Waleteros.com: Empowering America’s Underbanked Latinos
What: Waleteros.com, a new mobile app that works like a pre-paid debit card with services such as mobile check deposits, direct deposits, peer-to-peer payments, bill payment, cash withdrawal and a platform for online purchases.
Why it Matters: This digital financial solution could be game-changing for Latinos in the United States, who make up a large percentage of the nearly 60 million Americans without a bank account. Waleteros.com is led by Sergio Carrera, former General Manager of Televisa in the United States.
Text written by Gretchen Gardner, member of Portada's editorial team.
Underbanked: While you may not have heard word before, it’s an all-too-common phenomenon in America. According to the FDIC, an “underbanked” household “holds a bank account, but also relies on alternative financial services providers.” This often means no credit card, and a high reliance on inefficient and costly alternatives like
check-cashing stores. But luckily, digital payment platforms and online banking are transforming the way people access and use money, a trend that stands to benefit underbanked communities enormously. In the United States, Latinos make up a large percentage of the nearly 60 million people without a bank account. So could technology change all of this?
There's An App for That
To learn more, we sat down with Sergio Carrera, former general manager for US operations at Editorial Televisa, to get the scoop on his new mobile app, Waleteros.com, which functions like a pre-paid debit card and is set to provide basic financial services to a huge amount of Hispanic Americans.
Here’s how it works: “Waleteros is a mobile app linked to a prepaid MasterCard that aims to empower the millions of underbanked Latinos in the US by offering financial services such as mobile check deposits, direct deposits, peer-to-peer payments, bill payment, cash withdrawal and a platform for online purchases,” Carrera explained.
Users do have to get a physical card – either at one of their 60 distribution points in South Florida, or through a self-registration process available upon downloading the app that prompts the company to send a card in the mail.
Our conversation with Carrera left it clear that one of the biggest priorities for Waleteros is that it help Latinos live comfortably, save and conduct financial transactions, as he repeatedly made reference to the company as an “ultra-transparent financial solution.” He reminded us that according to the FDIC, 50% of Hispanic Americans are considered “underbanked,” which means that there is huge room for growth in the market.
And the Fees?
And Carrera and his team are adamant about keeping the fees to a minimum. “We don’t charge activation, monthly or inactivity fees like most other pre-paid cards do. Receiving a direct deposit from an employee or benefits provider is completely free of charge and we work with a network of 2400 surcharge-free ATMs.” Users can even use the app to find the nearest ATM. And even cashing or depositing a check is free, as long as the user is okay with waiting a few days for the money to be deposited. In urgent cases, a small fee is in place to rush the transaction. The only other fee comes out to US $0.75 to send money to other Waleteros users.
Interestingly, Carrera and his team have also found a way to cater to the uniqueness of the Latino market through their B2B strategy of partnering with merchants and businesses that are in close touch with their target audience. “We reach out to different companies that are servicing the Hispanic community and that will benefit from offering our product to their existing client base,” Carrera said. The Waleteros team is even creating agreements with the significant Hispanic Christian community, “offering a personalized, digital product to Christian churches that are looking for a faster, more convenient and cost-effective way to receive donations.”
Positioned for Growth
Planning to close seed-funding in the second quarter of 2015, so far, Waleteros’s lead investor has been AGP, an angel investment network based in Miami. “For our next round, we will be looking for partners with experience investing in the Financial Technology space,” he says, and in a payment industry that “is undergoing tremendous changes,” they should be well-positioned for growth, as Carreras’ co-founders have worked in both the electronic payment and financial sectors, Carreras himself having worked at Merrill Lynch and served as the CFO at a publishing company. Waleteros expects to have 5,000 active users by the end of the year, a goal that doesn’t seem unfeasible considering the potential impact of its services.