Simple Banking App Shutting Down - BBVA USA Transition

A wave of consolidation is occurring within the challenger banking sector. BBVA has informed Simple users – those of the innovative mobile and online banking application it purchased for $117 million in 2014 – that it intends to discontinue the service, integrating accounts into BBVA’s USA operations.

This decision stems from BBVA’s ongoing efforts to refine its operations – a company that has historically been an active investor in and acquirer of startups – as it progresses toward finalizing a merger with PNC. Last November, PNC announced its agreement to acquire BBVA’s U.S. division for $11.6 billion.

In a communication distributed to users earlier today – and widely shared on Twitter – Simple stated that accounts will be transitioned to BBVA USA, where they are currently managed.

Further specifics regarding the transition to BBVA will be communicated to users in the near future, according to the notification.

The reaction from Simple’s customer base has been largely negative.

Users chose the service for its quicker and more contemporary experience compared to traditional banking institutions. Switching financial providers can be disruptive, and many customers had been long-term users of Simple.

Although Simple was ultimately acquired by a traditional bank – BBVA, a globally significant financial institution based in Spain – it largely operated independently, reflecting BBVA’s strategy to incorporate more modern services to appeal to a younger demographic.

We have reached out to both BBVA and Simple for additional information, and BBVA’s official statement confirming the shutdown is included at the end of this article.

Currently, the emailed notification appears to be the sole communication regarding these changes to customers; there are no alerts within the mobile application, nor any announcements on the Simple website.

The current number of Simple users is not definitively known. The platform had approximately 100,000 users at the time of its acquisition in 2014, and some believe the service was ahead of its time.

Since Simple’s launch, there has been a substantial increase in the number and popularity of neobanks and challenger banks worldwide, including Nubank, Chime, Current, N26, Revolut, Monzo, and others. This has transformed what once seemed like a novel idea into a widely accepted concept.

These newer banks leverage APIs to integrate services and operate on the infrastructure of established banks, enabling them to be more adaptable and offer modern interfaces on contemporary platforms, such as mobile applications.

By moving away from traditional banking features like physical branches and teller interactions, these newer institutions utilize algorithms to assist customers in managing their finances throughout the month, offering insights into spending habits and suggesting savings strategies or improved financial organization.

The situation with Simple highlights the inherent risks associated with utilizing newer “challenger” banking services. There is always a possibility that smaller services may not maintain the same level of stability as their established competitors. However, recent events and broader financial crises have challenged this perception.

Simple has occasionally discontinued certain features – such as Bill Pay or specific account types – without prior notice, requiring users to seek alternative solutions.

The next step will be for users to decide whether to remain with BBVA, explore another challenger bank, or return to a larger, more established financial institution, all of which are continually working to modernize their offerings. A wide range of options are currently available.

We will provide updates to this article as more information becomes available.

Update: Here is BBVA’s statement:

BBVA USA consistently assesses its strategic priorities and resources, including current and prospective collaborations with external organizations. In light of the impending merger with PNC, we have reevaluated our objectives for BBVA USA to ensure a focus on initiatives that best position the company for future success, either independently or as part of a potential combination with PNC. Consequently, we are expediting certain changes and discontinuing others, including the closure of Simple. These evaluations are standard practice and have previously led to the closure of other ventures based on performance and economic conditions, such as Covault (2020) and Denizen (2019).

Simple customers already maintain a relationship with both BBVA USA and Simple. We will be migrating these customers to the award-winning BBVA USA mobile application. Upon the completion of the acquisition, these customers will become PNC customers, subject to standard closing conditions. As part of BBVA USA, Simple customers will gain access to a more comprehensive range of products and services, along with the bank’s highly-rated mobile app, which includes BBVA Financial Tools.