North Loop is an idea from Tahem Veer Verma, an established entrepreneur who has already had one successful exit from his first start-up, English language learning app Enguru.
“We are starting small, aiming for 30-40,000 this year”
He told The PIE News that as a returning international student undertaking an MBA at Cornell in 2017, he “struggled a lot with opening a bank account, getting a credit card and just about all the banking experiences possible”.
Ten years on from his first time in the US as an international student and he decided to fix the problem himself.
A crucial distinction between North Loop – which launched this month – and other banking products is that applicants do not need a US social security number in order to apply, Verma explained.
International students can sign up for an account before they travel to the US, and “their debit card is already waiting” on arrival, said Verma, mailed to an address provided.
Around 20,000 students have already applied to use North Loop banking, mainly because of word-of-mouth recommendations, he said.
Longer-term, Verma anticipates working with education agencies overseas to reach more potential customers and ensure international students can organise a no-fee account before they enter the US.
This means they swerve two pitfalls, he said: one is that going in-person to a bank accepting new account holders is not always a simple process that is available at all banks.
“If you’re in a smaller college town like Cornell was, there are no national banks there,” he explained. This means travelling to another city location to set the account up.
“You’re constantly reminded that you’re not a priority.”
Another problem that North Loop will reduce is that of international students arriving with “a bunch of cash” with them. “That’s not a positive experience either,” said Verma.
“You’re constantly reminded that you’re not a priority”
The business model means North Loop receives money from merchants when debit or credit cards are used in stores. North Loop is partnering with Evolve Bank to offer this dedicated international student product.
“We are starting small, aiming for 30-40,000 this year, and in the next few years, we’ll scale it up, so that by year 3, we’ll have 500,000 users on platform – some of whom will be graduated by then,” he said.
North Loop also offers a loan and refinancing scheme and an interesting referral scheme whereby interest can be saved on the loan, depending on how many friends are introduced.
Verma revealed, “We have over $2.5m in loans already applied for and its growing pretty quickly.”