Dive Brief:

• Sendwave, a remittance firm owned by London-based Zepz, is venturing into neobank territory with the launch of FDIC-insured bank accounts for U.S.-based customers, the Boston-based fintech announced on Tuesday.
• New York-based Piermont Bank will provide the underlying banking services for Sendwave Pay, which offers users a debit card and reimbursements for international transaction fees when the card is used outside of the U.S., the company said.
• The launch of Sendwave’s digital banking platform comes as the firm looks to forge stronger ties with the immigrant segment, a core demographic for Zepz, which also owns money transfer firm WorldRemit, which acquired Sendwave in 2020.

Dive Insight:

"Investing in meaningful innovations to serve the needs of cross-border communities is part of our purpose and at the heart of everything we do," Zepz CEO Mark Lenhard said in a statement on Tuesday. "Sendwave Pay enables US-based migrants to take their money farther, creates financial empowerment through interest schemes and competitive benefits, and firmly establishes Sendwave as a heavy hitter in the fintech space."

Sendwave Pay offers customers access to up to 0.4% improvement on exchange rates and up to 25% savings on transaction fees on remittances to Kenya, Ghana, Tanzania, Uganda, Nigeria and Liberia when using the funds in their accounts, according to a press release. Customers can also earn up to 0.51% interest on the money held in their Sendwave Pay account.

Lenhard also teased the upcoming launch of a digital wallet earlier this month, telling CNBC the product would convince customers to rely more on Zepz, and help it compete with other digital banks and financial apps.

“We want to be a core financial hub for a very particular segment,” Lenhard told CNBC this month.

While Sendwave’s new venture aims to strengthen relationships with its existing customers, a similar attempt hasn’t panned out for remittance competitor Remitly. 

The Seattle-based fintech announced in February that it was shuttering Passbook, the immigrant-focused digital banking platform it launched in 2020.

While Passbook was gaining traction with customers, the product was outside the fintech’s core customer segment, Remitly CEO and co-founder Matt Oppenheimer told analysts during the firm’s fourth-quarter earnings call.

“The product wasn’t going to achieve the scale necessary fast enough to contribute to meaningful returns because it was just a different segment from Remitly customers,” Oppenheimer said. “We didn’t get that synergy.”