Remitly to close digital banking platform Passbook

by James · February 27, 2023

Dive card:

Remitly closes Passbook, the immigrant-focused digital banking platform launched in 2020announced CEO and co-founder Matt Oppenheimer during fintech’s earnings for the fourth quarter last week, citing the firm’s mission to narrow its focus on core clients.
The remittance-focused fintech is no longer accepting new Passbook accounts and will stop services for the neobank on May 1, according to a post on Remitly’s website.
The move comes as the Seattle-based firm strengthens its global remittance presence. The firm announced Thursday that it has expanded into the Middle East by opening a new office in Dubai.

Diving Insights:

While Passbook gained traction with customers, the product was outside fintech’s core customer segment, Oppenheimer told analysts last week.

“We believe it makes sense to reallocate our resources to higher-return investments targeting our core remittance customer,” said Oppenheimer, who co-founded the company in 2011. “We’re taking the best of Passbook and integrating it into our products. or features for to deliver greater value through innovative solutions that are directly relevant to our customers’ payment needs. And we are uniquely equipped to deliver.”

It’s not clear how many accounts Passbook has accrued in the three years since its launch. The company, which is partnering with St. Paul, Minnesota-based Sunrise Banks to offer the accounts, did not immediately respond to Banking Dive’s request for comment.

Remitly, which caters to the immigrant community with its money transfer services, launched Passbook with the goal of making banking more accessible and affordable for the same demographic.

However, the product did not have significant overlap with Remitly’s existing customers, Oppenheimer said.

“The product wasn’t going to achieve the necessary scale quickly enough to contribute to meaningful returns because it was just a different segment than Remitly customers,” Oppenheimer said. “We didn’t get that synergy.”

As the fintech dials back its neobank ambitions, it continues to scale its global money transfer network.

The company announced Thursday it launched its outbound money transfer product in the United Arab Emirates, a country where immigrants make up nearly 90% of the population; according to the Migration Policy Institute.