ARLINGTON, Va.–Latinos without traditional bank or credit union accounts are increasingly signing up with various fintechs for the financial needs, according to one new analysis.
In particulars, the fintechs are offering ways for Latinos who can’t get debit cards to make cashless transactions, Axios reported.
“Latinos are among the most unbanked (no account in the household) and underbanked (an account, but no access to services like loans) population groups in the U.S., government data shows,” Axios reported. “Driving the news: Many Latinos say they distrust banks or lack the minimum balance to keep an account open.”
One reason for Latinos’ dislike of traditional banks, Axios stated, is that banks have historically charged people of color higher fees, made it harder for them to access business loans or given them higher-cost mortgages.
‘More Difficult’
“It is more difficult for Latinos without bank accounts to access car leases or high-yield savings and to gain financial literacy and develop good credit scores,” according to the Axios analysis. “It also leaves Latinos — particularly undocumented people — more dependent on predatory services like payday loans…or check-cashing or money order services, which have high fees.”
According to Axios, in place of traditional FIs Latinos have for years been adopting fintech products like Remitly or PayPal’s Xoom for sending remittances. In addition, newer offerings specifically for Latinos and Hispanic immigrants include bilingual digital wallets like PODERcard or B9, which are apps with linked prepaid debit cards that can be used in stores and ATMs, with no fees nor minimum amounts.
The report noted that PODERcard is also working on a credit card system and telemedicine and prescription discounts offerings co-founder Raúl Lomelí-Azoubel told Axios Latino. Moreover, reported Axios, some companies translate credit histories from other countries that could help people not start off with a blank slate.
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