The U.S. is not short on offering bank accounts. Thousands of banks, credit unions and fintech companies compete with each other, offering checking and savings accounts throughout the country.
And yet, an increasing number of fintechs are now offering digital banking options to communities they believe have long been underserved by traditional banks. Their target consumers are smaller groups than those targeted by mainstream challenger banks like Chime and Varo. Their offerings include banking services for the LGBTQ+ market, people of color, couples and musicians. These days, they also include bank accounts designed for immigrants and migrants.
Fintechs such as Majority, Stilt, Cheese, Welcome Technology and Re:start partner with banks and credit unions to offer standard banking features (such as bank accounts, debit cards and mobile banking apps) but with a twist. These companies offer apps in languages such as Spanish, Russian, Ukrainian and Polish. In addition, some provide perks like low-cost international calling services and no-fee money transfers to customers’ home countries.
“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, advisor, retail banking & payments 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 2021.
For a monthly membership fee of $5.99, 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 Larsson 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 LarssonCEO of Majority
PODERcard, part of Los Angeles-based Welcome Technologies, offers digital banking and other resources to the Latino market. Customers can open 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. In addition to digital banking, the company’s offerings to the Latino market include English classes or help finding a dentist. But he’d argue the opposite at a time when more companies like his are building banking products for specific communities.
While someone could sign up for a bank account anywhere, Hemmat says, the 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 fintechs are pursuing. Re:start, which defines itself as a “social impact banking app,” can be viewed in the languages of English, Russian, Polish, Ukrainian, Armenian, Czech, Belarusian and Persian. Customers can open a checking account that’s provided by USAlliance Federal Credit Union, which is a member of the National Credit Union Administration.
By communicating in someone’s native language, Re:start is betting its mobile banking app can resonate better with certain 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 Re:start, 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 2022 report by the Federal Reserve.
Consumers who don’t have bank accounts are more likely to have low income. Without an account, they end up paying more for financial services, such as check cashing or bill payment.
It’s the world’s largest market and millions of people still don’t have bank accounts.
— Carl ThongCo-Founder of Re:start
It’s gaps like these in the U.S. that are motivating various fintechs to create banking experiences that could win over a big market.
There are more than 45 million people living in the United States who were born in another country, according to the latest Census estimates. As such, around 13.6 percent of the country’s population is made up of immigrants, based on Census data.
For startups, it’s still a daunting pursuit. While fintech is flush with capital, it’s not always 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 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. More people are comfortable with digital banking since the COVID-19 pandemic, a time when many consumers turned to online banking after local branches were closed or operating at limited capacity.
Majority’s Larsson says: “The digitalization of banking is not going to be one big bank for the rest of the world.”
Banking for undocumented immigrants and migrants
Required documents for opening a bank account can vary among banks. While some banks require a Social Security Number, others accept alternative forms of identification — such as an Individual Taxpayer Identification Number (ITIN). An ITIN can be obtained from the Internal Revenue Service (IRS) by people who aren’t eligible for a Social Security Number.
As an undocumented immigrant or migrant, you’ll likely be required by the bank to provide:
Name and date of birth: For this requirement, you may need one or more of the following: Government-issued driver’s license (including ones issued in foreign countries), birth certificate, current passport, consular ID card
Proof of address: A driver’s license or other government-issued ID, a utility bill or a lease
Identification number: A Social Security Card, ITIN or Alien Registration Number
Some banks require undocumented immigrants and migrants to open accounts in person at a branch, rather than online.
The benefits of having a bank account can include having a safe place to keep your money and earn some interest, as well as a place to establish a financial history.
— Mary Wisniewski wrote a previous version of this story.