Private banking challenger Letter set to land in California
Letter, a California-based digital challenger, is gearing up to launch its “modern private banking” experience.
The start-up is spearheaded by Drew Wilson, a senior software engineer manager at multibillion-dollar web hosting service GoDaddy.
Wilson previously founded Plasso in 2014, a start-up which helps entrepreneurs manage payments online. In 2018, he sold the venture to GoDaddy for an undisclosed sum.
A year earlier, Plasso had raised $1.2 million from angel investors and employed nine individuals.
Letter is hoping to tap America’s high-net-worth individuals (HNWIs). The US houses around 5.19 million HNWIs, according to Statista.
The fintech offers its affluent clients scratch-resistant, steel debit cards.
The contactless cards will hide users’ account numbers, expiration dates, and CVCs. Each user gets their name engraved on the card.
It’s unclear how the challenger makes money, as no charges are included on its website, which claims the card is totally fee-free.
Other features of the card include a configurable limit. This is so users don’t have to expose their full account balance to card theft.
There is also a setting, designed specifically for those HNWIs who employ staff, which allows for “sub-cards”. This means a user can assign individual cards to staff or family members, with their own card holder name and card balance.
As well as assigning real, sub-cards, the account can also create unlimited virtual cards for one-off payments.
The FDIC insures Letter accounts up to $250,000. The start-up does not say on its website who the banking partner is.
A charity twist on the affluent model
The challenger also gives back to a selection of four small charities.
The charities span clean water aid, support against child poverty, better healthcare in areas with little access to it, and 0% small business loans for entrepreneurs with no access to finance.
“Any time you use one of your cards, we’ll automatically send a fully tax-deductible donation to the charity of your choice,” Letter says on its website.
This is essentially Letter’s cashback model, except the cashback is going to a cause, rather than the end user.
FinTech Futures reached out to Wilson for more information on a go-live date. Wilson responded, but is yet to confirm a date.