@Banks: Sell Overdraft on Mobile Right When Customers Need It

Overdraft fee regulation change means that banks have to essentially pre-sell a high-interest, low-line loan product in a market that is more and more suspicious of lender practices.

The initial strategies of freaking out consumers into signing up is unlikely to create traction for a product that is usually the second choice plastic in the case of a sudden need for buying power.  A quote from JPM’s attempt by mailer read:

“Your debit card may not work the same way anymore even if you just made a deposit,” reads a Chase notice. “If you don’t contact us, your everyday debit card transactions that overdraw your account will not be authorized after August 15, 2010 — even in an emergency.”

It was fairly obvious to me as I fed this letter into my cross-cut, that for an institution that has nearly 5 million mobile banking users, the path to selling overdraft is through mobile alerts or messaging on mobile banking apps.   Text me when my account is below $1000, $100 or whatever the relevant balance is for that customer.  For your free checking folks, hit them on the 30th and the 14th when balances are notoriously low.

Don’t threaten that my debit card won’t work the way it used to, because despite my Amex and credit cards are working great.