The news: Varo Bank made its fee-free cash deposit program at more than 2,000 Kroger stores permanent, eliminating the standard $4.95 fee Green Dot Network typically charges for converting cash into digital balances, per Fintech Finance News.

The expansion follows a July 2026 pilot that Varo says drove new customers to Kroger to add cash to their accounts. Customers generate a barcode in the Varo app, and a cashier scans it to add cash to customers’ accounts instantly at checkout. The retail locations offering fee-free cash deposits for Varo customers now total over 90,000 Kroger and CVS locations, per Varo.

Zooming out: Most digital banks route cash deposits through the same Green Dot Network and pass the fee to customers. 

• SoFi charges $4.95 per cash deposit, paid at the point of sale. 
• Revolut charges 2.5% of the deposit amount, capped at $500 per transaction. 

But Chime’s policy is comparable to Varo’s. It says that retailer partners may charge a fee for cash deposits but that the service is free at Walgreens or Duane Reade stores.

Why it matters: The digital-only-banking norm looks out of step with how younger consumers pay. Gen Zers and millennials are more likely than older generations to use cash as their most frequent payment method: 12% of younger respondents named cash their top choice, compared with under 9% of Gen X and boomer respondents, per a U.S. News survey.

And cash-friendliness persists as digital banks fight for Gen Z’s primary banking relationship. The share of Gen Zers naming a neobank as their primary bank nearly doubled from 8.9% in October 2024 to 17.2% in October 2025, per EMARKETER survey data. Online banks and fintechs captured 28% of newly opened primary checking accounts among millennials and Gen Zers last year despite holding just 20% of existing primary relationships in that age group, per J.D. Power. 

Implications for banks: Most digital-only banks have made it costly for some customers to deposit their own money, turning a basic banking function into a potential customer retention problem. Consumers who regularly handle cash have little incentive to pay deposit fees when traditional banks offer the service for free. Varo’s fee waiver removes one reason for customers to turn to traditional banks while giving it a competitive advantage over digital rivals like SoFi and Revolut.

But eliminating fees alone won’t secure primary banking relationships. Varo already ties with Chime and edges out Chase in Gen Z customer satisfaction, though it trails OnePay and SoFi, per J.D. Power. Making cash deposits free addresses one source of friction, but digital banks still need to compete on the broader banking experience and customer satisfaction to win and retain younger customers.

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