Financial Technology

Financial Technology

February 24, 2014

Wheelings & Dealings: Simple Online Bank is Acquired by BBVA for $117 M

Since the economic crisis, the news coming out of Spain has been bleak. The country has one of the highest unemployment rates in Europe, with youth unemployment reaching as high as 40 percent. So the acquisition of Simple, an online bank whose founding premise was to get rid of the headaches of traditional banking, by the second largest bank in Spain for $117 million, was unexpected to say the least.

Banco Bilbao Vizcaya Argentaria (BBVA) is a global financial services group founded in 1857 with large positions in Mexico and leading franchises in South America as well as the Sunbelt region of the United States. The bank has 50 million customers in 31 countries with 7,688 branches. It was the first bank in Spain to support mobile payments with its BBVA Wallet service with mobile applications for Android (News - Alert) and iOS platforms.

BBVA posted gross income of more than €21 billion or $28.8 billion in 2013 with net profit of €2.23 billion or $3.05 billion, up 33 percent from the previous year.

The acquisition will provide Simple an international partner with the possibility of expanding its services to other countries around the world in which BBVA operates, but it will be doing so independently along with other assets BBVA operates in the U.S. Currently Simple only provides its services to residents in the United States.

The Simple online banking platform offers users an application to help account holders keep track of their spending habits with a user friendly interface, without charging too many fees. A few examples of the fees it charges are: a $2 International ATM cash withdrawal fee, an $8 treasurer's check fee, and a $1 fee for over the counter cash withdrawal. The company has more than 100,000 customers and the number of its users has grown 300 percent last year in 2013, processing $1.7 billion in transactions.

When a user opens an account the company provides a Simple Visa card, the application for the mobile device – Android or iOS –, and customer service. The banking partner before the acquisition was Bancorp Bank: Member FDIC, the company did not announce any changes on this front. Once the account is open users can use the application to completely manage their accounts. The company requires customers to own mobile devices that can run its mobile app on an Android device with 4.0.3 (Ice Cream Sandwich) or higher, and iOS device with iOS 5.0 or higher.

Edited by Cassandra Tucker

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