Bankaya: Mexican Fintech's Offline Customer Acquisition Strategy

A Unique Approach to Fintech Customer Acquisition

The majority of financial technology companies prioritize digital strategies for acquiring customers. However, Bankaya, a financial services startup based in Mexico City, has found success by employing a contrasting method – direct, in-person engagement.

Early Traction Through Offline Channels

Established in 2019 by Mauricio Cordero, Ramón Chedraui, and Diego Vargas, Bankaya reached 450,000 customers within its first year of operation. Remarkably, a significant portion of this growth was achieved through offline acquisition strategies.

Bankaya focuses on Mexico’s 50 million unbanked citizens, aiming to substantially reduce this number with an innovative approach.

Reaching the Unbanked

“We determined that reaching this demographic digitally is impractical,” explained Cordero to TechCrunch. “A physical presence is essential, particularly as many potential customers reside in rural or remote locations and traditionally rely on methods like saving money at home.”

Bankaya’s sales team actively engages with the public, even establishing temporary locations in supermarkets and vaccination centers, equipped with debit cards.

The Importance of Human Interaction

“The underserved population requires substantial support, including guidance on using a card or sending money to family,” Cordero stated. “Many are not regularly online and are unlikely to download an app based on social media advertisements.”

This personalized engagement is proving highly effective. In December, Bankaya processed over 800,000 customer transactions, encompassing purchases, deposits, withdrawals, transfers, and bill payments – an increase from over 500,000 in October.

The startup recognizes an inherent skepticism towards traditional banks within its target demographic, and aims to alleviate these concerns through face-to-face interactions, fostering trust and providing financial education.

Building Trust and Financial Literacy

“We are dedicated to serving the truly unbanked,” Cordero clarified. “Therefore, building trust and promoting financial literacy are paramount. The human element is critically important and represents our competitive advantage.”

Cost-Effective Customer Acquisition

Cordero estimates Bankaya’s customer acquisition cost (CAC) to be approximately $4 per account – potentially significantly lower than that of many fintech and traditional banking institutions.

“Competing digital banks in Mexico are investing heavily in Facebook and Google ads, driving up acquisition costs,” he noted. “They are all targeting the same customers in an expensive manner, resulting in lower conversion and engagement rates.”

Leveraging a BaaS Platform

A key differentiator for Bankaya is its foundation on a Banking as a Service (BaaS) platform. With only around 50 fully-licensed banks in Mexico and limited new licenses awarded, this approach provides a significant advantage.

“We occupy a unique position,” Cordero explained. “We are among the first BaaS platforms connected to an existing bank, enabling a robust product offering. Fintech regulations restrict IFPEs (wallets) from handling consumer deposits, but we are permitted to do so through the BaaS license of Consubanco.”

Strategic Partnerships and User Benefits

Bankaya’s app features a free digital card, and the startup has established a loyalty partnership with Chedraui, a major Mexican retailer. Users receive 5% to 10% cash back on Chedraui wallet purchases when using their Bankaya debit cards. (Ramón Chedraui, a co-founder, is part of the family ownership of Grupo Chedraui).

Demographic Insights

Currently, 55% of Bankaya’s customers are women, and 59% earn below Mexico’s national average income of $600 per month. Sixty-nine percent do not possess a credit card. Over half of new customers are funded within the first three days of account opening and all receive a digital card upon signup. The startup also offers a 2.5% return on deposits.

Focus on Engagement and Financial Freedom

“Driving engagement is crucial for neobanks,” Cordero emphasized. “Monetization is challenging if customers don’t perceive tangible value. Bankaya aims to empower individuals with financial freedom, eliminating the need for inconveniences like lengthy trips to pay bills.”

Over time, the data collected will further refine credit analysis capabilities.

Current Status and Future Plans

To date, Bankaya is self-funded by its founders, with two not actively involved in daily operations. The company employs approximately 100 individuals and a salesforce of 300.

Bankaya is also introducing a buy now, pay later (BNPL) platform, allowing customers to access credit installments directly through the app. This differs from traditional BNPL models as it does not involve onboarding merchants.

A Sustainable BNPL Model

“Customers will use a debit card to make a purchase and repay Bankaya over time,” Cordero explained. Unlike some BNPL offerings, Bankaya will charge interest.

“Offering 0% interest BNPL is difficult in markets like Mexico,” Cordero stated. “We will charge interest, but aim to provide customers with improved financing terms upon successful repayment of initial installments.”