Zenus Bank first international financial entity to become Visa Principal Member

By Sunniva Kolostyak

American neobank Zenus Bank has become the first international financial entity to become a Principal Member of Visa, aiming to build trust before its Q4 launch.

The Puerto Rico-based digital bank will provide customers in emerging economies with account and payments services in the US. By becoming a Visa Principal Member, Zenus Bank will exclusively issue Visa-branded debit cards.

Mushegh Tovmasyan, Chairman & Founder of Zenus Bank, explained to IBS Intelligence that the FInTech aims to become the first American bank allowing foreign clients to open accounts remotely. Most countries have a local digital bank that allows remote account opening, but only for residents of the same country.

“We have not really seen any bank be able to offer those services cross-border. So what we’re aiming to offer within this bank is exactly that, almost democratise access to first world banking and allow anyone in a non-sanctioned country in the world to remotely open a bank account and get a Visa Debit card,” he said.

By being a principal member of Visa, Zenus will receive revenue from cards through the interchange rate, which would usually be lost or split with a sponsor when not being a member.

On top of adhering to governing rules, commercial terms and geographical limitations, Tovmasyan explained that Visa usually requires a new member to piggyback off of a sponsoring bank for two years until they learn how to interact with the ecosystem. This is to allow Visa to validate their business model before offering a membership.

“In our case, what’s unique is that because our model itself is so unique, there is no sponsor bank that can sponsor us. So, Visa carved out specific rules for our type of an entity and business model, essentially fast tracking us to get a membership along with largest banks in the world. So, this being a start-up, it’s unheard of.”

Tovmasyan noted that as a bank based in San Juan, Puerto Rico, it’s operating under American regulation with the same transparency and rules as other tier-1 banks in the country – and the membership at Visa helps build trust in the brand.

“Our customers are going to be remote and they’re going to trust us with their money, so the first concern in their head is, ‘is my money safe?’,” Tovmasyan said.

“Being under US regulation hopefully gives that peace and confidence, with everything that entails – audits, capital requirements and whatnot. And Visa makes it accessible for them to swipe their card or tap their phone to make a local payment, or to withdraw cash from an ATM. It localises our offering and is definitely a brand and an access point.”

Zenus will operate with an omni-channel cloud-based infrastructure, and customers can access the branchless bank through mobile phone applications or through web browsers. It will also be facilitating SWIFT wire transfers and US-domestic ACH payments.

Currently, the FinTech has a waiting list with close to 45,000 interested parties.