Table 1

Launch Monitor

Number of Net-only brands launched by year

Year	Number*	Cumulative
2000 YTD	11	35
1999	17	24
1998	3	7
1997	1	4
1996	2	3
1995	1	1
Total Launched	35
Merged/Shuttered	1 (citi f/i)
Active	34
Announced**	14
Active + Announced	48

Source: Online Banking Report, 8/00

 **publicly announced or acknowledged to OBR, see Table 4

The summer of 2000 saw a half-dozen launches of Net-only bank brands as banks hurried to get out before the fall “checking account season.” Although we haven’t looked at all the companies in depth, DeepGreenBank had the one of the most interesting products earning our third Best of the Web 2000.

There were also a number of notable developments at existing Net-only banks. Refer to Table 3 for a complete list of all launched Net-only banks and Table 4 for those still in formation

• X.com’s PayPal service launched an important new feature, guaranteed payments to verified merchants; the company also blasted through the 3 million user mark and increased monthly unique users to more than 6 million (see
  Table 2, upper right)
• WingspanBank told customers they could expect to soon be making deposits at any of 24,000 ATMs nationwide
• National Interbank, and yet-to-be launched Juniper Financial announced deposit-taking agreements with Mail Boxes Etc.

Web Traffic

NextCard pulled ahead of X.com in their race to be the most highly trafficked financial services provider. Each have nearly twice as much traffic as the other ten combined. Total traffic increased 12% in July and 24% in June. Only NetBank, eTradeBank, and OneCore showed month-over-month declines in July (see Table 2, upper right).

Table 2

Web Traffic at Net-Only Banks

unique users¹ by month

Bank	July 00	June 00	% Chg	May 00
1.    NextCard	7,610	6,917	10%	4,512
2.    X.com2	6,136	5,282	16%	4,968
3.    CompuBank	984	989	0%	646
4.    NetBank	497	641	(22%)	733
5.    BankDirect	466	168	180%	135
6.    WingspanBank	320	294	9%	285
7.    eTradeBank	261	333	(22%)	349
8.    SFNB	196	n.m.	n.m.	165
9.    FirstIB	179	144	24%	n.m.
10. USABancshares	135	101	34%	198
11. GEFN	101	n.m.	n.m.	n.m.
12. OneCore	86	262	(67%)	187
Total3	16,971	15,131	14%	12,178
% change vs. last mo.	12%	24%	n/a	7.8%

Source: PC Data Online www.pcdataonline.com , 8/29/00

n.m. – not measured, only 12 had enough traffic to be measured by PC Data

¹Unique users as measured by PC Data’s 100,000+ member panel

²Includes PayPal.com

³Includes some duplicate (non-unique) users across different companies

X.com released a clever new bank account verification scheme that replaces snail-mail verification. The company authenticates checking account ownership by sending two small payments of unspecified amounts (less than $1 each) to the users bank accounts. Users wait 2-3 days for the ACH deposits to post at the bank, then log into PayPal and enter the exact amount of each debit. Assuming the numbers match, the user is considered verified and can begin transferring money to and from the bank account via ACH (electronic transfer). To encourage verification, a $10,000 sweeps was launched.

 
 

Table 3

Status Reports on Publicly Launched Net-only Banks (alphabetic order)

Source: Online Banking Report from published reports and interviews, 8/00; Web traffic source: PC Data Online  www.pcdataonline.com  8/00; unique users as measured by PC Data’s 100,000+ member panel

Table 4

Status Reports on Net-only Banks in Formation (alphabetic order)

Source: Online Banking Report from published reports and interviews, 8/00

Web traffic source: PC Data Online  www.pcdataonline.com  8/00; unique users as measured by PC Data’s 100,000+ member panel