This new generation of startups is aiming to solve many of the banking challenges immigrants encounter

Bankrate | 10 September 2021

The U.S. is not short on offering bank accounts. Thousands of banks, credit unions and fintech companies compete with each other, pedaling checking and savings accounts throughout the country.
And yet, an increasing number of startups are creating new digital banking options designed for communities that they believe have long been underserved by traditional banks. These newer banking apps narrowcast more than popular challenger banks, like Chime and Varo. They include companies building options for the LGBTQ market (Daylight), Black Americans (First Boulevard), newlyweds (Hitched) and musicians (Nerve). Increasingly, they also include bank accounts designed for immigrants and migrants.
Startups like Majority, Stilt, Cheese, Welcome Technology and Re:Start are partnering with financial institutions to offer standard banking features (such as debit cards and mobile banking apps) but with a twist. These accounts support apps in Spanish, Russian and Armenian in addition to providing perks like low-cost international calling services and no-fee money transfers to customers’ home countries to entice consumers to sign up.


“Apps that target those communities are picking up steam,” says Amit Sharma, chief executive officer at FinClusive, a compliance fintech company. “They are providing language support and some of the cultural nuances that more plain vanilla U.S.-centric banking applications don’t have.”
For consumers, the burgeoning fintech sector provides more banking options to better suit their needs and expectations than a one-size-fits-all product.
“Banking is becoming a personalized experience,” says Francisco Javier Alvarez-Evabgelista, a research associate at Aite Group. “These types of products may not necessarily apply to most Americans, but increasingly, you will see… personalized banking opportunities for yourself that may align with the communities you are a part of.”
Why these startups are building bank accounts for immigrants, migrants
Magnus Larsson, who is based in Sweden, recalls the financial mysteries he experienced when he lived in the U.S. — including figuring out the differences between bank account types.
“I needed someone to translate that for me,” Larsson says.
So he decided to do something about it and created Majority, a challenger bank built for migrants that rolled out to all 50 states in June.
For a monthly membership fee of $5, Majority offers an account with features like:
● No minimum balance requirements● An app in both Spanish and English (and advisors who speak Spanish)● Free unlimited remittances to countries including Nigeria and Ghana● Free international calling to more than 25 countries — an important perk for people around the world without a strong internet connection.● As he sees it, Majority bundles services that are designed to solve the hurdles consumers are up against when they move to a new country.
We wanted to build a company that makes people thrive and succeed faster. — Magnus Larsson, CEO of Majority
PODERcard, part of Los Angeles-based startup Welcome Technologies, is another startup with a similar ambition. Among its offerings targeting the Latino market include a no-monthly fee digital bank account that defaults to Spanish.
“Some will say a bank is a bank is a bank,” says Amir Hemmat, co-founder and CEO of Welcome Technologies, which targets the Latino market with digital banking and other resources, such as enrolling in English classes or finding a dentist. But he’d argue the opposite at a time when more companies like his are rebuilding banking products for specific communities.
While someone could sign up for a bank account anywhere, Hemmat says, Welcome Tech’s PODERcard account is meant to be a better experience. Callers, for example, are greeted in Spanish when dialing the call center unlike the experience they have when they call many other customer service phone lines.
“Imagine being a customer who’s always being told to press 2 to get the service they are looking for,” Hemmat says.
It’s not just Spanish-speaking consumers the fintech startups are pursuing. In July, startup Restart announced its partnership with USAlliance Federal Credit Union to offer a mobile banking app that supports Russian-speaking customers. Now, the fintech startup also supports Ukrainian and Armenian, and soon, Polish. By communicating in someone’s native language, Restart is betting its mobile banking app can resonate better with pockets of the population than a typical bank account.
“So many things about U.S. banking are obvious to Americans but not obvious to foreigners,” says Carl Thong, a co-founder of Restart, citing credit scores or physical checks as two examples.
In pursuit of financial inclusion
The idea behind these disruptors is to not only win over those who are new to the country, but to win over those who moved to the U.S. years ago but still rely on cash, making up part of the six percent of U.S. adults who lack a bank account, according to a 2019 report by the Federal Reserve.
True, the number of people without a bank account has diminished over years, but not everyone wants a bank account. Some, for example, opt out because they don’t trust the system. But many without bank accounts are more likely to have low income. Without an account, they end up paying more for basic financial services, such as when cashing a physical paycheck or paying a bill, which interferes with building wealth.
It’s the world’s largest market and millions of people still don’t have bank accounts. — Carl Thong, Co-Founder of Restart
It’s gaps like these in the U.S. that are motivating startups to create banking experiences that could win over a big market.
According to the Pew Research Center, there are more than 40 million people living in the U.S. who were born in another country, making the U.S. home to more immigrants than any other country. More so, immigrants and their descendants are projected to account for 88 percent of U.S. population growth through 2065, Pew Research’s estimates.
For startups, it’s still a daunting pursuit. While fintech is flush with capital, it’s not easy to convince somebody to sign up for a bank account, let alone someone who may be used to paying for things in cash. It also requires proving someone’s identity that complies with customer identity rules banks must abide by, which can even cause slowdowns for someone who recently moved to a new state but grew up in the country.
Yet, if there is a good time to go against the odds, it might be now. It’s easier than ever to launch a digital bank account now and more people are comfortable with digital banking. The coronavirus pandemic prompted a larger group of people worldwide to try digital banking when their local branches or Western Union offices were closed or operating at limited capacity.
Time will tell whether these new bank accounts will earn the trust of consumers. But for now, their emergence shines a spotlight on a new direction for an old industry.
Majority’s Larsson says: “The digitalization of banking is not going to be one big bank for the rest of the world.”

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