Pomelo, the FinTech that combines credit and international money transfers

Pomelo is a young FinTech with an innovative concept combining credit cards and international money transfers. It has just raised funds to support the deployment of its offer from the United States.

FACTS

• At the heart of Pomelo's offering is a new Mastercard credit card that allows expatriates to send money to their families abroad. The Pomelo Mastercard is issued by Coastal Community Bank and is linked to an account that can be controlled from an iOS and Android mobile application.

• The Pomelo account holder can invite relatives abroad to join their Pomelo circle. They can then request that Pomelo credit cards (maximum 4 per account) be sent to their friends and family to enable them to make purchases in their country on this shared account.

• The account holder can also set limits on the use of cards issued from the account, suspend cards and track spending habits. Spending on each card will have to be reimbursed monthly by the main account holder.

• Pomelo will automatically apply the best exchange rates, in real time, when each purchase is made and debited to the account.

• After several months of beta testing, the offer has just been officially launched and is initially focused on the Philippines-US transfer corridor.

• The first Pomelo testers have highlighted one of the main advantages of the solution, which is free. Pomelo makes its money by charging interchange rates to merchants.

CHALLENGES

• A low cost alternative to money transfers: Pomelo offers a free model for users and is therefore a particularly advantageous alternative to traditional international transfer services. It is also a pragmatic alternative, which takes into account the evolution of payment methods in developing countries; these economies, which used to be essentially cash-based, have rapidly become dematerialised, opening up new options for transferring money. It is on this basis that Pomelo now offers a remote shared account, with the added benefits of a shared credit card.

• A lever for inclusion: Pomelo adds to its solution a tool that is particularly interesting for Filipino expatriates living in the United States, who generally cannot borrow on favourable terms because they do not have a credit score. Pomelo feeds data on all spending on their accounts into the credit scoring models, allowing them to improve the history and score of their customers over time and their financial support to their families.

MARKET PERSPECTIVE

• New investments to get started: Pomelo has just raised nearly $70 million in funding ($20 million in venture capital and $50 million in deposits) in a seed round. More than 120,000 people have joined its waiting list in six months, according to a co-founder.

• In addition to the Philippines, Pomelo plans to expand the geographic reach of its service in the near future by also offering to simplify money transfers to Mexico and India, and then even more widely thereafter.