Value-Added and Rewards Checking Programs: Which is Best for our Financial Institution?

Apple and Oranges
(Last Updated On: March 9, 2020)

Value-Added & Rewards Checking. An Honest Comparison.

So, your financial institution is considering a new form of checking account. Congratulations on your initiative!

Savvy consumers know there are many options in checking, from categories including:

  • Credit unions
  • Community banks
  • Mega banks
  • Online banks (that includes PayPal now, too!)
  • Neo banks/Fintechs (Simple, Varo, Chime)
  • And Amazon could be next

That’s a lot of choices, from old-school traditional bank, all the way to bleeding edge, mobile-only startup. These options make your checking accounts a commodity.

Compared to the new upstarts (and similar companies acquired by the big banks), a typical account is a gray painting on a grey wall. It’s fine, but it definitely doesn’t stand out.

What if it could?

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Two kinds of checking account options can brighten up your wall of services:

Rewards & Subscription (Value-Added) Checking

Both offer the potential to grow loyalty and income, while attracting new account openings. But which approach is best for your financial institution?

We’re here to help. Even though we specialize in Subscription (Value-Added) Checking, our goal is for you to walk away satisfied, and part of how we achieve that is by providing information on each type of Checking program, not just the one we offer.

For the purposes of this comparison, even though there are several firms offering these services, we will focus on the most popular providers:

  1. Kasasa® for their Rewards program
  2. EconoCheck® for their Subscription (Value-Added) Club Checking program

We want you to be able to choose the service that’s best for your institution. Let’s talk about how the two types compare in these areas:

  • Revenue (Non-interest income)
  • Implementation
  • Cost (initial and lifetime)
  • Qualification
  • Training
  • Account holder benefits
  • Institution benefits (other than revenue)
  • Account acquisition
  • Account holder loyalty
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Rewards Checking

Let’s start with Rewards Checking, and get the “uncomfortable” money part out of the way first: The account generates income through interchange fees as your account holders use their debit cards.

Of course, because you’re offering rewards based on usage, more swipes will occur. It becomes a form of “profit sharing” between your institution and your account holders.

The most common form of rewards is cash-back with higher interest rates. In this arena, Kasasa® is the leader and most popular provider to financial institutions. A Harris Poll consumer study suggests a large majority of millennial account holders prefer this type of account:

Millennials Switching Checking for Better Rewards - Harris Poll Consumer Study
Data from Harris Poll consumer study

The Kasasa® account is always linked to a free checking account, generally with no minimum balance. The goal is to generate income for your institution while sharing a portion of the overall revenues with your account holders.

What’s It Look Like?

Rewards checking can take a few forms. Here are the current offerings (Source: as of Dec. 18, 2018):

  • Kasasa Cash®: A high interest rate account, paid in cash, for every month the account holder qualifies.
  • Kasasa Cash Back®: Earn cash back on everyday debit card purchases with no category restrictions.
  • Kasasa Tunes®: Earn monthly iTunes® and Amazon® credits, perfect for online shoppers, music lovers, and app gamers.
  • Kasasa Saver®: A separate free savings account linked to the account holder’s Kasasa Cash or Cash Back account. Every month, ATM fee refunds and interest earned in linked accounts is automatically transferred here. This account also earns a high rate of interest.

It’s Still Yours

Just to be clear, even though the account is marketed with Kasasa branding, it’s still 100% an account at your financial institution. That means it still receives full NCUA or FDIC insurance.

The rewards features are an add-on on top of your existing account. Kasasa makes money through a contractually-agreed upon fee. Their role is to supply the administrative software and services, as well as the training and consulting needed to maximize your institution’s returns.

Your institution decides:

  • Minimum $ to open account (no minimum balance after opening)
  • Cash back percentage
  • Interest rate
  • Debit qualifications
  • Overall marketing plan

How Do Account Holders Enroll with Our Kasasa® Accounts?

After staff training, your institution receives recommendations, templates, and materials on how to effectively market the new account(s) to current and new account holders.

These tools use traditional “opt-in” methodology, reaching account holders through e-mail, newsletters, branch signage, statement notices, on-hold messages, and social media.

How Does it Work for my Account Holders?

Rewards are calculated based on a rolling monthly cycle. This period begins on the last day of the previous month through the second-to-last day of the current month.

For example, the January cycle is December 31 through January 30. Qualifying actions and rewards-eligible transactions must post on the account holder’s account within this time. Kasasa limitations and qualifications (see footer)

When do the Rewards Arrive?

ATM fee refunds post on the last day of the month. Interest posts on the 1st of the month and migrates to the Saver account if it’s available.

How Does Account Holder Track Eligibility & Earnings?

The account holder will receive an email letting them know whether or not they qualified and, if so, what rewards were earned.  If they don’t meet qualifications, they receive a guide on what is needed next month and encouragement to try again.

Subscription (Value-Added) Checking

Now that we have seen the rewards side, let’s look at Subscription (Value-Added) Checking. Think of it as a subscription checking platform.

The leading company in the arena is EconoCheck® (which we represent). Their premier product offering is Club Checking, a package of consumer benefits headed up by their comprehensive ID Protect program. A fee-based replacement for free checking, it provides a unique value proposition.

Wait…what? Pay? But wasn’t that the point of free checking? Well…72% of banks already charge for checking, and credit unions which have free checking may be missing out. Nearly half of 30-something Millennials said they would pay $5-10 a month if Amazon offered a checking account which included:

Amazon Checking
Why wait for them? This could be yours.
  • Cell phone damage protection
  • ID theft protection
  • Roadside assistance
  • Travel insurance
  • Product discounts

This is according to a 2017 survey conducted by Cornerstone Advisors. If only there were some account which could do all this at your financial institution…

How Does It Work?

EconoCheck® assists with the design of your institution’s package, highlighting their most popular and requested offerings. Once you agree upon the product mix, your branding is added, so whenever an account holder uses a benefit, your logo is prominent.

Finally, your institution will add its mark-up. Monthly retail costs range from a low of $2.95 to as high as $10.00, with an average of $5.95. The benefits sit on top of your regular checking account with all its normal features.

As the new fee-based account replaces your free one, EconoCheck® makes the following recommendations for a “frictionless” transition:

  1. Establish a “fall back” free checking account for those account holders who do not want to switch to a fee-based account and,
  2. Offer account holders a 90 day money-back guarantee.  
  3. Utilize “Relationship Rewards”: Reducing costs when account holder meets activity marks, ie. debit card usage. This rewards account engagement while generating more income for your institution.


EconoCheck® provides robust on-site training for every staff member, who then transfer that excitement and knowledge to your customers. By providing the service free of charge to staff, they can enjoy the benefits and services for themselves.


Two informative direct mail packages, with full color brochures, are developed and mailed to your current account holders. The materials explain in detail the benefits and advantages of the new account, and the date when the first fee will be deducted. Awareness and education are essential for a smooth launch.

What Can We Expect from Account Holders?

Handshake through Laptop
I can guarantee this will not occur. Whew!

Once the letters start to arrive, expect an increase in inbound communications from account holders.

There will be questions about the new account, the cost, and from some, requests to keep a free account.

That’s totally normal. This is where your staff training really shines, so they can explain the value of the account, as well as manage these inquiries.

Your social media channels must be monitored as well. Online, the snowball effect is very real and can become an avalanche of misinformation and frustrated account holders if not proactively addressed. Be upfront, be clear, and be responsive.

The volume typically falls back to normal levels around 60 days after the letters go out.

Let’s Compare: Rewards & Subscription (Value-Added Checking)

Now that we have a clear background on what each approach includes, we can begin to assess their strengths and weaknesses across a variety of categories. Join us as we work towards a winner!



There are set-up costs to your institution. There are also monthly costs which support marketing and training. The company would also charge your institution a small monthly fee for every opt-in account. 

As a result, all Kasasa accounts are free to the account holders. Your institution may set its own qualifications such as requiring:

  • Minimum deposit to open
  • A minimum # of Direct Deposits
  • Enrollment in online banking
  • Enrollment in e-statements and log-ons

Subscription (Value-Added)

There is a start-up cost, typically around $7500, which is credited towards the company’s expense for marketing and training. The ongoing costs depend on the benefit bundle selected, which averages about $1.80 monthly per account.

The revenue-generation for your institution comes from the decided mark-up to that monthly cost. Generally, it averages $5-$6 monthly per account.


Rewards checking does have up-front costs, plus continuing monthly costs.  With Rewards, there’s usually no cost to account holders.

However, some credit unions (like CBC FCU) implement fee-based rewards programs. In a way, these are closer to value-added programs than what you traditionally consider "rewards".
Pile of Dollar Bills

When account holders fail to use their debit card, the bank may take a loss on these accounts, since fees are charged regardless to the bank.

On the flip side, marketing encourages more overall debit usage, thereby generating income. Value-Added checking does have a fixed up-front cost, but also a built-in system to avoid monthly costs as they are passed on to account holders. Winner: Rewards.



New accounts are set up, ensuring they meet the Kasasa terms and conditions (and requesting any approvals as needed). Integrating Kasasa’s recommended marketing strategies requires minimal staff and time resources.

Subscription (Value-Added)

EconoCheck®’s process for Club Checking recommends changing the terms and conditions of an existing (usually free) account to a fee-based account.

To ensure a smooth conversion process, this will require your institution to make additional communication staff and resources available, as well as setting up a new “fall-back” account for those who wish to remain with a free account.


Changing from free to fee for Subscription (Value-Added), even with additional benefits and options to stay with a free account, can be viewed negatively by some.

Staff will need to be sensitive to this and closely monitor social media channels. Rewards checking offers a simple opt-in enrollment process, promising potential benefits and no costs for account holders. Winner: Rewards.



Account holders typically don’t pay a fee for their accounts. There are two factors which determine the net revenue of a Rewards checking program:

  1. How successful the marketing is in gaining enrollments
  2. The qualifying debit card usage by account holders
Credit Cards Sticking Out of Wallet
More swipes is nice, right?

Marketed correctly, Rewards checking will generate a burst of “opt-in” enrollments when the program is first introduced.

Consistent marketing, combined with knowledgeable staff, can continue to grow the number of enrollments, and the volume of qualifying debit card usage.

According to Kasasa, the average debit card swipes for Kasasa Cash is 21 per month and 26 for Kasasa Cash Back. This typically yields a 45% increase in non-interest income.

Subscription (Value-Added)

Piggy Banks Lined Up

While institutions may vary in which benefits are offered, and the fees they charge, non-interest income from a Value-Added program is more predictable.

A typical Club Checking bundle combined with an average fee of between $5-$6, will generate approximately $45-$50 annually per account.

This translates to between $800,000-$1,000,000 every year in non-interest income for every 20,000 account holders. And your institution can begin receiving this new income monthly only 90 days after implementation.


Subscription (Value-added) checking’s unique “opt-out” implementation creates a large and immediate revenue stream.

Using past experience, roughly 80% of the current account holders will keep the Subscription (Value-added) account, generating substantial and more predictable non-interest income. Winner: Subscription (Value-Added).



Account holders must take certain actions to qualify for rewards. These generally consist of a minimum number of qualifying debit card swipes, and possibly also direct deposits and enrollment in e-statements.

Subscription (Value-Added)

The only qualification is the monthly fee. No other account holder actions are necessary to qualify for benefits. In the event of insufficient funds, the benefits may continue during a 60 day grace period.


Not all account holders will meet the Rewards checking usage requirements every month, meaning benefits for them can vary. This creates an unpredictable income stream of interchange fees for your institution as well.

Benefits for account holders, and revenue for your financial institution are more consistent and predictable with Value-Added. Winner: Subscription (Value-Added.)

Account Holder Benefits


Some will get, some won’t. It all depends upon their debit usage and other qualifying actions. An account holder who makes 10-20 qualified debit purchases monthly could receive several dollars in rewards, in addition to any ATM fee refunds your program includes.

To ensure the highest percentage of account holders act consistently in this manner, regular marketing is necessary to keep these perks top of mind.

Subscription (Value-Added)

Benefits depend on the chosen feature mix and enrollment option. Let’s assume your institution is using a typical bundle with ID Protect, Cell Phone coverage and AD&D.

All of these benefits are available to all the account holders. There may also be numerous other money and time-saving benefits which add up to substantially more than cash rewards.


Rewards gives back, but it’s dependent on your activity. Value-Added benefits and coverages are always there. Overall cost favors Rewards Checking. Here, account holder benefits favor Value-Added. Winner: Subscription (Value-Added).

Institution Benefits


The more you use it, the more you get out of it. Therefore, loyalty and “top-of-wallet” mindset is reinforced, thereby aiding in retention.

In addition, marketed properly, Rewards Checking can be leveraged for new account acquisition.

Subscription (Value-Added)

As with Rewards, Subscription (Value-Added) Checking can also increase loyalty, retention, and new account acquisition. In addition, one of the main features, ID Theft/Resolution, has an interesting side-benefit.

While protecting your account holder, it is also protecting your institution, as their fraud becomes your responsibility. What they don’t lose, you don’t have to spend. Plus, all those shopping, travel, pharmacy, and eyewear benefits have your logo prominently featured upon access.


Both plans will positively affect account holder behavior. Value-Added includes benefits that can save your institution time and money while keeping your branding visible each time a service is used. Winner: Subscription (Value-Added).

Which is right for your financial institution?

Do you come to a conclusion by just adding up the “winners”? Not at all. Some categories carry more or less weight within your institution. Providing this “scoring” system is our way to help you focus your search.

Your team understands your checking program priorities best. We can only offer guidance and education on different aspects to consider as you determine the best fit for you and your account holders.

Rewards Checking generally fit institutions which:

  • Fully believe in Free Checking
  • Have key retail staff to offer
  • Will commit to consistent marketing to members
  • Trust in building through “opt-in”

Subscription (Value-Added) Checking will work well if your institution:

  • Wants to generate the most income
  • Has staff and system to effectively manage conversion
  • Believes your checking benefits are worth more than the cost
  • Is looking to minimize or do away with Free Checking

At GreenProfit Solutions, Inc. we represent the Subscription (Value-Added) Club Checking program powered by EconoCheck®. If you think this type of checking program might be the right choice for your institution, we can answer any questions you have!

This is just one of many articles about maximizing your Checking offering. More are waiting for you!

Joe Winn - CU Geek

Blogger. Speaker. Part-time Jedi.

Focused on helping your bank or credit union grow in the face of emerging challenges.