The Sticky Duo: Free Checking & Bill Pay
Your institution doesn’t just offer, it heavily promotes Free Checking. It’s done this for decades. Because that’s what you do, right? (At least until you see some convincing case studies supporting anything different!)
In fact, under your team and your predecessor’s leadership, you saw your institution double in assets and account holders…and probably double again.
Free checking is a mainstay, one of the perks of your institution. Now we’re suggesting changing it and putting in a Value-Added Checking program?
It seems to defy all logic. Well, we never said replacing it. You can keep your free checking, while also providing real value to members who want it.
On its own, Free Checking doesn’t generate much revenue. It’s mostly subsidized by a variety of punitive fees, which account holders don’t really like (and it hurts your most vulnerable the most). You could eliminate them, or at least reduce dramatically. Your credit union wouldn’t be alone. And, to be honest, even with that financial support, it’s still likely a loss leader.
But it’s a thing you have to have. And it performs an important service. Besides providing a safe and reliable place for members’ funds, it’s also the hub for your Bill Pay platform.
It’s your glue for attracting, acquiring, and maintaining account holders. Coupled with your online banking, mobile app included, it’s literally a sticky solution that keeps all your other services running smoothly.
I mean, let’s be real: How many people would take the time to transfer every automatic payment in their bill pay? Then send voided checks to their utilities and other regular withdrawals?
Yeah, that sounds way too difficult. So long as you provide good to great service, few will ever bother to leave. Right?
Not so anymore.
Switching (Financial Institutions) Just Got Easy
I switched financial institutions twice in the past five years. The first was a full transfer, moving funds, changing bill pay settings, resetting debit/credit card transactions. It. Was. A. Pain.
The second time I made only minor changes, switching some accounts for bill pay. Still frustrating, as I had to order paper checks just so my water utility could change my payment method.
Now, there’s a better way. Making good on the promise of “there’s an app for that”, software platforms such as Q2 help account holders change seamlessly. That means your checking and bill pay platforms are no longer sticky. Retaining customers becomes more about what you offer than how hard it is to leave.
And online banks, Fintechs, even Neo-Banks are making strong inroads. In fact, accounts at FI’s have decreased by 690 million in 2011 to just over 600 million in 2017.
That’s a 12% decline. In only 6 years. Places you never considered as competition for the banking industry now handle your former account holders. Like Walmart. Or 7-Eleven.
And don’t get me started on what a possible Amazon Prime checking could do to your portfolio. (Spoiler: It’s not great.)

Your checking program is where loyalty, engagement, and onboarding really begin. So what are you doing to ensure it’s firing on all cylinders? This Cheat Sheet will give you 4 quick, actionable steps to make the most of your checking program.
Get the Cheat Sheet
Blockbuster, Toys R Us, Sears…Missing the Change

As a reader of this article, you’re on the cutting edge of banking changes.
So you realize how quickly the evolution is happening. And that ignoring the changes or not identifying the threats is exactly the wrong path to take.
In fact, you know this strategy resulted in the death of some historically “they’ll always be around” companies.
- “Be kind, rewind” is not just a Millennial homage to simpler times; it’s a jab at a company which stared down change and said, “nah, we’re good”
- “I don’t want to grow up, I’m a…” is a song that couldn’t adapt to the world of online buying
- In many ways, Sears Roebuck was the first Amazon. From their catalog, no matter where you lived, you could get a huge range of products. (Did you know they even sold build-your-own homes?)
Your institution recognizes change. Your team knows the risks of ignoring emerging threats.
You’ll be around tomorrow…and beyond.
Questions on Converting From Free to Fee
So we identified a series of threats. And through wide-ranging research, you feel that implementing Subscription (Value-Added) Checking might be one way to reignite excitement in your own products and services. Great, but you have questions:
- How will our account holders react to converting their free accounts to fee-based?
- What are their options if they do not want the new Subscription (Value-Added) Checking account?
- How can we make a smooth transition?
- For our staff:
- Trained and excited!
- For our members/customers:
- Remain happy and informed
- For our institution:
- Do all this while substantially increasing our revenue?
These are important points. If they’re not addressed ahead of time, you could be in for a challenging transition.
So we’re going to help you answer those questions. By grabbing our virtual magnifying glass and looking at what others did when in your position.
We have three case studies from various sized institutions to review. Each has lessons to take home (or to work if we’re being literal). Together, we hope they help you decide what path is right for your institution.
If you decide Value-Added Checking may be right for you, and choose to schedule a meeting with us, we would be happy to include the actual names.
Case Study #1
Type: Credit Union
Size: 11,500 members, $116M asset size (as of Sept. 2018)
Primary issue: Cost of maintaining free checking accounts
This credit union had a similar challenge to many financial institutions: How to grow when your primary service doesn’t make money. Their leadership team understood that simply adding fees or other charges, without adding additional value, would upset members.
To increase revenues while delivering more to their members, the credit union implemented a Value-Added Checking offering.
The credit union took a cautious approach, offering the Identity Protection Monitoring and Resolution program, as they had concerns about price elasticity. The price was set at $3.95 per month, with a discounted relationship pricing of $1.95 if the member met one of the following criteria:
- Seniors
- Students below the age of 24
- Use direct deposit and e-statements
Unlike most financial institutions adopting Subscription (Value-Added) Checking, this credit union opted NOT to offer any free checking account.
Case Study #1: 11,500 Member Credit Union
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Interviewed following implementation, their CEO shared satisfaction with the program and its results, and given the option, wouldn’t change anything.

Learn how one credit union made the change to subscription and the gains they saw following. Could you duplicate with your members? Get the data and honest insights needed in the Client Story.
Case Study #2
Type: Credit Union
Size: 140,000 members, $1.4B asset size (as of Sept. 2018)
Primary issue: Differentiation
Our second case study brings us to a larger credit union. Their management team wanted to go big with a new checking solution. The primary objectives:
- Differentiate from other institutions
- Increase member excitement & loyalty
- Generate revenue
They added the Subscription (Value-Added) benefits into the credit union’s existing two-tiered checking.
By retaining two checking accounts, there was still a free one for those who wished to downgrade following the rollover.
To build excitement, each staff member was given complimentary Value-Added Checking benefits and received training in how to leverage for themselves, as well as explain to their members.
After personalized mailings to every checking account holder and in-person training for all staff members, they had stellar results.
Fewer than 10% of members opted for the free account.
At the same time, the credit union increased annual revenues by nearly $2 million and, as of publishing, they continue to increase their monthly new account sign-ups.
Here are the details of the changeover:
Case Study #2: 140,000 Member Credit Union
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Case Study #3
Type: Bank
Size: 90,000 checking accounts, $20.4B asset size
Primary issue: Adding value for customers
Our final case study is of a bank which implemented Value-Added Checking and reaped the benefits while enjoying a comprehensive staff training program.
Their primary concern was adding value for their existing customers. They did this by separating themselves from competition with exciting benefits, thus ramping up account acquisition. Additionally, if they had to increase their income streams, then that was just fine!
This bank created an account with Family IDProtect and Cell Phone Damage Protection, setting the monthly cost at $10.
How did it go? And where did training fit into the picture?
Case Study #3 – 90,000 Checking Account Bank
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Final Thoughts
These three institutions couldn’t be more different. However, they had one thing in common: They all became more than just a place for their members or customers money.
And they did so profitably. Plus, they managed to make their checking account “sticky” by creating a solution their account holders wanted to keep. I mean, once you’re hooked on all the great content, you won’t cancel Disney+, right?
With benefits ranging from ID Theft Protection and Restoration to discounts on a wide variety of products and services, account holders got more out of them than the monthly cost. Everyone wins.
Learn how your institution can reduce costs, increase revenue, or just plain differentiate from your competitors by contacting us. Additionally, we are happy to share the names of these institutions during a private meeting.
We’ve worked with many banks and credit unions in this discovery process. We’ll be happy to discuss if a Subscription (Value-Added) Checking program makes sense for your financial institution.
To learn more about Free Checking and its growing challenges moving forward, read more in our Checking section and download some of our wide range of Cheat Sheets, eBooks, Client Stories, and more!
Image credits: Header (flipped horizontally) by Hebi B. Headstone by Trudy Harper. Both from Pixabay.

Blogger. Speaker. Futurist. Part-time Jedi.
Dedicated to helping your credit union, large or small, deliver mission-focused financial empowerment to your members. And make a positive impact on your community while you’re at it.