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This is how to become a more successful Fintech company

There are very famous startups that nobody knows exactly what they do and other unknown ones who, in silence, move towards ambitious objectives.

Rebellion Pay belongs to the second category. Founded last year and participated mainly by Gala Capital, Rebellion has become the first Spanish ‘fintech’ to obtain a banking license. In just ten months he has obtained a permit in Lithuania to operate as an Electronic Money Entity (EDE) at the community level, a license that is one step below the financial entity’s level, which would allow him to operate as any bank.

Sergio Cerro, 37 years old and graduated in Business Administration, is in charge of the project. Cerro began his career in small companies as a programmer and then took the leap to entrepreneurship with Mimento, a small project based on sending by post the pictures of the mobile phone that did not finish.

Now, with Rebellion, he takes the lead in something much bigger: a project that is born with a banking license under his arm and is backed, according to sources from the world of venture capital, with an investment of more than four million euros from Gala Capital.

Lithuania is the new Estonia, which in turn was the new Malta

Gala and Rebellion not only share capital, but also building, in Serrano 57, where they have placed Elena de Benavides, number two of the fund, in one of the positions of the board of directors of Rebellion. Finally, both entities share a low profile, very discreet, which practically makes them invisible to public opinion.

However, Cerro maintains that it is a personal project and that soon new investors will enter. The idea came to him observing a market failure: “There is a sector of society that historically has been neglected by traditional banking: minors and young people who have not yet joined the labor market. to use a credit card to buy any service on the internet, say Spotify, Netflix or a simple street scooter, and to use these young people have to go through the drink to go with their father to a branch to give them a card. this is Rebellion” says Cerro.

What differentiates an EDE license (electronic money issuer) from a bank? Cerro answers: “Several things, you can pay anywhere with our card, or through Google and Apple Pay, make transfers and even pay your salary, but we work with segregated accounts, which means that if you give us ten euros, that money.

We can not invest it, nor give credits with it, nor can we pass on commissions of any kind on the client, if Rebellion goes bankrupt, those ten euros would still be available to the client” he explains.

Unable to make money with the classic banking levers, Rebellion has a subscription product underway, in the style of any online service, which will consist of a monthly payment of 3 euros for an account without limitations. “Subscribers will be allowed to move all the money they want, in addition to receiving a physical card and other benefits that we are evaluating,” says Cerro.

Rebellion chose Lithuania for logistical reasons: its banking license allows it to operate in the rest of Europe but it is easier to obtain than in other countries. In short, Lithuania is the new Estonia, which in turn was the new Malta. “In Lithuania, they allowed us to do paperwork at a distance, in addition to giving our lawyers more confidence than Estonia” says Cerro.

One of the requirements of the Baltic country is to establish an office there with local staff, since communications with the central bank are in Lithuanian: “We have financial, compliance people and a ‘country manager.’ It is important that they are local , because there can not be misunderstandings in communications” says Cerro.

They have also subjected the board of directors and the employees to a thorough criminal background and financial viability control. “We had to deposit 600,000 euros, an amount that we will have to expand as new customer deposits arrive” says the entrepreneur. It is important to comply with all the requirements if you want to aspire to obtain a financial institution license in the future.

N26, the ‘bank of the future’, allows to create accounts with false identities J. G. Jorrín The German entity, recently landed in Spain, shows a poor identification system that allows anyone to open an account with a DNI obtained by internet

At the moment, only the N26 Germans have this license. Other popular fintech, such as Monzo or Revolut, have an EDE license, although it took more than a year to get it, while Rebellion took only ten months to complete. Other ‘fintech’ of the national scene, such as the Madrid BeNext, do not have any license and operate through third parties, a business channel that they are also evaluating from Serrano 57.

Create a bank from scratch

Cerro and his team, made up of sixteen workers of different nationalities, are busy these days in the titanic task of creating the minimum banking structures to start working. “It is not enough with the business plan as in a normal company, it is also very important the issue of security, anti-money laundering and anti-fraud policies … all these issues are carried by the Lithuanian team,” says Cerro.

“The Central Bank of Lithuania has completely monitored us: any capital increase, new partner or strategic decision must be communicated and approved, basically they only allow us to hire programmers or designers on our own”, he continues. “It’s very nice, but it also gives a lot of vertigo.”

The referent of the director of Rebellion is Pedro Serrahima, former director of Pepephone

Rebellion expects to start operating its license in summer. Meanwhile, their goal is to begin to be known in Spain and Portugal, where they have detected interest. If all goes well, according to its CEO, by 2021 they will try to enter Mexico and Argentina, where banking penetration is weaker than in Europe. At the moment they have 15,000 clients, but there are days that capture 500 users, usually through ads on Instagram and Facebook.

The referents of Cerro and Rebellion are not the big banks, not even the ‘challengers’, but a figure alien to this world. We talked about Pedro Serrahima, Pepephone’s former director: “What Pedro got was amazing, in a ‘teleco’, they are the way they are, they had all the employees happy, and just like the users, with whom they communicated in a unique way. On top of that, when he left, he stuck with the board of directors to get an annuity paid to each worker. There is a good atmosphere here, and we are going to get our growth dictated, to a large extent, by the opinion of our users”, concludes.


Also published on Medium.

Published inFintechStartupsTechnology

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