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With TransferWise, Novo extends its marketplace banking approach

Suman BhattacharyyabySuman Bhattacharyya
September 27, 2019
in Banking, Payments, Strategy
Reading Time: 2 mins read
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New York City-based business banking startup Novo is growing its partnership model to attract and retain customers.

This week, digital-only Novo integrated with money transfer service TransferWise to allow its clients to send money across borders through Novo’s mobile banking platform. To Novo, which was founded in 2016 and so far has signed on “a few thousand” customers, integration with third-party providers is a means to add new services to its platform and turn its app into a financial control center for customers.

The tie-up with TransferWise marks Novo’s latest integration with third-party platforms, building on earlier partnerships with payments company Stripe, accounting software Xero, automation platform Zapier and messaging service Slack. Novo’s customer base includes entrepreneurs, startup founders and freelancers, and its marketplace approach lets them fuse banking with an array of additional business services in one place.

“The longer-term vision of Novo is to become a financial watch tower over our small businesses,” said Michael Rangel, Novo’s founder and CEO. He added that its strategy is to connect with “best-in-class” service providers, a model that’s helped large European banking startups like Revolut and Monzo become successful in their home markets.

Along with Stanford Federal Credit Union, Novo was one of two inaugural partners of TransferWise for Banks, an offering that allows banks, credit unions and other financial institutions to integrate TransferWise’s API directly into their infrastructures so customers can make international payments directly through the partner’s mobile banking app. For TransferWise, working directly with banks and banking startups helps it extend its reach beyond its direct-to-consumer offering.

“By plugging into our API, Novo and Stanford Federal Credit Union just became the fastest and cheapest to use in the U.S. for international payments,” said TransferWise CEO and co-founder Kristo Käärmann, in a statement. “We’re excited for this to be the first of many bank partnerships in the U.S.” TransferWise also has partnerships in Europe with Monzo, Bunq and N26.

According to Rangel, Novo’s approach is to continue to work with partners, particularly when its customers ask for access to such services to be offered within Novo’s platform. “Some of the other strategies that we will be targeting are integrations with different business partners, like business service verticals, because the average SMB has to log into seven different online portals,” he said . “Banking in the U.S. has always been siloed, and we’re flipping that model on its head.”

Tags: NovostartupsTransferWise
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