[HN Gopher] Launch HN: Pana (YC S22) - Social Trust Banking with...
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Launch HN: Pana (YC S22) - Social Trust Banking with a US Latino
Focus
Hey HN! We are Piero and Luis, co-founders at Pana
(https://joinpana.com), a banking app that uses social trust to
help people save money and access healthier and better financial
products. We're open to everyone, but are focusing on the 62M
Latinos in the USA, a particularly under-served market that we know
a lot about. US Hispanics have largely been ignored by traditional
banks [1], resulting in 5% of this population being unbanked and an
additional 13% underbanked. This is mainly due to cultural
differences and lack of trust, as well as in-person and Social
Security Number requirements that exclude a significant number of
people. Why is this market under-served? In Latino communities, a
lot of transactions take place within family and personal networks
based on trust. But this trust network isn't connected to the
standard banking system, and therefore they don't get access to the
financial products they should, if their creditworthiness were
evaluated properly. In addition to remittances, Latinos commonly
lend amongst each other. Lending circles are an example of trust
and credit-worthiness currently outside the formal financial
system, and are common among US Hispanics (e.g. [2]). We're
working on a new "social banking" concept that is designed to be a
better fit for the trust-based behaviors that are common and
familiar to this community. Of course, everyone is welcome! But we
believe that social banking is especially applicable to the US
Latino market, so we're focusing there for now. It's worth adding
that a proper evaluation of trust-based payment behavior should
help us lend to people who are currently being abused by predatory
rates. The inspiration for Pana came during my time as head of
Scotiabank's Caribbean & Central America Digital Factory, where I
saw the power of building digital banking products for the Hispanic
market. In stark contrast, I was surprised to learn on a trip to
the US that without a Social Security Number I had to visit a
traditional branch. After numerous signatures and hours of waiting,
I was finally able to open the account--and then handed an ATM card
instead of a debit card which would only allow me to do cash
withdrawals and not the ability to make purchases. Adding insult to
injury, I could never reach the bank officer again for support.
Because this was so surprising to me, I checked with friends and
family, and all of them shared similar experiences. "Lack of
trust," "high fees," and "cultural differences" were words I heard
repeatedly. It isn't just end-customers who struggle with this
system. Employers and sellers transacting with the 12M people
living in the U.S. without a Social Security Number have to rely on
cumbersome paper checks, cash or money order, and seriously, you
have no idea how complicated it still is to perform basic
transactions like sending money abroad. Encountering this broken
situation made me realize that a new startup would be best
positioned to fix it. I had already, working with a team that's
knowledgeable about the Hispanic market, built digital banking
solutions solving some of these issues--but only for big banks;
smaller institutions tend to lack the scale, technology, and reach.
However, the big banks are the ones who ignore this demographic in
the first place because they have "bigger fish to fry"--a catch-22!
The market, however, is easily large enough to support a new
business, so we decided to build it ourselves. With Pana, we're
applying the functionality and community-building aspects of
familiar apps like WhatsApp to the banking space. Today, Whatsapp
is widespread in the US Latino market -specially around informal
peer-to-peer financial transactions-, proving that when one tool
catches on, it will probably become the norm across this diaspora.
We're building on the social trust strongly embedded within the
Latino culture to help achieve personal financial goals.
Individuals can choose to share milestones and celebrate
achievements with close friends or public groups of peers with
similar needs. Within a group, payments and requests for payment
among users can be made. If this works, banking on social trust
could potentially disrupt the $320B in yearly transactions through
Alternative Financial Services (money orders, check cashers, payday
loans, etc.), and who knows, maybe eventually the banking industry
as a whole! Latinos represent the fastest-growing diaspora in the
USA with a 1.7T buying power and are often forgotten--in part,
because we are not compelled to use existing banking products and
therefore, no one can see how trustworthy many of us really are.
We're now on a mission to remove these financial barriers. We
really hope you guys check out Pana and tell us any feedback you
might have, and we look forward to your comments! [1]
https://www.federalreserve.gov/publications/2021-economic-we...
[2] https://www.npr.org/sections/codeswitch/2014/04/01/292580644...
Author : Piero0909
Score : 54 points
Date : 2022-08-12 12:07 UTC (10 hours ago)
| cphoover wrote:
| social/chat based finance seems ripe for fraud to me. Imagine if
| a facebook worm had access to your finances. How do you overcome
| this concern?
|
| EDIT: I guess messenger does have it's own payment system too...
| which seems crazy to me.
| Piero0909 wrote:
| Great point, it's exactly because its the other way around that
| its completely different. Instead of adding financial features
| to a social platform, we're adding a chat functionality to an
| FDIC insured and secured banking platform. Its sounds like the
| same but from a security stand point -as well as a cognitive
| one- we believe it makes all the difference.
| jamal-kumar wrote:
| Funny you mention scotiabank in the caribbean/central america. I
| specifically signed up for them so I could use them in that
| region, they told me yeah you're good to go for your account
| services there by the people at the bank in Canada... NOPE, can't
| even make a deposit or anything with this card, the banker in
| Canada was wrong. Oh well at least there's no transaction fees on
| the card whenever I use it.
|
| So my question about your company is this (Great idea by the way)
| - How well do your accounts work for travelling outside of the
| USA?
| Piero0909 wrote:
| Honestly, and dont take my word for it, the international Visa
| Debit card you get when opening an account works flawlessly!
| dont__panic wrote:
| What makes Pana specific to Latinos? It sounds like this product
| is relevant to pretty much any immigrant who's struggling to set
| up banking in the US while occasionally exchanging money with
| folks back home. I can imagine folks from every ethnic background
| and 6 of 7 continents using this product.
|
| I guess it's a market focus thing -- appeal specifically to
| Latinos to build a small, dense network before you branch out to
| other backgrounds?
|
| Just feels a bit weird to claim to be "inclusive" when you also
| claim that you're for one specific ethnic group.
| neither_color wrote:
| Within that specific ethnic group there are several national
| backgrounds. Even the word "pana" itself, which is like "bro"
| is not used by all the different subgroups of latinos(some
| might say compa, parce, chero, etc). I like the name because
| it's easy to say and sounds like "pan-american." I just think
| you have to start somewhere. Where I've lived there seem to be
| just as many South Asian and East African immigrants as
| latinos.
| Piero0909 wrote:
| You're exactly right! This is just a starting point as we're
| for everyone. Latinos is a segment we truly understand and
| therefore it made sense to start there. Pana means "Pal", and
| we believe thats the type of friendly banking all migrants need
| when coming to the USA
| mritchie712 wrote:
| Counterpoint: Don't change anything. Building something that
| is clearly made for "you" (as the customer) is one of the
| advantages a startup has. If someone in your segment gets to
| your landing page, they can quickly see this is custom built
| for them. If you build for everyone, you effectively build
| for no one.
| santiagobasulto wrote:
| This is a great endeavor! I add 1 extra "niche" for you there in
| case it helps. People working remotely, but want to have a US
| bank account.
|
| It happens A LOT with freelancers from Argentina/Uruguay. If you
| live in Arg, but work for a US company, you want to use a US bank
| account.
|
| A lot of people I know are now transitioning to Wise.
| firekvz wrote:
| Wise bans venezuelans, cubans
|
| Constatly closes central americans account, perma holding with
| no support answers to colombians
|
| Instant closes latin accounts of people who have emigrated to
| the US ilegally/refugees/asylum
|
| Has no chile/peru outgoing transactions
|
| Bolivia doesnt exist in wise
|
| It seems like they are actually making an effort no serve latin
| america or kick out the latin america users.
|
| So much for 'borderless accounts'
|
| Aparently borderless for them means people living in SF sending
| money to people in NY
| aidabennouna wrote:
| Best of luck for you guys. This project will be a success
| Asafp wrote:
| [deleted]
| Edisonmss wrote:
| drstewart wrote:
| Nothing says "inclusive" like targeting customers based on
| their ethnicity
| atlasunshrugged wrote:
| I think they make it pretty clear this product is for
| everyone but that Latino's are their first market.
| throwaway8582 wrote:
| Imagine if someone made a similar product, but explicitly
| marketed towards white people. How well would that be
| received here?
| atlasunshrugged wrote:
| Ironically, I think many latino's do classify themselves
| as white! https://www.pewresearch.org/hispanic/2021/11/04
| /measuring-th...
|
| I get what you're driving at but I just don't think it's
| helpful for anyone to pretend that there aren't groups of
| people with different needs, cultures, etc. and don't
| think this is that big of a deal
| 29athrowaway wrote:
| Latino relates to country of origin not ethnicity.
|
| There are many colonies of Europeans in Latin America
| that are mostly endogamic and they would be considered
| Latino too.
| drstewart wrote:
| Country of origin can be an ethnicity. Ethnicity isn't
| race.
|
| https://en.wikipedia.org/wiki/Latino_(demonym)
|
| >Neither "Hispanic" nor "Latino" refers to a race, as a
| person of Latino/Hispanic ethnicity can be of any race
|
| https://thesocietypages.org/teaching/2013/04/02/latino-
| race-...
|
| >As sociologists, we are quick to refer to "Latino" as an
| ethnicity,
| 29athrowaway wrote:
| So an endogamic Mennonite living in Latin America is the
| same ethnicity as a tribe member from the Amazon? Makes a
| lot of sense. Good job, sociologists.
| drstewart wrote:
| I actually agree, and think there's probably a clear need
| here to provide for a market that's underserved. I do
| think it's odd to categorize this as inclusive though.
| gapm89 wrote:
| Quite an interesting solution for such a big market, as Latinos
| we have so many obstacles to have access to finance services when
| we have just migrated. This can change all of that
| geeny777 wrote:
| Aren't there regulations that make this illegal? Surely current
| online banks would let you open an account without an SSN if they
| were allowed to.
| djbusby wrote:
| How to KYC w/o SSN or other things the Gov wants to track us
| with?
| Piero0909 wrote:
| Some major banks do allow you to open an account without an SSN
| whenever you have a valid proof of address just like Pana. The
| difference is that they require you to visit the branch in
| person, we don't.
| atlasunshrugged wrote:
| In that same vein, are there unique KYC/AML requirements that
| come about when dealing with customers who don't have an SSN?
| I've had the experience as an American banking in Europe and
| my impression was that banks really don't like to serve
| foreigners as customers because it has a higher overall risk
| profile (I know Americans also have unique additional
| reporting requirements but in general that was my
| understanding). Are there any regulations you have to deal
| with around immigration reporting?
| Piero0909 wrote:
| If you have a valid passport and a proof of address in the
| USA, you are able to open a bank account with Pana and even
| some big banks. What we've seen is that its 10x more
| difficult with these big banks.
| atlasunshrugged wrote:
| Sure, but it's probably partially more difficult because
| there are heftier regulatory requirements for non-
| citizens, no? I'm just curious how that translates
| practically to KYC/AML work on your side
| Piero0909 wrote:
| Yes there are. For now from a regulatory standpoint
| validating the users identity and their proof of residing
| in the USA is enough to comply with KYC/AML standpoint
| rajasimon wrote:
| I never visited US but I have US bank account through Aeldra.
| And the required document it's just my Indian passport.
| missedthecue wrote:
| I haven't figured that out. Bank of America required my SSN,
| but Varo, a neobank, did not require it. For my purposes they
| are functionally the same product, but maybe neobanks are
| excluded somehow?
| [deleted]
| 29athrowaway wrote:
| I think you may be conflating a few things here.
|
| Being Latino and not being eligible for a social security number
| (and by extension having a bank account) are different things.
|
| There are millions of Latinos that are citizens, some others are
| permanent residents, temporary workers, fiancees or otherwise
| people eligible for a SSN... Some others are refugees under TPS,
| some others are in DACA, and so on and on.
|
| To conflate Latino and undocumented immigrant is upsetting as
| fuck, it reinforces negative stereotypes that already cause
| significant problems like citizens being assaulted, insulted,
| discriminated against, kidnapped by ICE, harassed by TSA, CBP and
| other agencies.
|
| Conflating undocumented immigrant and Latino is a disservice to
| the community at large.
|
| Another thing is: how do you guarantee your service won't be used
| to finance or otherwise facilitate human trafficking, smuggling,
| prostitution, extortion or any other illegal activity? Will your
| service adhere to the Bank Secrecy Act and other regulations?
| Piero0909 wrote:
| Millions of migrants including Latinos come to the USA legally
| and while they go through the process of getting an SSN usually
| some time passes while one needs a bank account for many
| reasons. During that period, Pana offers a 10x better
| experience. We at Pana are solving problems we've personally
| experienced. The Pana bank account is FDIC insured and
| compliant with all required regulations through our banking
| partner Piermont Bank.
| missedthecue wrote:
| " _To conflate Latino and undocumented immigrant is upsetting
| as fuck_ "
|
| Or... just an accurate perception of reality? Turns out, not
| many Namibians or Mongolians make it to the USA undocumented.
| This doesn't have to be a politically charged observation
| unless you're trying to force it to be one.
| 29athrowaway wrote:
| What do you think is the proportion of legal and illegal
| Latinos?
|
| What you say implies something close to 99% of Latinos are
| undocumented, and that's not even remotely true.
|
| If there are 60 million Latinos in the US, and 11
| undocumented immigrants of all national origins, that means
| your statement is false as well as intellectually dishonest.
|
| And some of those might as well be descendants of US citizens
| removed via ethnic cleansing.
| https://en.wikipedia.org/wiki/Mexican_Repatriation
| [deleted]
| csomar wrote:
| Not wanting to sound negative but can you explain how you are not
| going to shutdown in a year.
|
| Cheese recently announced the closure of all accounts by the next
| month. It has the same ideas as your startup (except it's
| targeting Asians).
| Piero0909 wrote:
| Thats ok :) Its a completely different segment and our early
| traction as well as our insights for whats to come make us very
| optimistic for the future.
| vt85 wrote:
| lvass wrote:
| Good luck with your launch! As a latin in south america, can I
| open an account in your bank? Do I risk getting blocked if I
| deposit through crypto exchanges? My country is in ruins and
| using local banks just means we lose all our money really fast,
| we have crypto as an alternative but I want a bank I can trust.
| Piero0909 wrote:
| Hey Ivass, at the moment only users who live in the USA can
| open a bank account
| lvass wrote:
| Could you please also clarify what living in the USA means?
| If I happen to travel with a tourist visa, is a certain
| amount of time necessary? I imagine a lot of those 62M used
| tourism visas. Are they allowed to go back to their countries
| and still keep the account, for how long?
| Piero0909 wrote:
| You must provide a proof of address like a utility bill or
| a bank statement with you name on it that proofs that you
| live in the USA
| firekvz wrote:
| I dont live in the US, yet I have bank accounts, credit
| cards, services and utilities paid (Google fi, etc) with
| US address, can I access?
| civilized wrote:
| It looks like you basically combined FDIC-insured bank accounts
| with Venmo-like payment functionality and some other stuff? That
| seems pretty useful.
|
| But currently Latinos mostly use Whatsapp for payments? Is that
| right?
| Piero0909 wrote:
| In part yes. We've also implemented free remittances up to $300
| making it 10x better and cheaper to send money for 90% of use
| cases. Thanks!
| atlasunshrugged wrote:
| That's really interesting, how do you manage the conversion
| for the person accepting the funds abroad? Generally you have
| to tap into a partner network you build right? Or are you
| partnering up with some existing provider to use their
| infrastructure?
| Piero0909 wrote:
| Thanks! The person getting the funds can receive them in
| their bank account or pick it up at specific locations.
| They can either have a Pana profile (chat only) or not. We
| do have great partners including some on the infrastructure
| side
| toomuchtodo wrote:
| Kudos to the free remittance feature, genuine social good
| there. Wishing y'all success!
| aaaaaaaaata wrote:
| Are you avoiding mentioning ETH/cryptocurrency things because
| you're unlikely to integrate them, or because it's not super
| popular to talk about that right now?
| Piero0909 wrote:
| Great point! We believe there is a lot of potential on many
| other technologies like ETH/Crypto. We just had to start
| with basics and continue to evolve from there
| thankful69 wrote:
| Zelle in the US is the most common form of instant payment, at
| least in South Florida.
| millzlane wrote:
| It's becoming better. But my companies credit union doesn't
| have Zelle yet. While my state employee credit union does.
| superjose wrote:
| I remember back in 2016 when I traveled to the US to get my
| master's (proud latino over here).
|
| It was cold af, but the college experience was awesome: met a lot
| of different cultures, made some great friendships, and learned a
| lot... But...
|
| As every new person to a new country (in a foreign language),
| there are many hurdles, and it's impossible to forget how painful
| it was to open a bank account.
|
| It took me a painful 3 hours and several voodoo tactics with a
| relative to finally open a checking bank account within Bank of
| America.
|
| No SSN, no credit score, no records; it was as if I didn't exist.
| I needed the bank account because it was how I was supposed to
| receive my funds and live!
|
| Finally... just finally after that awful experience was over, it
| went buttery smooth. Love the technology that US banks provide
|
| Nonetheless, after 2 years, my study period was over and I left
| the US (I do visit it yearly for tourism), and left my BofA
| account opened with some $.
|
| As it was normal, my debit card expired, and I had to issue a new
| one to access my account! BoFa requires you to use your debit
| card PIN as a 2FA step.
|
| The problem is that the only address I have is a courier. And
| while I can receive almost anything, I don't know why, even after
| verifying my address, it never seem to reach it.
|
| Therefore there's no way to get back to your account, unless you
| spend 1 hour of your day dealing with customer support.
|
| In addition, BoFA has geoblocking outside the US. I have to
| connect through a VPN and use Google Hangouts (to prevent
| expensive international calls) to reach them.
|
| Just plain awful.
|
| If you asked me I do miss having a US card because there are
| sites that only allow you to use US issued cards. For one, I
| couldn't buy AppleCare for my father's MacBook because Apple
| wouldn't allow me to use foreign cards.
|
| I have no idea whether this service (Pana) would do any justice,
| but if it works as well as the founders are envisioning to, then
| have my blessings.
|
| We all need to be represented when we travel abroad, especially
| the marginalized Latino community.
| csomar wrote:
| BoA just sucks for foreigners. But not all banks are like that.
| Wells fargo will allow you to have a foreign number and send
| your debit/card overseas too.
| Piero0909 wrote:
| I so feel your pain having lived it in flesh and bones and yes,
| we're just getting started but those are the pain-points we're
| working on fixing. Thank you for the feedback and we hope you
| try Pana. We do not have hidden fees like minimum balance or
| even debit card fee
| superjose wrote:
| Oh, that sounds interesting. I'll give it a shot!!! Thanks!
| berns wrote:
| He said he no longer lives in the United States. Did I
| understand correctly that you need to live in the US to open
| a Pana account?
| Piero0909 wrote:
| Correct, in case he were to move back to the USA, he'd be
| able to get out a Pana account and enjoy these benefits we
| described
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