bill or make a payment, we simply won’t send the payment. This means that you can manage your money easily, knowing that we’ll charge you £12.50 per month with no unexpected charges.
It’s an in-built debt-protection-mechanism, as it were.
Precisely. Some highstreet banks have been known to charge £30 for straying into unarranged overdrafts, and these charges can quickly rack up. The eccount management tools available help customers manage their money easily, by preventing overspending and promote budgeting.
What can users expect to pay?
This depends on how customers use the eccount and VISA card. We have found that the previous approach to banking by many UK banks – one size fits all – does not work for many individuals. Although the bank accounts are promoted as FREE, they are riddled with charges such as overdraft fees, interest rates, late payment fees etc. Our approach is to charge a set monthly fee of £12.50 which covers the general running of the eccount and card.
What about usage fees?
We do also charge some usage fees such as a 50 pence ATM withdrawal fee. But whilst this is seen as a charge for withdrawing money, it simply covers the cost of the customer using a 3rd party’s ATM. Many UK banks have started preventing their customers from using cash machines of other banks and only allow cash withdrawals at their own cash machines. We believe that customers should be able to withdraw cash from any ATM location as access to certain machines owned by specific institutions can be prohibitive.
In short, customers will pay £12.50 per month plus any ATM fees. Point of Sale transactions in shops, restaurants or online are FREE, so even if customers make 10 ATM withdrawals per month and send 5 standing orders or one off payments the total cost is only £17.50. Whereas at another bank the customer could pay £30 each time a standing order or payment is refused/bounced.
What can customers do to actively reduce the costs of using an eccount and reap its full benefits?
We recommend that customers follow these simple rules when managing their money:
Plan – make sure you know how much money you have coming in (wages, benefits etc) and know how much you have going out of your eccount (bills, rent/mortgage, shopping etc)
Adapt – if you find that one month you are spending more than is coming in, try to change your habits. It could be that you are spending too much on luxuries or other non-essential items. If this is the case we recommend that you try to change your spending behaviour. Remember you don’t need to load all of your spare cash onto your card, you can move money between your eccount and card account at any time.
Ask – If you are having problems managing your money or need some advice on how to set up any of the eccount’s features, simply call our UK based customer care team and they’ll be more than happy to help you.
You seem to place a lot of emphasis on working with customers on a grass root level.
We simply believe that encouraging and helping customers to manage their money effectively should be part of any bank’s portfolio. And it pays off: Although there is a monthly fee payable, the eccount really is a cost effective alternative for consumers who want to gain greater control and a better understanding of their finances.