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Citi intros checkless checking account

With more people banking via ATM, online and mobile channels, fewer customers are demanding paper checks, Citi found.

September 25, 2014

Responding to consumers' waning use of personal checks, Citibank this week launched a checkless banking account with low or avoidable monthly charges and no overdraft fees.

"We designed the account with two trends in mind," Will Howle, Citi head of U.S. retail banking said in a news release. "Many customers, particularly those active with our online or mobile banking options, no longer have a need for paper checks. At the same time, we know many customers are also looking for the reassurance that will come with an account that eliminates overdraft fees."

In August, Citi surveyed a nationally representative sample of U.S. consumers (not limited to Citibank customers) and found that:

• the percentage of consumers who use online and mobile banking channels to pay monthly bills (38 percent) is now higher than the percentage that use paper checks (32 percent);
• more than half (53 percent) of consumers avoid writing paper checks whenever they can; 12 percent do not own a checkbook at all. Of those with an annual income less than $30,000, 21 percent do not own a checkbook. Of consumers younger than 40, more than 20 percent do not own a checkbook;
• only 9 percent of consumers use checks to pay for large purchases and only 4 percent use them for smaller purchases. If faced with choosing a single method of payment, only 6 percent would choose paper checks; and
• of those surveyed, 25 percent say the ability to overdraw their account and be charged a fee for doing so could get them in financial trouble. For those with incomes of less than $30,000 this rises to 31 percent, and for those under age 30 it is 37 percent.

"The Access Account provides a debit card, easy ATM and Citibank branch access and a powerful digital platform, while addressing needs of some customers, particularly first-time and younger consumers, by reducing the risks of overdrawn accounts and coinciding fees," said Bob Annibale, global director of Citi community development.