Overview

Varo is a mobile-first bank in the US offering no credit check, no minimum balance, no monthly fees, and no overdraft fees. Varo was founded in 2015 to address financial inclusion in the USA and obtained a bank charter in August 2020.

Varo intended to deliver low-cost and attractive banking services, using an efficient, state-of-the-art tech stack, to Americans all over the country. To achieve their goals, Varo announced the launch of Varo Advance, an innovative product that instantly advances up to $100 to qualifying customers along with flexibility and control over their finances. Once a customer meets the requirements, they can request up to $100 and instantly receive the funds in their account. Customers have the flexibility to choose when they will repay within the next 30 days.

Implementation Process

Varo developed Varo Advance, a small-dollar lending program and plans to expand the capabilities as the product continues to mature. Varo exempted loans of $20 or less from fees, and removed the $100 cap. The digital bank also changed the fee structure to be $0.50 coupled with 4.7% of their principal amount.

Benefits:

Varo does not charge overdraft fees and through industry-leading products, empowers its customers to take control of their long-term financial health. Varo Advance allows customers to bridge the gaps in their cash flow without exorbitant fees, while also enjoying the ability to set their own timing for repayment within a 30-day window, again stabilizing cash flow.

Conclusion

The high adoption rate for Varo Advance indicates an extremely strong product-market fit among Varo’s customer base.

Key Facts

Supplier: Varo Bank (in-house)
Headquarters: USA
Founded: 2015
Solution: Varo Advance