Seattle-based remittance startup Remitly is expanding beyond money transfers to a full suite of banking products for new arrivals to the U.S. The company this week launched Passbook, a bank account for immigrants that relies on foreign identity documents to help customers open accounts.
“Where we have differentiation is being able to provide the trust of having [bank accounts and remittances] together,” said John Scrofano, director of new initiatives at Remitly. “A bank is a great platform to push a deeper relationship with a customer and provide them with more value.”
With Passbook, Remitly allows newcomers to the U.S. to set up bank accounts without Social Security numbers. The product serves as a means to expand the company’s reach and create deeper relationships with existing customers.
Passbook’s offerings mirror those of banking startups like Chime and N26. Customers receive a Visa debit card they can lock and unlock through the Remitly app, and may personalize the card by adding a small emblem of a national flag to the bottom left corner.
There is no subscription fee for Passbook; Remitly generates revenue through interchange fees. Although customers can’t send money internationally from Passbook yet, Scrofano said the company plans to launch that feature in the future. For now, customers must use a separate app to carry out remittance transactions. Passbook customers get $2 cash back in their bank accounts each time they use the company’s cross-border money transfer services.
To sign up for Passbook, customers can use their Taxpayer Identification Number, passport and other foreign government-issued forms of identification. Scrofano said Remitly uses the same know-your-customer technology for Passbook that it uses for remittances.
See also: Remitly secures $220m to add services beyond remittances
Founded in 2011, Remitly allows customers to send money from their smartphone from 16 countries to recipients in more than 45 countries around the world, and claims to transfer more than $6 billion annually. It is partnering with the St. Paul, Minn.-based Sunrise Banks on the Passbook product.
Remitly launched the account after receiving feedback from customers who had difficulties setting up bank accounts.
“Even if you get a bank account, it might not meet the needs that you have, specifically as an immigrant,” said Matt Oppenheimer, CEO and co-founder of Remitly, in a July interview with Bank Innovation after the company raised $220 million.
Scrofano didn’t specify which products the company plans to launch, but said they will address issues customers have identified, such as insurance, investing, personal finance management and lending.
While Scrofano acknowledged that Passbook puts Remitly in the “challenger bank” category, he said what sets it apart is its tailored offerings.
“Our primary competition in this area is people not being banked, being underbanked, or people banking with one of the major banks,” Scrofano said.
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