Pockit, a mobile banking app that provides current account functionality and is targeting the U.K.’s “underbanked,” has picked up £2.9 million in further funding and will soon begin rolling out a remittance service to make it easier for its users to send money abroad.
Available as of next week, Pockit’s 150,000 or so users will be able to send money to Poland and to Italy, with all other Eurozone countries added to the system in June. Over the next few months, countries outside Europe will also be added, starting with Philippines, India, Pakistan, Bangladesh, Ghana and Nigeria.
In a call, Pockit founder Virraj Jatania told me the new remittance service is part of the 2013-founded startup’s mission to bring a range of cost-effective digital banking products to customers currently underserved or financially excluded by traditional banks who don’t see a lot of money to be made by serving this segment of the market, despite regulatory pressure to do so. The market size is somewhere between 4 to 5 million in the U.K., and thought to be around 2 billion or more people worldwide.
Jatania says that Pockit, which counts Monise as perhaps its most direct competitor in the U.K., even though the latter has a greater focus on immigrants, decided to start with providing standard current account features aimed at customers who might otherwise find it hard to open a bank account or tend to be provided with a limited product by incumbent banks.
Not only does this mean that those customers typically pay their salary into their Pockit account, meaning that it is quite a sticky product, but it also creates a lot of trust that other financial services can ride the coattails of. Starting with remittance, the company is also eyeing up overdrafts and insurance products. In addition, it plans to let its users leverage their Pockit transaction/account data to secure a better credit score, and therefore cheaper credit and access to more competitive financial products.
And, unlike banks or Monese, instead of charging a monthly account fee, Jatania has decided to create what he described as a simple retail-type pricing model that means any features that aren’t free are charged at a standard 99 pence, such as paying in cash or making a cash withdrawal, for example.
To that end, Pockit says its new ‘send money abroad’ feature is designed to wean its users off using more expensive providers such as Western Union or Moneygram, rather than newer fintech money transfer services that they probably aren’t aware of anyway. Sending remittances abroad will cost 99 pence, plus an “exchange rate adjustment charge” of up to 2.5 per cent.
“By launching a low-cost remittance service Pockit is saving our customers money and providing a service that suits their lives. We expect it to be very attractive to our core customers who find it difficult to access conventional financial services for many reasons,” said Jatania in a statement.
Meanwhile, the new funding is essentially a bridge round before a Series B planned for the end of the year. Joining the round are Kevin Reynolds (a partner at Bridgepoint Capital), Colin Harris (founder of Fresh Direct, the food wholesaler), and Stuart Middleton (former creative director of Card Factory).
The company has previously raised £10 million from investors that include the Jatania family, Concentric Ventures, payments entrepreneur Harold Mechelynck, investor Jon Moulton, Mothercare CEO Mark Newton-Jones, and former Manchester United manager Sir Alex Ferguson.