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Brazil is taking banking services to the next level with the launching of 100% digital services. And Neon is the latest player to arrive in this segment, a bank created by a joint venture between the start-up Controly and the Brazilian bank Pottencial.

Opening a current account with Neon is very easy

Neon is promising to make the financial lives of their users simpler than ever. Through their mobile app, it is possible to open a current account within minutes. All paperwork is left behind (a famous setback when trying to deal with Brazilian banks) as it only asks for a photo ID and the CPF (a Brazilian financial identification number) to create a new account.

When the contact details are approved, the client is prompted to make a R$ 100 transfer to the current account. They also receive an international Visa debit card at home within 10 working days.

The app, available for iOS and Android, has several features, including bills payment. On the other hand, lodgements must be made by boleto bancário – a Brazilian paper payment method.

Neon has also made available to their clients a “virtual” credit card, which can be used for online purchases. But, in contrast to other credit cards, the amount must be paid in full, meaning that paying for the purchase in instalments, a common practice in Brazil, isn’t available – Controly affirms that this measure was created in order to help clients from getting in debt.

There is no monthly fee, but most of the services are paid

Unfortunately, everything comes with a price, and Neon’s clients have to face several fees:

  • Withdrawals: R$6,50 (once per month is free)
  • Transfers between Neon accounts: free
  • Transfers to other banks: R$3,50 (once per month is free)
  • Boleto bancário: R$2,50 each
  • International online purchases: 4% + taxes

Still, the company is promising gradually decrease their fees up to next year. And they don’t charge any monthly fees.

To ensure the security of the transactions, the app is prepared to very identity through fingerprint or facial recognition – but, of course, it depends on the user’s mobile model.

When it was launched, Controly offered only a pre-paid card, which could be managed through an app. The product was successful, and the start-up received investments from several sources, including from bank Pottential. Until now, they have got around R$ 40 million.

But the idea had always been to create a bank, and it was in it that the funds received have been invested so far. With the joint venture, both Controly and Pottential will end their activities and migrate their clients to Neon bank.

Neon will face many challenges

Initially, the new bank decided only to accept 5,000 clients and they have also registered them all. But the plan is to increase this number to 100,000 by the end of next year.

Still, specialists are concerned about how far they can go, due to the lack of mobility in the banking industry (clients use to stay loyal to the same bank even if they are unhappy) and the higher costs of this activity. Besides it, Neon will have to face a growing competition, starting with the already-in-the-game Intermedium, Original, and Celcoin.

But their CEO, the 24-year-old Pedro Conrade, believes that he has the formula not only to offer banking services to a young audience but also to help them to manage their financial lives.

The new bank also defends that it can make a difference by offering an outstanding customer service, something that traditional banks usually lack. Considering this, Neon’s clients get 24/7 support through online chat, Facebook, LinkedIn, Instagram, and Twitter, plus a toll-free phone line.

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