Digital banking leader Nubank is venturing into Latin America’s travel sector by introducing a new Global Account product together with Wise. Tailored to cater to the financial needs of the bank’s affluent customer base, known as “Ultraviolet,” this initiative marks a strategic foray into the high-income market segment.
Nubank’s iconic purple-coloured debit cards have achieved widespread popularity in the country, where the fintech boasts roughly 90 million customers. With the Global Account, Nubank seeks to pursue one of its key strategic objectives in 2024: extending its footprint in Brazil’s affluent market segment.
The feature is designed for Brazilians travelling abroad and lets users convert balances from Brazilian Reais to dollars and euros within the Nubank app without requiring inter-account transfers. This is facilitated through Nubank’s collaboration with British fintech Wise Platform, which is known for its expertise in cross-border transactions.
More convenient than traditional credit cards
The neobank, backed by Warren Buffett, asserts that its 0.9% currency conversion rate is “the lowest in the segment,” emphasizing that utilizing Nubank’s credit card abroad offers greater convenience to travellers than traditional credit cards. Additionally, the product will enable users to make up to two monthly foreign currency withdrawals at no charge.
As part of its marketing initiative, Nubank grants customers a virtual SIM card with 10GB of internet access, valid for 30 days across 40 countries. The aim, the bank said, is to alleviate concerns about international roaming charges, ensuring that users arrive at their destination already connected.
“The Global Account comes to meet the growing demand from high-income customers for international financial solutions that are flexible and advantageous,” said Livia Chanes, CEO of the Brazilian operation. “The travel segment is a priority for this audience, and we enter it with the Ultravioleta differentials that customers already know – a product developed specifically for their needs, with a 100% integrated experience in our app, which can be used anywhere in the world, with special conditions and unique benefits, such as better conversion rates, as well as free internet included.”
Nubank and Wise target a profitable segment in Brazil
Amidst rapid customer acquisition, the neobank has diligently focused on enhancing its profitability metrics, particularly in response to the challenging landscape of venture capital investment since 2022. “Ultraviolet” represents a suite of financial products crafted to cater to the requirements of Nubank’s affluent clientele.
Securing a significant portion of high-income customers could prove pivotal. Although Nubank has been consistently increasing its average revenue per customer, bolstering the array of products tailored specifically for this segment could deliver a substantial uplift to its business metrics.
David Velez has made catering to high-income customers a high priority this year. The digital lender has already rolled out tailor-made features for investments and a premium credit card. During the last quarter, the fintech reported credit card purchases among its most premium clients more than doubled from $500 million a year before to over $1 billion per quarter.
2024 goals for Nubank
“Success for 2024 entails further expanding our base of Ultravioleta customers and increasing their usage of our products,” said Velez during the latest earnings call conference. “Launching more products and services tailored for these individuals and growing the number of our primary banking accounts with these segments.”
With over 85 million clients in Brazil, Nubank is already the fourth-largest financial institution in terms of the number of clients in the country, according to Brazilian Central Bank data. In 2023, the digital lender reported over $1 billion in net income, as the firm looks to move well past breakeven.
Taavet Hinrikus and Kristo Käärmann co-founded Wise in 2011 under its original name, TransferWise. The firm processes around £9 billion in international transactions every month.
