Launch HN: Pana (YC S22) – Social Trust Banking with a US Latino Focus
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 m...
89 comments
[ 3.4 ms ] story [ 126 ms ] threadBut currently Latinos mostly use Whatsapp for payments? Is that right?
WhatsApp is widely used for almost everything in Latin America. But it doesn't support native in app payments yet.
They tried to do that in Brazil in 2020 but they were slowed down or halted for regulatory concerns.
Something we do very often is to share online payment links and bank transfer screenshots via WhatsApp.
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
There are many colonies of Europeans in Latin America that are mostly endogamic and they would be considered Latino too.
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,
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.
EDIT: I guess messenger does have it's own payment system too... which seems crazy to me.
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.
Had. Aeldra is winding down operations. They sent out a notice a while ago. Check your email.
Aeldra is winding down its operations due to a decision driven by external factors. This action is not specific to your account and applies to all Aeldra accounts.
I think a lot of this might inconsistent even across branches of the same bank.
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?
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).
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?
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.
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
- India: 4%
- Philippines: 3%
- China: 2%
- Korea: 2%
- Vietnam: 2%
- Mexico, El Salvador, Guatemala, Honduras, Dominican Republic: 70%
- Other: 17%
The number of illegal immigrants from Mexico and El Salvador are going down. Mexicans are no longer the majority.
[1]: https://www.dhs.gov/sites/default/files/publications/Unautho...
Anyways, the way you present accusations without even looking things up beforehand makes you look pretty bad.
I'd call that an accurate perception of reality, not "upsetting as fuck."
And this startup is trying to provide valuable services that improve their lives. Why does it upset you so?
And the part that I characterized as being "upsetting as fuck" is the false premise that most US Latinos are tourists or immigrants not eligible for a bank account rather than the reality which is that most US Latinos are US citizens that do not need this fucking application to do banking whatsoever or their unintelligent founders with savior complex that do not even know the difference between a Latino and someone ineligible for a bank account.
It invalidates the fact Latinos have been here for a long time and formed families and participate of society in a law abiding way, and now in a few words from this guy they're all back to being tourists and illegals that can't even open a bank account. Fuck! You guys know how to make someone upset.
Go to Puerto Rico, California, Florida or Texas and socialize a little bit before making such uninformed claims.
I work at a company that helps US employers provide H2-A visas and benefits to undocumented immigrants, including banking services, so I'm not totally uninformed here.
Most Latinos are not undocumented and to make that generalization, which you did, is discriminatory.
Use all weasel and misleading language you want. I know what you are trying to achieve, and you have failed at it.
I understand your point. But I think this could have been an unintended lost-in-translation kind of mistake?
The U.S English definition of 'Latino' is different from the Latin American Spanish meaning of 'Latino/Latinoamericano'.
Maybe they meant to say "Latinos en Estados Unidos", and translated it as "US Latinos" instead of "Latin Americans in the US".
The way you use language to promote your service doesn't reflect that.
You may want to say "Latino immigrants" or "Latino tourists", since those are small subsets of "Latino". Be specific.
Do you think Latinos are people that "come to the USA", as if they were all tourists and immigrants? Latinos are about 1/5th of the US population.
Why are you portraying Latinos as a network of 60 million of people informally lending money directly to each other? Do you even know 1 Latino person?
Do you think all Latinos are buying houses lending money to each other? as if any realtor would be remotely OK with that? What the FUCK
It’s interesting to me that many Chicano families can trace their history back to the old Spanish Empire. They’ve literally been Americans longer than nearly all Anglos.
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.
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
I’m thinking that a certain political party would make this whole thing unviable outside of a few cities.