Fintech

Alza emerges from stealth to offer affordable and inclusive financial tools to immigrants

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Image Credits: Getty Images

Arturo Villanueva spent over four years on Stripe’s financial partnerships team. During that time, he led partnerships with Visa, Mastercard, American Express, and regional banks across Latin America, struck strategic deals with JPMorgan Chase, Wells-Fargo, and Bank of America in the U.S., and led the underlying infrastructure build for the fintech giant’s cross-border payouts product, allowing Stripe to make payments in over 100 countries.

“That’s when it clicked, and I realized — ‘ah, you can really craft infrastructure in a really thoughtful way that allows you to solve pertinent issues,’” he told TechCrunch. “And then having been an immigrant in the U.S. and seeing how difficult banking was, I married those two things together, and Alza was born.”

Founded in October of 2021, Alza is a startup aimed at helping meet the various banking needs of Latin or Central Americans who have moved to the U.S. Launching publicly today, Alza has spent the past two years building its products, securing partnerships and developing compliant infrastructure.

In recent years, the number of startups focused on providing financial services to specific demographics in the U.S. climbed exponentially. Numerous companies (such as Welcome Technologies, Maza and Majority) are focused on acquiring customers who have emigrated from a Spanish-speaking or Latin American country.

With Alza, users get an FDIC-insured checking account and debit card. But that’s not really unique. What makes Alza stand out, claims Villanueva, is that users also get the ability to send cross-border remittances to more than 20 countries in Latin or Central America embedded in its app via three methods, depending on the recipient country: bank transfer, cash pick-up or transfer to a debit card.

“These transfers are generally same-day and offered at a competitive rate,” Villanueva said. “One way to think about it is, the user base we are going after already experiences unnecessary friction when opening one financial services account. Setting up multiple accounts for all their money movement needs creates a chilling effect, hindering their entry into the American economy. We’re smoothening that experience.”

Image Credits: Alza

Users can also make peer-to-peer payments. Interestingly, Alza has worked to provide a more inclusive verification process. For example, individuals can apply for an account with a variety of IDs, including Social Security number, individual taxpayer identification number (ITIN,) international passports, consular cards, some driver licenses as well as national ID cards from LatAm. The service is fully bilingual in English and Spanish.

‘A demographic on the rise’

As most fintechs offering banking services do, Alza emphasizes that it is not a bank. First Internet Bank of Indiana, a member of the FDIC, provides the banking services and issues Alza’s card, pursuant to a license from Mastercard International. The Bancorp provides cross-border transfer services. Villanueva said that Alza is immigration-status agnostic, as it is “strictly operating” within the framework dictated by FinCEN Chapter X, requirements under Dodd-Frank, Reg E, Reg P and OFAC regulations, among other applicable laws. 

As it ramps up, Alza’s revenue model will be a mix between interchange fees, interest on deposits and a small fee on cross-border payments. 

Alza quietly raised $6.6 million in a round led by New York-based Thrive Capital in late 2021. Brex co-founder and CEO Henrique Dubugras, BoxGroup, Rappi co-founder and president Sebastian Mejia, Linear COO Cristina Cordova and Sarah Heck, former White House advisor to President Obama and head of entrepreneurship at Stripe, also are backers.

Besides Villaneuva, Alza’s founding team includes Andrew Mahon, director of engineering of Affirm and David Meadows, founding engineer at Stripe, among others.

“Alza is certainly welcoming of folks who have recently started a new life in the U.S., but our vision is much larger,” Villanueva added. “We’re creating the financial tools for a demographic that is on the rise.”

‘Massive and extremely entrepreneurial market’

The majority of Alza’s 10-person team came to the U.S. as immigrants — or their parents did — from countries such as Mexico, Colombia, Venezuela, Brazil and France.

Villanueva himself was born in Monterrey, Mexico and moved to the Rio Grande Valley when he was six.

Besides knowing firsthand the pain that immigrants face when seeking financial services, the team also realizes the massive business opportunity in serving its target demographic. The economic output of Latinos in 2020 was $2.8 trillion, up from $2.1 trillion in 2015 and $1.7 trillion in 2010, according to a report by the Latino Donor Collaborative in partnership with Wells Fargo, as cited by NBC News.

Belén Mella, who led Thrive’s investment in Alza, said it’s those statistics that in part caught her attention.

“U.S. Latinos are a massive and extremely entrepreneurial market, representing 20% of the US population and $2.8 trillion in annual economic output, the equivalent of a top ten country by GDP,” she wrote via email. “Despite this economic power, anyone who has lived in a predominantly Latino neighborhood can tell you that the segment continues to be underserved by financial services, overpaying for standard products and overrelying on services like money orders, check cashing, and pay-day loans. The Alza team is uniquely positioned to take on this challenge, combining both the lived experience to empathize with their customers and the professional experience at places like Stripe, Affirm, Square and Ramp to build a world-class company in this space.”

She said she was also impressed by the company’s “engineering-led approach to infrastructure.”  

Countries Alza serves so far include Argentina, Belize, Bolivia, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Jamaica, Mexico, Panama, Paraguay, Peru, Portugal, Puerto Rico, Spain and Uruguay.

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