Jiko, a fintech startup that uses customer deposits to purchase short-term treasury bills, announced its first banking-as-a-service (BaaS) client today. It will partner with Euphoria, a technology suite for the transgender community that helps alleviate the struggles associated with gender transition, to launch a banking app called Bliss.
Between 2-6 million people in the United States identify as transgender, and 34% lack identification to match their gender, making it harder for them to access banking products, the company wrote in its press release. Most banks’ compliance processes do not accommodate individuals in this situation, but Jiko worked with Euphoria to customize the “know your customer” process for Bliss to allow users to open accounts with alternative forms of verification.
“Official identification presents an enormous challenge for transgender individuals,” Euphoria founder and CEO Robbi Katherine Anthony told TechCrunch in an email.
“It takes time, resources and, in some cases, the right laws to update your legal documents. If you’re in the process of updating your documents, that creates the opportunity for mismatches to be scrutinized by banks, and that could result in someone not being able to open an account,” Anthony wrote.
Anthony noted that Euphoria got connected to Jiko through one of its investors, who is friends with Jiko co-founder Rocky Motwani. From that initial conversation, a partnership emerged.
Euphoria estimates that aligning with a traditional bank to build a platform for its community would have taken 12 to 18 months of implementation, whereas Jiko was able to help them launch Bliss in just a few months, per the press release.
The move aligns with Jiko’s intended pivot away from consumer services and toward B2B offerings. It charges partners a flat monthly fee for each account. Each account holds customer funds in government-backed treasury bills, allowing its account holders to spend these funds in real time through debit transactions.
“The idea behind Jiko’s construct is to provide for one of the safest possible risk levels, with full spend capability, at the best rate available. And the instrument that historically provides this risk-return level is the treasury bill,” Jiko CEO and co-founder Stephane Lintner told TechCrunch in an email.
While Euphoria is Jiko’s first BaaS client, Lintner said that Jiko has a robust pipeline. The company is in conversations with remittance platforms in the Latino community, and has seen surging demand from corporations and crypto companies that want to store cash, according to Lintner.
“The great part about our core product is that it’s the same for everyone. Neobanks, community and lifestyle apps require mostly card issuance and retail accounts. But a very large corporate treasury platform with Fortune 500 companies would also use the same API to open accounts for its corporate clients and help them store their daily liquidity,” Lintner wrote.