The payments landscape has been changing for a number of years now as people move away from cash and checks and move towards cards and apps. But it’s important to see that fintech companies are even winning the checking account war with banks, which underscores just how important it is for companies in the accounts receivable management industry to be at the forefront of not only understanding consumer preferences with respect to payments, but also being able to accept as many different payment methods as possible.
Digital banks and fintechs have captured nearly half of all new checking accounts opened so far in 2023, and the share of checking accounts opened by megabanks, like Wells Fargo, Bank of America, and JPMorgan Chase have dropped to 17% from 24% in 2020. The share of accounts opened at regional banks and credit unions have fallen as well. Chime and PayPal represent 43% of all digital bank/fintech account openings and 20% of all new checking accounts opened in 2023, according to a report from Cornerstone Advisors.
Interestingly, more Americans are opening checking accounts this year than in year’s past. Thus far through 2023, 14% of Americans have opened a new checking account, compared to 15% that did so in all of 2022 and 10% in 2020.
The number of consumers — across all age demographics — that say a digital bank or fintech is their primary checking account provider has increased in every category between 2020 and 2023. Younger consumers are paying with “everything” today, according to the report — including Apple Pay, Venmo, PayPal, and Klarna just to name a few.
The “checking” account of the past is also changing. Checking accounts from fintechs like PayPal and Square are “reconfigured mashups of features and functionality from separate financial products,” according to the report. It’s important for companies in the ARM industry to be changing with the times, too.