By Riley Kaminer
In 1904, Italian-American entrepreneur Amadeo Giannini founded the Bank of Italy to support fellow working-class Italian immigrants in San Francisco. The company played an important role in the community – for instance, it was one of the first banks that offered loans to rebuild businesses after an earthquake and fire in 1906 decimated the city.
In 1930, the Bank of Italy became the Bank of America. Almost a century later, Bank of America is one of the largest financial institutions in the US. And it has lost its consumer focus – having racked up $250 million this year in fines for charging illegal fees and opening fake accounts, on top of paying $750 million in 2014 for its illegally deceptive marketing tactics.
Lionel Carrasco, co-founder and CEO of Leap Financial, is on a mission to build better financial offerings – especially for Hispanic Americans. He and Leap’s co-founder Marcela Henao (Carrasco’s wife) are both immigrants from Latin America. They both had careers in tech – Carrasco as a serial entrepreneur with two successful exits under his belt and Henao as a telecom expert who was on the team that developed Miami’s Network Access Point (NAP) of the Americas. Together, they previously built Leapfactor, which was a local app development shop.
Living in the US, Carrasco and Henao became frustrated by how expensive it was to send money back to their home countries. “We are in the 21st century, yet you spend 10% of your money on remittances,” Carrasco told Refresh Miami. “It should be almost a free service. There is no good reason why it costs this much, except for the complexity of routing money through several banks.”
In 2018, the duo launched Leap with the idea of developing a platform to orchestrate payment systems and rails to best serve specific communities. “In our case, that was Hispanics,” said Carrasco. “And that was a long road.”
Why a long road? “There’s no ‘MVP’ of a bank,” Carrasco asserted. “You need to start with all the capabilities, operations, product controls, and everything else.”
Eventually, this road led them to h.way. “This is a Hispanic bank focused on Hispanos, built by people who know the struggles of our community and understand how we deal with our money,” explained Carrasco, who has lived in Miami for more than two decades.
He noted that most financial institutions are simply not fit for purpose for today’s Hispanic consumer. For instance: while Hispanic Americans are actually more banked than the average American, they typically only use their bank account as a piggy bank – preferring to make daily transactions in cash. The flip side: 60% of Hispanic Americans use check-cashing services, which take a commission.
h.way gets customers through the door with a no-cost service that instantly provides consumers with a debit card. From there, they then offer subscriptions for packages for specific products they need. h.way also makes money every time someone swipes a card. For remittances, h.way only charges a maximum of 2%, additionally providing consumers with 1% cashback directly to their h.way wallet.
Despite only launching publicly in June, Leap has already scaled to 50,000 app installs and 10,000 active bank accounts. “We’re opening about 150 accounts per day,” said Carrasco.
“Our goal is to become the bank of the Hispanic community in the US and their families abroad,” one account at a time.
READ MORE IN REFRESH MIAMI:
- Q&A: Jaclyn Baumgarten on her transition from startup founder to investor
- Félix raises $7.8M to reimagine cross-border payments, starting with sending remittances through WhatsApp
- Q&A: Novo’s Michael Rangel on empowering small businesses to make a positive impact on their local communities
- Triple-A doubles down on Americas through Miami, with Paulo Shargorodsky at the helm
- Flex secures $20M equity and $100M debt fundraise to build a one-stop-shop financial hub for SMBs
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- Risk management platform Enveedo secures $3.15M seed to bring cybersecurity to mid-market customers - December 5, 2023
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