Last week saw migrant-focused digital wallet Rewire acquire migrant-focused prepaid card company Imagen, bringing attention to a growing financial services sector. Here, we analyse some of the main payments and banking solutions catering to the needs of migrants.
Offering additional products to customers is hoped to drive two key metrics, revenue per customer and retention. But the less financially connected the potential customer is, the harder it is to understand what financial products should be offered to them and reach product market fit.
Lowering potential barriers to entry for financial services is one of the focuses across these payment products. Many came with no monthly or annual fees for their standard accounts, with the exception of Majority, which costs $5 a month. Some digital banking apps – such as Suits Me, Wirex and Monese – offer different tiers of services across their card products with different prices. Benefits include lower international ATM withdrawal and cash top-up fees.
A major challenge for immigrants is requiring a credit history within the country before they can apply for banking products. Several solutions make the application process easier: Zolve, for example, does not require a social security number to sign up for its credit card product. Meanwhile, Monese offers its Credit Builder product that allows migrants to save while building their credit score, with no credit check required. However, looking at the mix of products above, it’s clear that debit (i.e., “lite” bank accounts) remains the focus over credit when it comes to cards.
Aside from digital wallets, several solutions offered specialised remittance services, but they differed significantly in the number of send countries. Remitly users, for example, can send money to over 100 countries via their Passbook banking app, while users of Rewire can send to just 13 countries.
Finally, Western Union has been the latest major player to enter this space with its banking products in Europe. However, the big difference is that Western Union can leverage an actual banking license, allowing it more flexibility in the products it can roll out.