PITTSBURGH– PNC Bank has announced what it is calling a “groundbreaking” Low Cash Mode digital offering for its Virtual Wallet customers it said is designed to help avoid overdraft fees, a move it said could save its customers as much as $150 million a year in fees.
The bank said it will do so via “unprecedented account transparency and control to manage through low-cash moments or mis-timed payments.”
According to PNC, Low Cash Mode, built on patent pending technology, comes with the Spend account inside of the Virtual Wallet that “gives customers Payment Control, including the power to prioritize by determining whether certain debits (checks and ACH transactions) are processed that otherwise might result in overdrafts, rather than the common industry practice of the bank making the decision. Real-time intelligent alerts let customers know when their balance is low and – if it is negative – Low Cash Mode provides at least 24 hours of ‘extra time,’ and often more, to prevent or address overdrafts before fees are charged."
With the implementation of Low Cash Mode. PNC said it expects to help its customers avoid approximately $125 million to $150 million in overdraft fees annually. The bank said its full year 2021 revenue outlook anticipated the fee reduction, and as a result is not impacted by this change.
Aligning With ‘Well-Being’
"Low Cash Mode gives our customers the ability to avoid unnecessary overdraft fees. With this new tool, we're able to shift away from the industry's widely used overdraft approach, which we believe is unsustainable," said William S. Demchak, PNC's chairman, president and CEO. "Low Cash Mode is a great example of how advances in our technology allow us to better align with a core principle of supporting our customers' financial well-being. This is the right move for our customers and the bank.
"While we expect to realize a reduction in fee revenue, we firmly believe that this innovative and differentiated approach will drive significant growth in new and existing customer relationships over time as we execute our national expansion strategy," Demchak continued.
PNC said Low Cash Mode has been thoroughly tested and showed “impressive results” during a pre-launch pilot with nearly 20,000 customers, helping them collectively reduce overdraft fees by more than 60%.
Low Cash Mode will launch nationwide to Virtual Wallet customers in June and July via the PNC Mobile Banking App on Apple and Android phones.