Varo Money enters final stage of becoming nationwide bank
Varo Money is in final stages of becoming a US-wide bank
US-based mobile banking firm Varo Money has gained approval from the Federal Deposit Insurance Corporation (FDIC) for deposit insurance, reaching a significant milestone in its pursuit of a national bank charter.
“Receiving an official bank charter has been part of Varo’s vision from the very beginning, and we are excited to progress through the necessary steps to accomplishing that goal,” states Colin Walsh, CEO of Varo Money.
Varo launched in mid-2017 and received a preliminary approval from the Office of the Comptroller of the Currency (OCC) a year later. Now with the FDIC insurance, the company moves the charter process to the next and final step of the approval process. It says it is on track to obtain the national bank charter, which will enable it to expand to other types of services, such as credit cards, lending and various savings products.
At present, Varo’s bank account services provided by The Bancorp Bank.
“Becoming a fully chartered bank will give us greater opportunity to deliver products and services that positively impact the lives of everyday people around the country,” Walsh says, noting that only 29% of Americans are considered financially healthy. “Varo is committed to creating inclusive financial opportunities that deliver measurable benefits to all consumers.”
Among Varo’s features to help improve financial health is the ability to get paid up to two days early with direct deposit and to go overdrawn up to $50 with no fees. Varo also offers fee-free ATM withdrawals with its network of more than 55,000 Allpoint ATMs worldwide.
On the savings side, Varo claims to have one of the highest annual percentage yields (APYs) on the market and its “Save Your Change” programme, which automatically rounds up purchases to the nearest dollar and deposits that money directly into a personal savings account.
“We should not underestimate how significant this is for the banking industry as it’s the first time a mobile-centric company is poised to be a chartered bank in the US,” comments Jo Ann Barefoot, ex-deputy comptroller of the OCC and now CEO of Barefoot Innovation Group.
For its technology, Varo opted for Temenos’ T24 Transact core banking system, delivered on a cloud basis.
