Being a bank whistleblower, it’s important to find alternatives to the “too big to fail” banks. It’s actually easier than you’d think – I still have all the benefits I enjoyed with my Bank of America accounts and don’t have to worry about being illegally overcharged for overdraft fees.
The majority of online payment options listed below don’t offer the option for direct deposit, which is a vital service for anyone who gets a regular paycheck, or wants to receive their tax refund, student loans, grants, social security, pension, etc. payments faster.
Although NetSpend is a prepaid debit card company, it offers direct deposit through MetaBank. Because of this, the NetSpend card is a great way to supplement your digital wallet account.
You can order a NetSpend account on the NetSpend website. You’ll receive a $20 credit as soon as you open an account and deposit $40.
PayPal is the online digital payment service of choice for millions of online professionals. Whether you’re a business or personal customer, PayPal has an option for you.
Last year, PayPal split with parent company Ebay, which is likely a move to allow it to become FDIC insured just like the deposit banks and credit unions.
PayPal doesn’t allow direct deposit, but it does allow P2P payments via email address, money transfers to most banks (though not MetaBank, which underwrites the prepaid PayPal debit), and ATM withdrawals through the PayPal debit card.
You can also get a PayPal Here reader to allow you to swipe cards and accept payments directly to your PayPal account balance (making balance transfers much quicker than any traditional bank).
PayPal used to offer a referral program, but these days, the 100-million-strong service sees no need for the growth program so it’s been phased out.
3. Google Wallet/Android Pay
Like Glass, Google was a few years ahead of its time when it released Google Wallet in 2011. Available only in the U.S., Google Wallet was one of the earliest services to allow phone payments by taking advantage of the NFC chip embedded in most smartphones.
Though unsuccessful, Google Wallet was integrated into the Play Store and issued a card, so you can deposit money to purchase Android apps, games, and freemium in-game purchases, or buy a soda or pack of cigarettes when you change your mind. The app can also be downloaded onto an iPhone, though tap-to-pay doesn’t work.
In February 2015, Google purchased Softcard from mobile carriers and integrated both services into Android Pay, a rebranded competitor to Apple Pay. Android Pay was released in September 2015, and you should expect to see the services merge throughout 2016 and 2017.
Neither Google Wallet nor Apple Pay supports direct deposit, and payment authorizations will often hold double the transaction amount in two separate transactions (one pending, one completed) so the service isn’t for those on shoestring budgets.
4. Apple Pay
If you have anything Apple, chances are you have everything Apple, and for the fervent Apple fanboys and girls in the audience, Apple released Apple Pay in 2014.
Apple Pay works exactly like Android Pay/Google Wallet, and, although iPhones prior to the iPhone 6 don’t include an NFC chip, pairing to an Apple Watch allows you to pay from your watch instead of a phone.
Like PayPal and Google Wallet/Android Pay, Apple Pay doesn’t allow for direct deposit. Also, instead of allowing purchases in Google’s Play store, Apple Pay enables purchases from iTunes and the App store.
There is no debit/credit card associated with Apple Pay.
5. Green Dot
The leader in reloadable prepaid debit cards, Green Dot offers a wide variety of cobranded cards aimed at those without bank accounts.
Russel Simmons offers the Rush Card, which uses Green Dot, and a large portion of the reloadable debit/credit cards you see in brick-and-mortar retail locations are issued by Green Dot.
Green Dot allows direct deposit and online banking, though, like NetSpend, the per-transaction service fees can quickly get out of hand. As with any prepaid card, it’s best to use as few times as possible to reduce service fees.
The benefit to Green Dot cards is the lack of any ability to overdraft. When I was a kid, overdraft protection was optional and if you didn’t have money, your card would simply be declined. Banks these days purposely find every way possible to overdraft the poorest among us.
6. Saumsung Pay
Always ready to compete with Apple, Samsung released Samsung Pay in 2015 as an alternative to Google Wallet and Android Pay.
Only available on Samsung devices, what separates Samsung Pay from the pack is the ability to use both NFC and MST payments, through its acquisition of LoopPay. This means you can use Samsung Pay at either an NFC or magnetic strip reader (although this comes with security issues, as MST is unencrypted and doesn’t follow the EMV security standard).
Samsung Pay also works on the Samsung Gear S2, which can be paired to an iPhone, making both Samsung Pay and Google Wallet accessible to Apple users, though Apple Pay isn’t available to Android users (nor is it likely to ever be).
Like Apple, Android, and PayPal, Samsung Pay doesn’t accept direct deposit (nor is it ever likely to).
And of course, no conversation about banking alternatives is complete without discussing bitcoin, the perennial favorite commodity/currency among hackers, pirates, and those involved in the illicit.
Bitcoin is the preferred method for cash-like transactions online for the ability to send to anyone. For example, when PayPal, Bank of America, and Visa teamed up to halt payments to Wikileaks in 2010, Bitcoin became exceedingly popular, netting early adopters huge gains throughout 2011.
Now somewhat stabilized, bitcoin (along with other cryptocurrencies such as litecoin) have a solid following and rising interest among younger people.
Bitcoin isn’t a deposit account, so there’s no direct deposit and if you want to make a purchase somewhere that doesn’t accept cryptocurrency as payment, you’ll need one of the alternatives above in order to pull your money out.
Brian Penny is a former Business Analyst and Operations Manager at Bank of America turned whistleblower, troll, and freelance writer. His work appears in Huffington Post, High Times, Fast Company, Hardcore Droid, Quickbooks Small Business Resource, Cannabis Now, and The Street.