Even with the numerous transformations in the banking system, around two thirds of the population still have difficulties when negotiating services and acquiring credit. In this regard, the Brazilian startup alt.bank has gained popularity by advocating for the inclusion of these users. The initiative resulted in the contribution of US$ 5.5 million (approximately R$ 27 million) from a foreign investment fund.

Launched in 2019, the Brazilian alt.bank offers the opening of digital accounts with no fees or annual fees, as well as the contracting of digital cards. Through a system called “Financial Justice”, the company promises to make life easier for defaulters by allowing the opening of accounts for people who have a negative CPF. Like other digital banks, the platform does not have branches and has an Android application to assist users.

In addition, the platform has a benefits club that offers discounts on the purchase of medicines in pharmacies and a partnership with the platform medical consultations Dr. Consultation, offering discounts on scheduling private consultations for users. According to alt.bank, since its launch, around one million Brazilians have downloaded its app.

Growth with foreign support

The visibility and rapid growth resulted in a million-dollar investment in the company last month. The investment fund Union Square Ventures, one of the venture capital firms responsible for supporting the growth of initiatives such as the Stripe payment platform, in addition to giants like Twitter on Kickstarter when they were still starting out, decided to invest US$5,5 million in Brazilians.

In a statement, Union Square Ventures partner John Buttrick explained that the investment is the fund's first in a Latin American company and that the biggest attraction was the business opportunity with an impact on social development for more than 100 million Brazilians.

Social appeal

Although it has yielded a huge investment for alt.bank, offering accounts and benefits to people with bad credit ratings is not exactly exclusive to the fintech. The truth is that there is no law or regulation that prohibits the opening of bank accounts for people in debt.

Since this is a commercial relationship, the National Monetary Council (CMN), through resolution no. 2.025, only determines that banking institutions are free to decide whether to keep defaulting customers in their portfolio or not. What many banks do is impose certain restrictions on these customers, such as credit limitations, rate adjustments and service limitations. Thus, many fintechs have found these limitations to be an opportunity to attract customers. Digital banks such as Nubank and Original, as well as traditional institutions such as Banco do Brasil, Itaú, Santander and Caixa Econômica also offer account opening for those in debt.

User Bonus

In practice, what sets one digital bank apart from another is the services it offers. Some offer discounts on credit card installments, others offer different investment options, etc. In the case of alt.bank, the focus is on the user invitation system. Similar to what we see in cashback on payment platforms like PicPay, for example, the Fintech offers a bonus to customers every time they refer a new user.

According to the company, when you invite someone to open a yellow account, you start receiving commissions every time they use the card. Alt.bank, however, does not make it very clear what the percentage and recurrence of these bonuses are. According to the company, the investment received by Union Square Ventures will be used to expand services, resulting in the creation of the first credit products and expansion of operations in Brazil.

Through which channels you reach those people, classic and out of the box. Tech Crunch