The growing market of banking immigrants in the U.S.
There’s a growing amount of activity to bank and service immigrant and migrant customers. There are 44 million immigrants in the US and globally, this population represents some $1.3 trillion in wages and $900 billion in spending power annually. But this market is still widely underserved.
It’s generally hard for someone new to a country to open a bank account. Rules can be arcane and technical, while language can also be an issue. There are frequently problems around identification — like what form of government-issued IDs are acceptable to open an account — and residency requirements — like history of utility bills, for example.
There’s an opportunity to connect a big chunk of people to the financial system. All kinds of research show the wealth effects of having access to modern financial products and services.
New fintech startups see an opportunity to do well by doing good. They’re working to build big companies servicing immigrant and migrant communities that need everything from a core bank account to money transfer services.
Tearsheet thought it was a good time to look at who’s doing what in the U.S. when it comes to banking immigrants.
Passbook by Remitly: Money transfer firm Remitly recently launched Passbook, a banking product that targets immigrants. Users can sign up for a bank account and a Visa debit card with no foreign transaction fees — without having to provide a Social Security number. Passbook users will also be able to use Remitly’s remittance service at preferred pricing terms. Remitly has raised over $420 million to build out international money transfer services for immigrant populations.
Transferwise: The leading international money transfer firm has built a business off of helping people move money across borders quickly and cheaply. Transferwise users in the US now have access to a debit card for their Borderless accounts, which enables them to store, send, and receive foreign funds — much like a bank account. The fintech firm is also increasingly working with banks to provide similar functionality to their clients.
Nova Credit: Nova Credit ports over international credit history to help new immigrants access the US financial system. The company recently scored a partnership with American Express to provide expats and immigrants in the US with translations of their foreign credit scores to US standards.
Petal: Petal is one of the few credit cards that doesn’t require a credit score for new applicants. It uses algorithms that look at alternative data to establish creditworthiness. The card is fee-free and helps holders build up their credit scores over time.
Credit Stacks: The Credit Stacks Mastercard is designed for expats moving the U.S. People new to life in the States can apply for a card 60 days before they arrive, so the card is waiting for them. The card also helps them establish and build a credit history in the U.S.
Majority: Majority is a recently-launched challenger bank for migrants. It offers an FDIC-backed account with a Visa debit card. Account holders get money transfers and international calls for free. The company charges $5 per month for membership.
Deserve: Deserve‘s growth trajectory began when it carved out a niche providing credit cards to foreign students. The company has expanded its product suite, including providing credit cards as a service. Its EDU product, which is designed for students, offers Amazon Prime Student free for a year and a $0 annual fee. No social security number is required to apply.