International payments provider LemFi has acquired UK credit fintech Pillar to accelerate its mission of empowering immigrant communities with fair, fast and accessible financial services.
LemFi, which recently integrated credit into its core remittance product, says that the Pillar opens the door for more specialised credit services and cards designed specifically for immigrants. The acquisition not only sees it able to access Pillar’s technology and FCA credit licence, but also sees Pillar’s co-founders and Revolut alumni Ashutosh Bhatt and Adam Lewis join the LemFi team.
“With this acquisition, we plan to offer Credit Cards to customers, starting with the UK and roll out the full suite of LemFi Credit features publicly,” said Ridwan Olalere, co-founder and CEO at LemFi. “Credit forms a critical part of our vision of building a full-stack financial service for immigrants everywhere, and Rian and I are particularly pleased that Adam and Ash have agreed to join us in building it. ”
Credit invisibility
Pillar’s alternative credit-scoring model uses global credit insights and non-traditional data to solve issues for those who are ‘credit invisible’, assessing eligibility and helping users build a financial footprint.
In the UK alone, around 64 per cent of adults have at least one credit card and every month 83 per cent of the population uses some form of credit or loan product, making up an $875million market.
However, around five million people are ‘credit invisible’, rising to nearly 30 million in the US. Regardless of financial standing or employment, their lack of credit history makes them four times more likely to be excluded from essential services like loans, credit cards, and mobile contracts than the general population.
With one in seven UK residents born overseas, and the majority of newcomers planning to stay long-term, it’s a challenge that looks set to grow.
Ashutosh Bhatt, co-founder of Pillar, said: “Despite earning a good salary at Barclays, I couldn’t access even the everyday products I’d had in India. I couldn’t get an iPhone, let alone a credit card. There have been slight improvements, but we still can’t offer equitable access to bank accounts or credit cards to someone from another country. I’m excited for the impact we will have together with LemFi to increase reach by 10x and build truly global access to credit.”
Offering a solution
Founded in 2021, LemFi started with payments and remittances, enabling users to open multi-currency accounts and send and receive money globally, reliably and at a low cost.
With over two million customers across the US, UK, Canada, and Europe, $1billion in monthly transaction volume, and with expansions in Asia and Latin America, this approach has seen the platform grow 30 per cent month-on-month.
Recognising increasing demand for credit services, it launched its first credit offering, LemFi Credit, which amassed over 8,000 users just six weeks into its private beta, growing 18 per cent week-on-week. Customers receive a virtual card, instantly usable via Apple Pay or Google Pay.
These cards will leverage Pillar’s technology to:
- Recognise international credit histories, allowing immigrants to ‘import’ their credit standing from their home countries
- Provide alternative credit assessment using non-traditional data points to evaluate creditworthiness
- Offer graduated credit building, starting with secured or limited-line products that grow with the customer
- Integrate with remittance services, combining Lemfi’s core cross-border payment capabilities with credit building
