Nick Holland makes a bold proclamation that checking account primacy is dead in his recent article, “How to Build Customer Relationships When Checking Accounts No Longer Confer Primacy.” Clearly a provocative statement. And like most provocative statements in banking, it’s partly true… and partly missing a much bigger point. If you’ve read my previous articles on payments and the impact on reaching future younger customers, you already know where I stand. The checking account was never the true franchise for banks. Payments are. If community banks don’t recognize that … and act accordingly, we will not just lose “primacy” but will lose relevance. Holland cites data showing that 69% of customers now hold deposit accounts at multiple institutions. Direct deposit may land in one bank. Debit card transactions happen at another. Savings sit in a high yield fintech. P2P flows through some other fintech app. On the surface, that sounds like fragmentation. Soft churn. Relationship erosion. But look closer. What’s actually fragmenting is the deposit container. What’s consolidating is daily financial behavior, centered around which channel owns payments. As Bhavna Kaushal notes in the article, “Their [younger customers] daily financial hub, for the most part, is through payments.” Exactly so. I have been saying this for years: payments are the only true franchise banks have. You can outsource your core. You can white label a digital platform. You can rent cloud technology. But payments? More importantly, settlement? Access to the rails? That is the pot at the end of the rainbow. If you own the moment when money moves, you earn the right to everything else: deposits, loans, wealth management, and if you play the customer experience game correctly – primacy. Holland highlights that customers are quietly spreading funds across institutions, often without closing old accounts. That’s soft churn. But here’s what I would add: customers move deposits toward where payments are easiest. Think of this checklist: If your debit card experience is clunky… If your P2P options are limited… If FedNow or RTP isn’t available… If your mobile app makes bill pay feel like a 2009 experience… Then you need to re-evaluate your strategic focus. Deposits follow the path of least friction. This aligns directly with what I’ve written about neobanks. In my article “Trouble Ahead for Neobanks?”, I acknowledged that while many neobanks will fade away, while they exist, they consistently outperform community banks in both user experience and marketing. They win the payment “moment or truth” by removing friction. Furthermore, when they win the payment moment, they gain the behavioral habit. We consistently return to the processes that make our tasks easier, sometimes even more enjoyable! Behavior beats loyalty every time. Let’s be clear, Gen Z does not wake up in the morning thinking about their primary checking account. They think: Can I Venmo this? Are my favorite payment options set up in my Apple Wallet? Why can’t this transfer be instant? Why can’t I see everything in one place? They define their primary bank as the one tied to their digital experience, not the one with the nicest or numerous branches. The Financial Brand article makes clear that younger customers are especially motivated by life events and digital convenience. This is no surprise. What is surprising is how many community banks still treat digital payments as an ancillary issue rather than a core strategy. If you want to attract and keep younger customers, you must: Offer real-time payments (Receive AND Send) Integrate P2P seamlessly Provide card controls that are intuitive Enable instant account funding Deliver proactive alerts that feel smart and paternalistically on target. And above all, you must make the payment experience something that will “thrill and delight” customers. Make an eyebrow raise, perhaps even an audible “oh, this is unexpectedly nice …” Because for a 24-year-old entrepreneur, your branch hours may be irrelevant, but your ACH cutoff time or ability to execute a real-time payment might not be. AI Is Not the Strategy. Payments + AI Is. The article rightly points out that AI can free up staff to deepen relationships. I agree, but here’s where we need clarity. AI without a payment’s strategy might just be lipstick on a pig. If your core payment experience is weak, adding in AI will not strengthen it or make the experience delightful. However, when you combine: Seamless payment rails Intelligent alerts Context-aware next-best-product suggestions Smart fraud mitigation Proactive financial wellness nudges And while we are at it, throw in some engagement elements to make financial wellness fun You then demonstrate to all current and future customers that you are strategically mastering the payment moments of truth and are focused on paternalistically driven financial wellness. For starters, let’s stop focusing on “checking” accounts. (I need to write a whole feature article on the term checking account. Checks are no longer an integral part of a banking experience, and we need to rethink how we brand our strategic franchise services.) Think of it more like a hub. A personal financial hub. Not just enabling payments but providing wisdom on how and when payments are made that lead to overall financial wellness If you achieve that type of hub, that is where primacy will live in 2026 and beyond. Holland closes by highlighting community banks’ local trust advantage. That’s absolutely true. However, trust alone does not win the daily transaction. Let me be straightforward. If your digital payment experience is inferior to: Apple Card Chime CashApp PayPal The virtual branch of any top 10 U.S. bank Then your advantage of local trust becomes a secondary factor. Trust will get you considered. A great payments experience will get you chosen. The good news is community banks don’t need million-dollar technology budgets to effectively compete. We do need: A clear strategic commitment that payments are the franchise. Budget allocation that treats the virtual branch as the primary branch. Relentless testing and improvement of our own digital experience. Compelling storytelling about how we help customers succeed financially. A willingness to partner intelligently when it advances customer experience. Ultimately achieve a financial wellness / payments hub that is integrated into the day-by-day, minute-by-minute experience of the customer. As I’ve said before, banks would never operate a physical branch using the “what’s the cheapest we can get this for?” philosophy. So, the same should apply with your digital payments / virtual branch budget. Jim Perry is quoted in the article saying the real question is not whether we are primary — but for which moments we will be primary, and for how long. But let’s take this one step further. If you win enough payment moments, you don’t have to ask about primacy. You will be the primary. Community banks must intentionally choose: Will we own the paycheck moment? (You may think this means the service called direct deposit, but the future of paychecks is more likely daily earned wage, probably paid hourly) Will we own the merchant spend moment? (Most community banks have long abandoned offering merchant services and fintechs now own this space) Will we own the P2P moment? (I know some of you spent money early on core-offered P2P and were burned, but it’s how younger customers now pay for everything and to everybody) Will we own the small business cash flow moment? (Most SMBs want to work with community banks … do you have the tools to help their business go and grow?) Will we own the instant funding moment? (FedNow and RTP are here and Stablecoins / Tokenized Deposits are fast on their heels) Deposit account primacy may be fading as a metric, but payments primacy is just getting started. If you are a community bank executive reading this, I would urge you to: Put payments at the center of your next strategic planning session. Map your current payment capabilities (and the related customer experience) against what younger customers expect. Identify gaps. Have a roadmap to close those gaps as soon as a newly revised budget will allow. The institutions that dominate everyday financial behavior will earn the right to deeper relationships. And those that don’t? They’ll be wondering why deposits quietly drifted elsewhere. Not tomorrow, but in the coming years, accelerating each year that passes. As always, if you want to talk strategy, payments, or how to reposition your institution to win the next generation of customers, I am available as a resource for FNBB customers. Ping me at dpeterson@bankers-bank.com and let’s start a conversation. Let’s work collaboratively to make sure community banks don’t just survive this shift. Let’s make sure we lead it. Resources https://thefinancialbrand.com/news/checking-accounts/build-relationships-checking-no-longer-promises-primacy-195883 Authors Note: ChatGPT was used to provide research in support of this article.