Fintech companies are offering Latinos a way to get debit cards they otherwise couldn’t get to conduct cashless transactions.
COLORADO, United States — Latino households are less likely than non-Hispanic whites to use the banking system, and some financial technology (fintech) companies want to change that by helping unbanked Latinos get debit cards so they can transact cashless.
the the first two the reasons for unbanked households not having bank accounts were not having enough money to meet minimum balance requirements and distrust of banks.
According to Axiosbanks have always charged people of color higher fees, made it harder for them to access business loans, or granted them more expensive mortgages. Not having access to banks can also make it harder for Latinos to access car leases, high-yield savings, and build good credit scores.
To help Latinos get debit cards that allow them to make cashless transactions, some fintech companies offer mobile apps that do not require a social security number and accept an Individual Tax Identification Number (ITIN) or a Mexican Matrícula card.
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New fintech options designed specifically for Latino and Hispanic immigrants include bilingual digital wallets or apps, PODER card and B9which Axios says offer linked prepaid debit cards that can be used in stores and ATMs, with no commissions or minimum amounts.
“There is this myth that the migrant and Latino community only wants to do cash transactions, but it only happened because there was no other option,” said Raúl Lomelí-Azoubel , co-founder of SaberesPoder (SEP). Axios. “We know this community wants to save, invest and they need these financial solutions.”
In the past, Latinos have used fintech products like PayPal’s Remitly and Xoom to send money from the United States to Latin America and the Caribbean instead of banks, according to Axios.
NBC News said people without bank accounts can take a toll on their wallets through check cashing, cashier’s check fees or high-interest payday loans.
The cost of cashing a check can vary between 1% and 12% of the value of the check; cashier’s checks cost between $10 and $15 and those who use payday loans end up paying over 300% interest, according to NBC News.
Axios says Latinos, especially people in the country without proper papers, are more dependent on predatory services like payday loansthat have very high interest rates, or cashing checks or money orders with high fees.
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