Podcast June 10, 2020

Immigrating to the US is hard, banking shouldn’t be

In the US, it’s hard to top the pilgrims for a national identity story.

It’s an enduring symbol of a country worth struggling to live in.

But those struggles never really went away — they just modernized.

And modern problems require modern solutions, which Joaquín Ayuso de Paul, GM at Rayo, and his team are providing with their global bank account. 

He came on the show today to explain the significant financial hurdles immigrants face and why modern fintechs are better equipped to solve them than legacy banks. 

What we talked about:

  • The financial pain points immigrants navigate
  • How Rayo is helping US immigrants solve them
  • How to find the perfect partner and provide value to a niche audience

A financial Catch-22

Joaquín and his team at Rayo know exactly how difficult it can be financially to immigrate to the US. 

They’ve done it themselves. And their mission is to make it easier for others who have to deal with the pain points of immigration.

And it’s not a question of the costs associated with uprooting your life to begin again internationally. It’s not travel expenses or immigration fees. 

It’s access to banking.

There is a quagmire many immigrants run into. In order to secure a place to live and cell phone service, they need a bank account. But for most legacy banking services in the US, you need an address and a phone number to open an account. 

This makes it really hard for immigrants to get these necessities in place before they make what is often one of the biggest changes they’ll ever make. And they end up starting their new life in a new country from a place of uncertainty.

Rayo Episode Quote

Of course, there is also friction in numerous other areas that immigrants face that natives might not even be aware of. 

Immigration is a notoriously difficult bureaucracy to deal with — especially when you’re new to the US legal system. Even then, without a lawyer, how many of those born and raised here can navigate it without tons of frustration?

Immigrants also have financial concerns most natives don’t have to deal with. These are things like being able to regularly receive or send money abroad and international phone plans. 

These services can easily get very costly without help navigating them.

How Rayo is helping immigrants

Regular banks usually look at these issues as edge cases and, therefore, not a priority. For Rayo, finding solutions to these problems is their primary mission. 

Their flagship product is a fully-digital international bank, which already starts making everything much simpler for people before the emigrate from their native country.

By offering an account to immigrants, they can plan things like housing ahead of time, which considerably lowers the stress of arrival. 

“Our vision is to solve the problem of financial inclusion for immigrants in the US.” 

To fulfill their mission, Rayo also offers a suite of other products to ease the transition. 

When it comes to international payments, Rayo has it covered. Leveraging overseas remittance partners, they’ve made payments much easier than more traditional alternatives like international money orders many immigrants rely on.

They also offer solutions which are not financial products. 

To help with the often exorbitant fees associated with international calling, Rayo offers immigrants moving into the US a SIM card with a data plan to help keep costs down.

And when it comes to the bureaucratic issues, Rayo has even partnered with an immigration law firm to give free consultations and hefty discounts to its customers. 

Finding the right partners for the job

The many partners Rayo have enlisted to help them accomplish their vision has been a challenge in itself. 

Their team is only 7 people, most of whom are immigrants or foreigners to the US, themselves. 

So, of course, they understand and care deeply about the issues immigrants face. The difficulty comes in finding partners who are equally concerned. 

Rayo episode quote 2

Despite the challenge, they have managed to find partners in several areas who have experience serving their target audience, understand their value proposition and, ultimately share their vision. 

And this is an important qualification for anyone Rayo does business with. Not just because of the need for shared values — though, that’s obviously very important — but also because Rayo is a relatively young company, so partnering with a company who has to learn alongside them may just introduce more complications than solutions. 

We’ve already covered their overseas partners handling remittances, but they have also formed alliances to provide the cards themselves.

For Joaquín, who has worked with legacy banks as well as this partner — a smaller partner bank accustomed to working with other Fintechs — the differences are clear. 

While some things are the same, like the hurdles of compliance, the speed with which Rayo went from shaking hands with the partner bank to integrating and testing is something they could never hope to achieve with larger partners. 

And despite the smaller size, this partner bank is has scaled to large audiences before and Joaquín is confident they will be able to scale with Rayo, too. 

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Until next time!


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