As Internet financial services struggle to compete and attract consumers, the inability of these branchless banks to let consumers make deposits continues to hamper mass-market adoption of online-only banking. Internet bank Juniper Financial Corp. has sought to solve this problem by forming a partnership with postal services franchiser Mail Boxes Etc. to let its customers make deposits to their accounts from several U.S. Mail Boxes Etc. locations.
Beginning this fall, Juniper Financial customers will be able to mail deposits from Mail Boxes Etc. via United Parcel Service second-day air or overnight shipping. Mail Boxes Etc. will process the order and issue a UPS tracking number so the shipment can be tracked online at the Juniper Web site or the Mail Boxes Etc. Web site. Customers will not be charged for this service.
Richard Vague, Juniper Financial's chairman and CEO, says the bank is looking at several other retail companies to help it solve the problem of making deposits for its customers. Vague says retail organizations that fit the criteria for partnership with the online bank will possess "a nationwide presence, professional, high-level customer service, and convenient locations for consumers to get into and out of."
Juniper's partnership with Mail Boxes Etc. is a "very good first step in providing a place for customers to make deposits," says Paul Jamieson, senior analyst for banking and payment services at Gomez Advisors. Jamieson says Juniper should use its relationship with Mail Boxes Etc. to distribute its brand and to offer more banking services to leverage its consumer and small- and home-office business customers.
Although several Internet banks and brokerages have recently adopted some form of physical presence to give consumers more options when conducting financial transactions, Vague says a physical presence is not mandatory for Internet banks to attract and retain accounts.
Jamieson disagrees, saying that Internet financial services are limiting their growth and appeal to today's banking customers by ignoring the necessity of having multiple distribution channels. He adds, "Customers haven't traded off the peace of mind that a physical presence brings for higher interest yields and lower banking fees."