Koho a new digital channel based bank based in Canada targeting Generation Y users specifically has announced a new partnership with international card network Visa. The partnership will see prepaid cards issued by Peoples Trust Company (the bank holding funds on Koho’s behalf) run on the Visa network.
The digital bank promises 18 to 34 year olds, a better banking and payment service than traditional banks with its products and services more suited to the digital age and importantly Koho promises there will be fewer and more transparent fees. Commenting on its value proposition, CEO Daniel Eberhard said,
“We think Canadian consumers need to raise their expectations. It’s not just about core functionality; it’s about understanding your financial position and providing the tools to help you improve it. Whether you’re saving for travel, a dog or a house, Koho can help you get there faster.”
Around the world, digital banks are launching promising better services at lower costs. These digital banks have taken different forms and some have even opted offer limited physical in-branch services. While the customer base of these banks has not been explicitly Generation Y users, this is one of the prime demographics given their comfort with mobile banking and payment services. As a result, Koho has the potential to gain traction among this demographic once it launches in early 2016.
Overview by Tristan Hugo-Webb, Associate Director, Global Payments Advisory Service at Mercator Advisory Group
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