Plata

Limited to cash purchases, losing a percentage of every paycheck to spend their income, and only having access to alternative and predatory lending products…these are some of the problems Latinos still face in the US. Internationally, Latinos in LATAM similarly cannot access financial products that form the foundation for wealth creation, severely stagnating economic growth in the region.

What’s worse is that these problems persist despite significant advances in fintech. Invisible to the financial system, Latinos are unable to access traditional or modernized versions of credit cards or mortgages. As a result, Latinos not only suffer from having fewer wealth-creation opportunities but also pay a premium when trying to connect, support and advance their families in other countries.  

While several problems cause this reality, there are three that PLATA is focused on resolving:

Financial Exclusion

The World Bank estimates that ~50% and ~12% of adults are unbanked in Latin America and the US, respectively.

In the US, Latinos cite language barriers, lack of local branch access, and minimum balance requirements as reasons for being unbanked. This pushes Latinos to utilize costly alternative financial services to access and send the money they’ve worked hard to earn. US check cashing is a $1.9B industry, with check cashing rates ranging from 2% to 10+% per paycheck. These fees are equivalent to a tax imposed for not having a bank account, limiting Latinos’ earning potential and lifestyle.

Latinos in LATAM remain unbanked due to similar reasons, including Lack of Trust (only 38% of unbanked individuals in LATAM trust financial institutions), Lack of Financial Literacy (only 16% of unbanked individuals are aware of mobile money solutions), and their physical distance from banks. All of these issues lead to reduced economic growth in the region. Per the IDB, bringing the unbanked into the formal financial system could drive an additional 2.6% in GDP across LATAM.

Design Bias

Despite the interconnected nature of US and LATAM Latinos, few products connect Latinos in a way that contends with their unbanked reality. In 2022, the World Bank reported that ~$121B was sent from the US to LATAM. For scale, remittances from the US account for 3.5% of Mexico’s GDP (50% unbanked) and 23% of El Salvador’s GDP (70% unbanked). Modern remittance solutions require both sides of the transaction to have bank accounts. Understanding the unbanked reality of LATAM, we realize that this leaves most of the LATAM population unable to utilize these more modern, cost-effective solutions instead relying on more expensive and time-consuming alternatives. 

Cultural Insensitivity

The limited financial services for Latinos in the US also miss the mark in meeting the community’s customer service and advertising needs. For example, not every banking partner offers robust customer service in Spanish, limiting Latinos’ ability to resolve financial issues. Similarly, we see a lack of focus when advertising to Latinos, with several banks initially opting to repurpose/recycle ads targeted at their English-speaking customer base.

At Plata, we are building the first all-in-one app for Latinos in the US and LATAM, where they can open bank accounts (USD and local currency), connect with their loved ones on the app, and send money cross-border with the push of a button.

Plata solves the domestic and international problems Latinos face by being what other platforms fail to be: a single product designed to facilitate their existing lifestyle. Unlike other solutions, Plata does not make its users force-fit their financial needs into products designed for others. Instead, Plata is designed to mirror, simplify and reduce the cost of their existing behaviors. In opening bank accounts for users, providing them with virtual and physical debit cards, and offering peer-to-peer money transfer services, Plata will be the one-stop shop for Latinos globally. With our intentional design, Plata will become the safe, dependable go-to for Latino users at any stage of their financial journey, enabling them to access and send their money at a fraction of what they currently spend, all while bringing them into the financial system for the first time. 

The Plata App is bilingual, easy to use, and designed for Latinos by Latinos. Many remittance and banking apps today–especially those servicing the Latino population–are complex, disjointed, and difficult to navigate. In contrast, Plata’s design strategy is to thoughtfully use brand visuals, UX design, tone of the copy, and iconography to ensure the App is simple and intuitive. By prioritizing an intuitive experience, it is accessible regardless of the level of literacy, Spanish proficiency, and technology familiarity. In addition, Plata continually taps into a curated focus group of Latinos of varying ages and backgrounds for user feedback to hold the App accountable for being inclusive to the community it services. 

Additionally, from a regulatory perspective, we are building in-app controls and teams focused on ensuring we meet and exceed the required Know-Your-Customer (KYC) and Anti-money Laundering (AML) requirements. Utilizing sophisticated data and analytics and 3rd party partners to augment our internal processes, we aim to stand up the first-of-its-kind scaled operations to onboard users from the most remote part of the US and LATAM. 

Our Plata solution will serve the millions of Latinos who need access to essential financial products and affordable, easy ways to send money to their families in Latin America. Our target audience is categorized into two personas: 

1. US User (Latinos based in the United States) 

Our US users, to start, are low-to-moderate-income Latinos living in the United States who struggle to access, spend and send the money they’ve worked hard to earn. The prominent user would be a male in his 20-40s working in the US construction, landscaping, or hospitality industry who consistently sends money to family outside the US. They utilize check cashing services and pay a premium in time and money spent for services that are free to a vast majority of the population.   

From customer surveys, we’ve found that between ~5.5 -10% of each paycheck is utilized to access funds, pay bills and send money. So Plata is looking to level the playing field and bridge the financial disparities that exist for the community in the US by removing these unnecessary fees. 

1. International User (Latinos based in LATAM) 

Our international users are largely unbanked or unable to connect to utilize modern remittance platforms, making it challenging to receive money from family in the United States without exorbitant fees, time-consuming travel, or inconvenient and unsafe processes. Their need to receive remittance funds, their near-ubiquitous adoption of smartphones, and their increased interest in e-commerce platforms make Plata a timely solution. 

Plata’s vision is based on lived experience. 

Growing up in the US with immigrant parents, I saw firsthand how difficult it is for Latinos to navigate systems not designed for them. My childhood memories revolve around acting as a translator for my family and my broader community, whether it was doctor visits, trips to the DMV, or disputing charges at the bank. I've seen how even simple paperwork can become a barrier to access when those forms aren't available in Spanish. Even today, despite advancements in inclusivity, there is still a substantial gap in the medical, financial, and technology products and services available to Latinos versus their non-Latino counterparts in the US.

This unfortunate reality is what drove me to start Plata. Seeing how far the US has advanced in its fintech offerings and knowing that my community continues to be left behind, relying on expensive alternatives, is what motivated me to build a platform to level the financial playing field for Latinos.

Plata’s Team and Resources are representatives of the community we are serving.

Plata is committed to creating personalized products and services designed for Latinos by Latinos. Plata's first hires are all passionate individuals with Latino roots who understand the financial inequity that exists for Latinos globally and want to be part of that change.  

Additionally, we’ve ensured that our customers are integrated into our core development process. From the first phases of ideation to developing our MVP, the Team has continually worked with a group of prospective users who are Latinos in the US to ensure we’re staying true to our core mission to empower our community. These users proved critical in our MVP development and testing phases. With over 42 Latino app testers testing the app in the US and LATAM, we’re confident we’re weaving the unique Latino experience into the application's core. Knowing the impact, we plan to continue incorporating their first-hand experiences and needs to improve our App and services in an inclusive and accessible manner.

Our vision is to connect the millions of Latinos in the US and LATAM that utilize costly financial alternatives to access and send money today. As part of our prototype phase, we have built an MVP and tested it with 42 prospective users that we selected from a 1000+ waitlist we converted on our website. The MVP yielded 100% NPS within this test group (for both Android and iOS). We also have signed 15 companies with many unbanked Latino employees (representing over 1,500 potential users) to onboard them to Plata and transition their payroll from physical checks to direct deposit for their employees. By collaborating with companies employing Latinos, we aim to scale our reach while establishing trust with the community. 

As we wrap up our prototype phase, PLATA is looking for support in these three discrete areas: 

Technical: Plata’s mandate is to reach the millions who do not have access to basic financial products. As a result, our product needs to be available in areas with limited cellular bandwidth and to users with older devices. We hope to partner with MIT’s network of technology leaders to reach those in the most remote parts of the world. 

Legal: Given the regulatory complexity of the financial industry and nuances across countries, we will need support to ensure we not only meet but exceed the regulatory requirements. We hope that in achieving our goal of helping those in the most remote parts of the US and Latin America, we can demonstrate to other companies that it is possible to reach these users at scale. 

Cultural: We understand the distrust of financial institutions that exists across Latin America. We also understand the different cultures in each country we plan to enter. Given these nuances, we’ll need help developing go-to-market strategies that will resonate across each target country. Knowing the global experiences that Solve/MIT’s extensive network of advisors have, we plan to work closely to define approaches that will allow us to capture market share in these different markets in a scalable fashion.

We recognize the ambition of our mission and know we will need help to realize our vision for the Latino community. Given Solve’s ability to partner Solve winners with world-class mentors, we hope to address these discrete challenges as well as other challenges yet to arise with the right kind of support. 

Plata is innovative in a few specific ways that we believe will drive adoption and reduce costs for our customers.

Abstracting away the complexities of the financial industry

We know how disjointed the financial service landscape is. Today there is a separate app for everything. Additionally, several companies only offer their product and customer support in English, alienating Spanish and non-English speakers. Plata removes that complexity for our users. We’ve built the Spanish-first app our users need to manage their local and international financial needs.

Designed for the realities of our community

We understand that the Latino experience is inherently global. So to meet the needs of our community, we must focus on solving the unbanked problem in LATAM. Where most modern apps ignore this reality, Plata is facing it head-on, working to reach onboard and grow in the most remote parts of Latin America. 

To achieve this successfully, we need to innovate on the traditional onboarding flows and app designs popularized by today's financial apps. Our goal is to simply the user experience and remove the need for our users to think in routing or account numbers or remember multiple passwords across services. We are building plata so that anyone who can download an app can also open a bank account, connect with their loved ones on the platform and send funds compliantly instantly. 

If we succeed in doing this, we will have given the world proof that reaching this segment of the population is possible and will hopefully pave the way for others to start to build for this population. 

Over the next 12 months, PLATA will…

• Reach and onboard US-based users that are new to the financial system via our mobile app. Our 12-month goal is to reach 5000 new users. 

• Provide an equal or better product and service experience than traditional Banks and check cashing services as measured by our customer satisfaction. 

• Have built a consistent, predictable customer flow through a diverse acquisition engine across B2B2C and D2C tactics. We expect to measure this through our customer acquisition costs.

In 5 years, our ambitions are much larger.

• Extend our reach and launch our app and debit product in 3 new Latin America markets. We hope to reach over 10% of the local countries' unbanked populations in these markets.  

• We aim to become the go-to money transfer service for our US users to send funds to their loved ones. We hope to capture 1% of total remittance volumes for the countries we are entering.

• We plan to integrate into the local countries' financial ecosystem. We will accomplish this by launching local bill pay options such as mobile device plans, utilities, and online subscriptions for our non-US users. 

Our goal is to empower those the existing financial system has left behind. As a result, the key indicators we monitor and manage-to revolve around this mission and our impact goals. A few key KPIs include:

• The number of bank accounts opened by the unbanked population

• The number of direct deposit users in the US

• Weekly transaction volume by new customers highlighting the engagement

• In-app connections established across borders 

• Remittances distributed from the US

There are over 200M+ unbanked individuals in LATAM. In several countries, unbanked rates are as high as 75% (i.e., Honduras). Simultaneously, these countries receive a disproportionate amount of remittance funds compared to their GDP. In the Honduras example, remittances account for 20% of the country's GDP. 

Given this reality, we know that most of those funds are sent through traditional, expensive remittance channels. We believe that by embedding our product into the existing remittance process for Latinos, we’ll be able to disintermediate the existing partners and provide a financial incentive for the recipients of remittances to open a bank account via Plata. 

Our core technology is a mobile application that removes the complexity of managing funds, executing peer-to-peer transactions, and sending international remittances.  

We utilize AWS and Google Cloud products as the backbone of our infrastructure and bring in 3rd party applications for identity verification and elements of our customer service (i.e.,WhatsApp). 

For our front end, we use ReactNative to build our application's iOS and Android versions. Where possible, our app also leverages in-device features such as biometrics authentication in modern smartphones as well as SMS- technology for older devices. 

For our backend, we leverage database technologies, APIs, and have designed our stack with a modern microservices architecture. This improves the performance of complex features like identity verification, document validation, messaging, and in-app notifications.

Plata’s vision to level the financial playing field for Latinos everywhere is what fuels our company’s mission and drives our focus on diversity, equity, and inclusion. We founded Plata because our team has experienced firsthand the issues we’re working to solve. And we know that as we continue to work with this demographic, we must have a team that reflects the community and understands their pain points. Designing for the Latino experience and representation are essential parts of our platform; therefore, we want those working to enhance this resource to be from the community we are reaching.

Our revenue model can be broken up into two segments: 

Subscription:

• Employers: We charge $2 per month per employee to onboard, manage, and maintain their employees' Plata accounts. In our employer interviews, we’ve found that paying employees in physical checks is expensive and logistically difficult in industries with distributed workforces. On average, we’ve found that companies spend about $4 per employee per physical paycheck. With Plata, we can remove the logistical burden of distributing checks while also saving them money every pay period. 

• Customers: We charge $5 monthly for a premium membership for remittance transfers. The account subscription is significantly lower than the per-transfer fees that traditional remittance partners provide. In offering this model, we save Latinos money and allow them to send more to their family members. 

Variable:

• Interest on Deposit: Dependent on federal interest rates, we will earn daily interest on any deposit into a Plata account.

• Interchange fees: With every swipe of the Plata debit card, we will receive a percentage of each transaction (0.7-1.5% per transaction).

• Instant funds access for Remittances: We will offer delayed or instant access to funds options for remittance transfers. We will charge 2.25% of the total amount sent to customers that choose instant access.

As we work to launch our product, we have started to meet with strategic Angel investors and Venture Capital firms. We are also raising funds from Latinos investors that want to change the status quo for their community.

Over the long term, we are building our business in a way where we expect to grow through the revenue generated from subscription and variable revenue streams.