Nubank plans expansion into digital accounts

Due to strict credit checks, only 2.5 million Brazilians have opened a Nubank card of more than 13 million who applied.

Tech-savvy millennials have been the core demographic for Nubank’s credit card. New accounts are expected to serve some of the roughly 60 million Brazilians (30% of the population) who do not have a bank account.

Nubank, a registered payment institution under Brazil’s central bank, will invest in public debt and offer its clients 99% of the interest, charging a small fee for its services.

Sequoia Capital, Kaszek Ventures, Tiger Global Management and DST Global have invested USD 179 million in Nubank since 2013, giving it a value of USD 500 million in early 2016 that made it the largest Brazilian fintech startup.

The number of firms in Brazil’s financial technology sector has risen about six-fold in the past couple of years as they offer borrowers lower interest rates than traditional banks.

Nubank could eventually offer debit cards linked to the new accounts and let users withdraw cash at ATMs.