“Mango Store” Brings Retail Banking to the Unbanked


There are 30-40 million American households without a bank account, according to the Center for Financial Services Innovation, a fact that could either be seen as a sad statistic – or a tremendous business opportunity.

Mango Money sees it as essentially both.

The financial services company, launched in 2008, provides prepaid debit cards to customers through their website that can be used wherever regular debit cards are accepted. The cards are convenient for people who either do not qualify for a traditional bank account or chose not to use one. The company was started by brothers Roy and Bertrand Sosa, who pioneered the prepaid debit card business, and are backing Mango through their venture firm MPower.

But Mango’s most ambitious innovation came in April, when the company opened the first Mango Store in Austin, Texas. This retail “unbank” provides an actual physical location for Mango Money customers to come refill their cards, transfer balances, pay bills, and cash checks – at a fraction of the cost of traditional check cashers.

A third of the households in Central Texas are unbanked or underbanked, according to the FDIC. These households typically rely on check cashing business for their financial needs, paying fees that can accumulate quickly. From the company’s press release:

According to Bank On Central Texas..the typical unbanked household in Austin pays between $230 and $918 to cash paychecks over the course of one year. Mango customers pay as little as $10.

The brothers hope the Austin store will be only the first of a chain across the country.

Too trendy for its own good?

Jennifer Tescher, founder and director of the Center for Financial Services Innovation, a non-profit based in Chicago, said that the Mango Store should be applauded for paying attention to the customer experience of this under-served portion of the public.

“These are consumers where many businesses don’t really care what they think of the experience,” said Tescher. “Here’s a provider that’s really thinking not only about the offering, but how it’s offered.”

One question hovering over the new store is whether its hip design and layout will appeal to the demographic it serves. But Tescher says that many young people are growing disenchanted with traditional banking, whether because of high fees or the recent banking scandals, and for them the look and feel of the Mango Store may be very appealing.

“Mango has a harder sell for check casher customer. ‘How could that possibly be for me?'” said Tescher. “They’re going to have to figure out how to make the case that it is for them, without compromising on how it looks like.”

BC (Ben) Upham is a freelance writer based in Los Angeles. He has written for the New York Times, and was a writer and editor for News Communications, Inc., a local paper consortium serving Manhattan. When he's not blogging on green issues -- and especially renewable energy -- he's hiking in the Angeles Mountains or hanging out at El Matador.

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