When Rohit Mittal first came to the U.S. a decade ago, he didn’t even have a checking account to his name — at least, not an American one.
As a student from India, he had to pay everything with cash and traveler’s checks for at least a week while he got the paperwork he needed from Columbia University’s international students’ office to open a checking account. That’s a process that even today can take a week or longer, stranding new immigrants in an increasingly cash-free world and potentially costing them hundreds of dollars in foreign transaction fees.
“I wasted a lot more time and I wasted a lot more money and I had to ask for a lot of favors of other people,” said Mittal.
Years later, Mittal co-founded Stilt, a San Francisco-based startup that offers loans to H-1B visa holders, DACA recipients and other immigrants who are otherwise shut out of traditional banking because of a lack of credit history. On Thursday, Stilt launched a checking account service that will let applicants open an account using just their passport and visa, unlike most banks, which require a social security number or an individual taxpayer identification number.
More than 16 percent of foreign-born, non-citizen households in the U.S. don’t have a checking or savings account, almost three times the unbanked rate of U.S.-born households, according to a 2017 report from the Federal Deposit Insurance Corporation.
Mittal said the plan is to help immigrants, particularly new arrivals, get an account and a debit card quickly. Not having one can even make it tricky to put down a deposit on an apartment. Many H-1B workers have to spend their first week or longer in the country getting rides from colleagues because it can be hard to rent a car without a U.S. bank account and if they’re relying on whatever cash they brought from home.
“If you want to take an Uber, you can’t. If you want to buy something on Amazon (you can’t),” Mittal said. “It’s better to get this sorted as quickly as possible so you can focus on the things you came here to do. No one came here to open an account.”
For those who bring a credit or debit card issued abroad, fees can quickly become a burden. Mittal said he estimates people in the U.S. with an international debit card pay up to $6 in foreign transaction and currency exchange fees for every $100 they spend.
“As you spend more money, these things add up,” he said.
Mittal said Stilt isn’t done yet — the company is planning to launch more credit options for customers in the future, including ways to build up a credit history.
“The goal is to break down barriers,” he said. “We think we can save customers thousands and thousands of dollars.”