Although the U.S. economy is among the most robust in the world, over 14 million of American adults are still unbanked and lack a credit score.
This is especially true for part-time students, young workers, gig employees without a stable nine-to-five job, and immigrants who might have come to the US recently, and haven’t had enough time to build up their credit score. According to the U.S. Bureau of Labor Statistics, in 2017 16.5 million people in the US were working in “contingent” or “alternative work arrangements”.
Being financially vulnerable, these people often find themselves in a predicament, turning to loan sharks and other predatory services; many end up being trapped in a vicious circle of debts, living from a paycheck-to-paycheck. On average, 19% of households with a family income of less than $30,000 are unbanked. To those people, receiving their paycheck on the exact day is often crucial. Normally, they would not get access to capital due to the lack of comprehensive and reliable data aggregation. As a result, the traditional institutions overlook millions of people, who end up paying millions in overdraft fees to make ends meet.
That’s where B9, an AI-powered fintech solution that helps the unbanked gain access to the vital financial services, came into place. B9 provides an early access to paycheck, peer-to-peer instant payments, interest-free payroll advances, and a VISA debit card. Right now, B9 is in hypergrowth mode, having raised $5 million in seed funding.
How does it work?
To access benefits of B9, one must fill out their basic information and provide Social Security Number or the Individual Taxpayer Identification Number. B9’s AI-powered solution then aggregates and analyzes data, creating a portrait of their customer’s economic behavior including their earning patterns.
To receive their paycheck as early as 15 days in advance, the customers deposit paychecks to their account. They can also make peer-to-peer instant digital payments and use the B9 card to make online and offline purchases. B9 itself is not a bank – it collaborates with Evolve Bank & Trust, which issues a Visa card. Our customers pay a monthly subscription fee of $9.99 ($4.99 until December) and can carry out as many financial activities as they please without any transaction fees.
B9 factors in heaps of data relating to earning patterns, needs, and wants, – all of which form a BnineScore. The latter enables customers to build up credit and gain access to a wide variety of products and services cheaper than high yield small-dollar services. In the future, B9 is going to serve as a marketplace that connects lenders with potential buyers. The app provides the former with data or credit scores, helping determine the client’s trustworthiness.
Dreaming big and social
The decision to lend a helping hand to the financially vulnerable has been a success.
In 2021, B9 raised $5 million from investors, securing $1,7 million at the pre-seed stage. To date, the solution attracted more than 60,000 users and saw a 3 fold month-over-month growth in customer transactions. The addressable market is around 150 million people, and B9’s customer insights show that the app is on the right track. Most of the app’s clients are between 18-35 years old, working in the gig and freelancing economy.
The workers from mammoth industry players, such as Amazon, Walmart, and Uber, have deposited their paychecks to their B9 accounts, and trust the platform.
With the expanding growth, the team is going to provide services to 200,000 customers in the nearest future. By serving groups of people who have been widely invisible to traditional banks, the team believes that their solution will advance America’s more financially inclusive economy.