A lack of alternatives for the unbanked is one of the least discussed and pervasive social issues of our generation, according to Virraj Jatania, co-founder and CEO of Pockit, a digital platform that allows banking’s underserved to manage everything from salaries, make purchases, and send funds internationally.
Founded in 2014, Pockit helps low-income UK customers manage their money with a bank account that they can open within two to five minutes. There are currently millions of residents within the UK that don’t have bank accounts, according to a recent BBC report. Under Pockit’s platform, 500,000 of these consumers are now managing their mony, from government assistance to salaries, using the company’s platform. They can also deposit cash at specified PayPoint locations and are issued a Pockit debit card for purchases or to pay bills.
“There is a high cost to serve, with a very heavy cost involved in branch infrastructure, legacy processes and legacy technology and frankly, a lack of desire,” said Jatania in a recent interview, “because focusing on the underserved segment will not generate the revenue banks are looking for.”
There are at least four million people without a bank account or struggle with restricted access to banking services in the UK today, according to Jatania. The company currently serves low income earners across the country—specifically those who have under £1000 saved or are functioning with very unpredictable cash flows. A majority of Pockit’s customers are outside of the larger London hubs and 25% are new to the country, while the rest are UK natives.
But it’s not just underdeveloped countries that can benefit from the Pocket platform. In the U.S. many blue collar employees also fall into the unbanked category with many being paid by check, cash, or into family accounts. People are being underserved everywhere, and most banks are not tapping into this potential consumer base, because their business models are largely based on revenue generated from overdraft and other fees or aren’t advanced enough to reach this customer base.
The entire platform is digital and managed by the Pockit app or online and also allows customers to send money to up to 35 countries. That’s what differentiates Pockit from the larger banks, Jatania says, “Banks are holding back a lot of functionality for their higher income customers.”