California-based MovoCash, a neobank that launched in 2017, released a new cryptocurrency service for its users last week. The technology, called MOVO Chain, acts as an off-ramp for cryptocurrency investments, and allows customers to quickly convert 10 different cryptocurrencies into fiat currency stored on a debit card.
The fintech is partnering with Coastal Community Bank, and offers customers five core services: MOVO Cash, MOVO CASH Cards, MOVO Pay, MOVO Digital Banking and MOVO Chain. MovoCash CEO Eric Solis said the company has signed up more than 1.2 million accounts and issued half a million cards.
The company said "cryptocurrency users located in the United States can convert and send/spend cash value via debit card to anyone with an email address or mobile number."
The new service may help crypto gain traction as a medium of exchange. Solis’s vision for the service is for customers to "use Bitcoin and other major cryptocurrencies as their long-term savings and fiat for their day-to-day payments."
To handle the cryptocurrency-to-cash conversion, the neobank partnered with payment service provider BitPay.
According to Solis, Bitpay acts as a firewall "between the bank and crypto," so that "by the time [the payment] gets anywhere near the bank, it’s back in fiat currency." More specifically, the payment is stored in the form of tokens on an electronic debit card, which can be sent to another electronic device.
Partnership with bank
Eric Sprink, president and CEO of Coastal Community Bank, said he is proud to partner with the neobank.
"MOVO Chain equips MOVO customers with a one-of-a-kind solution that enables them to convert and send cash value from their bitcoin or other cryptocurrency holdings, seamlessly," he said in a statement.
MovoCash targets a wide audience for its mobile banking services, from celebrities to those living paycheck-to-paycheck. Solis doesn’t expect that MOVO Chain will be utilized by all or even most of the neobank’s customers.
"I think that the percentage of our users that use Bitcoin are probably the same percentage that you would find in a general sample of society," he said. The service fills a niche for select customers who want to take advantage of cryptocurrencies like Bitcoin and Ethereum as an investment class, but want access to those funds for payments at a moment’s notice.
The company has recently turned to equity crowdfunding on StartEngine. So far, MovoCash raised $219,204 from 106 investors on the crowdfunding site. In sum, the fintech has raised roughly $1.5 million on a convertible note. MovoCash boasts more than $420.8 million in user deposits, and cites a 242% growth rate in 2019 and 2020. The neobank highlights its security and end-to-end contactless payment experience as reasons for its success.
Solis said he expects growth in user accounts to increase organically, as customers send payments and suggest the app to friends and family.
Movo has competition
MovoCash is hardly the first neobank to offer cryptocurrency-related services to customers. Upgrade recently released a bitcoin rewards credit card, offering customers 1.5% back in bitcoin when they use the card. Fintech Paybby plans to release a cryptocurrency platform this summer, as the company seeks to increase the popularity of crypto among minority investors. The neobank Current plans to launch crypto products in the future.