Nubank reaches out to Brazil’s underbanked with digital banking accounts
Fun with flags
Brazilian fintech Nubank will soon be offering digital banking accounts in addition to its credit card business, writes David Penn at Finovate (Banking Technology‘s sister company). The move will provide access to billpay, account-to-account transfers, and the ability to earn more in interest than is available with a regular savings account.
“Our real revolution begins today,” says Nubank’s founder and CEO, David Velez. “Now we are offering services to 100% of Brazilians.”
ZDNet reports that the new solution, NuConta, is currently in beta and is expected to be rolled out to Nubank’s current 2.5 million credit card customers once beta testing is complete. The company hopes to make the accounts available to everyone “from the first quarter of 2018”.
The decision helps Nubank bring banking services to the large population of underbanked consumers in Brazil – as many as 60 million without bank accounts. It also could enable the company to narrow the gap between the number of individuals who have applied for Nubank credit cards since the company launched and the 2.5 million who have actually signed on.
The NuConta accounts will require neither maintenance fees nor credit checks, and deposits will be tied to interest-bearing government securities. Debit cards and the ability to withdraw cash will not be offered initially, but could be added based on customer demand, according to Velez. NuConta accounts will also be mobile-centric, the company said, taking advantage of Brazil’s high rate of mobile internet and smartphone use.
Nubank was founded in 2013 and is headquartered in Sao Paolo, Brazil. In August this year, Nubank raised $139 million in debt financing from Fortress Investment Group and Goldman Sachs. The company’s last equity round of funding was last December, when Moscow-based venture capital firm DST Global led Nubank’s $80 million Series D.
