In the early 2000s, native Swede Magnus Larsson spent a year and a half in the U.S., studying in Miami, and teaching Swedish in Minnesota. During his sojourn, he found it more difficult than he thought it should be to perform simple settling-in tasks—such as setting up a bank account. It wasn’t clear to him, for instance, what the difference was between a checking and savings account. The red tape was exhausting. He started relying on a network of fellow Swedes, who had been there and done that, for advice on how to check off everyday items.
If “a white dude from a privileged country” was having such trouble, Larsson says, he hated to think of the tribulations other immigrants were going through.
That experience urged Larsson toward his mission to “serve migrant communities with fair and transparent services,” especially those from cultures very different from America’s. He is now the cofounder and CEO of a banking service called Majority, which launched in beta in October 2018, and in full capacity this February, to supply immigrants to the U.S. with the financial tools needed to make a positive start in a new country, especially at a time when much of the government and media are doing a disservice to immigrant populations.
“People that travel to other countries are the most ambitious people in the world,” Larsson says. “We just have the ambition to become a platform for people to thrive and succeed.”
Majority offers a subscription-based, digital-only banking service, for $5 a month, offering everything a traditional bank does, including deposits and making payments and transfers. It has no minimum balance requirements or overdraft fees, which are often hurdles for newcomers. It has partnered with Ohio-based Sutton Bank, which allows access to 55,000 ATMs around the country.
It’s also building out a cultural guidance portal for users. This “Community” feature will be a section on the app and website, containing useful information and resources on visas, work permits, Social Security, taxes, health insurance, education, banking issues such as loans and credit—and how immigrants specifically should navigate eligibility and receipt of stimulus checks. It’s all part of the mission to provide equitable tools and resources for newcomers that many Americans already have to make a head start.
In the U.S., 63 million adults and 25% of households don’t have full access to a bank, according to a 2017 FDIC report. And, according to the same agency, about 51% of foreign-born noncitizens are either unbanked or underbanked, meaning they are not using the full extent of the banking industry’s service.
Immigrants often face logistical barriers to opening bank accounts, because they may not have the specific documents that many banks require, since government identification can vary so much from country to country. But the bigger issue is contextual knowledge: not having a cultural-specific guide to walk them through a process that can differ substantially from their home country. Many simply shy away from even entering a bank.
To ease those concerns, Majority users need to show only minimal documentation, including a form of ID and an ITIN—an Individual Taxpayer Identification Number, available from the IRS to those who don’t have a Social Security number. As of February, just before the widespread onset of coronavirus, the app had 20,000 registered users who can access the community features, 5,000 of whom had deposited money in an account.
Because the aim is to offer personalized help for each diverse community, all of which have different immigrant experiences, Majority is working closely with specific immigrant groups, beginning with Nigerian Americans in Houston and Cuban Americans in Miami. By making grassroots inroads, Larsson says they can better understand how to serve those populations.
Within those two communities, new users can enlist cultural guidance from Nigerian American and Cuban American “brand ambassadors” who’ve been through the processes themselves, and so can provide that all-important contextual and cultural savoir faire. The company has also set up at local points of service in those cities, such as grocery stores and retail shops. Larsson wants to replicate this ambassador model, reaching out to different communities in different cities.
Larsson describes Majority both as a fintech service and a “neobank,” the term given to banks that operate exclusively online, which are now prevalent in Europe and gaining steam in the U.S. But the term he prefers is a “migrant tech” company, because it focuses on its dedication to pinpointing solutions for migrants. That’s something Larsson has been addressing since 2015 with his prior company, Rebtel, an international calling service.
Like its closest competitors in the migrant tech space, such as Remitly, and London-based World Remit and Transferwise, Majority also provides international remittance services, as part of the subscription, with unlimited, instant transfers without extra fees. And it’s brought Rebtel’s central proposition, international calling, into the bundle, important for many immigrants to call family and friends who may not have access to affordable internet.
Majority’s headquarters are in Houston—where 140 languages are spoken and almost 43% of its residents identify as nonwhite—as is its first physical location. But it’s not a traditional bank branch, rather an event space. Employees can work from there and hold meetings; brand ambassadors can meet with prospective and current customers; immigrants can host community events and even weddings—all after quarantine is lifted, of course. A hub in Miami is planned for later this year.
For Larsson, the Majority model is scalable to different countries in Europe, plus Canada and Australia, all hubs of immigration. But the U.S. was chosen as the first market, not just for its size. Despite the current administration’s rhetoric, America is a land of immigrants, where, well, everybody is from someplace else. That sparked the business’s name, since the majority of people are migrants in some way—especially in America. “The United States is a country built on migration,” Larsson says. “So, for us, it was obvious.”