Neobank for the 62+ audience touts early social security withdrawals

It is a new neobank for people aged 62 and over.

The idea is counterintuitive, given that many fintech entrepreneurs talk about technology as the way to reach younger customers. But Charlie, which launched Tuesday, has a specific advantage to appeal to that audience — early access to Social Security benefits — and the belief that older consumers are more receptive to digital solutions today than in the past.

“We believe that a growing number of those in the 62-plus community prefer a solution that is tailored to their unique needs,” Kevin Nazemi, co-founder and CEO of Charlie, said via email. “The pandemic made it necessary to use technology to access health care and communicate with loved ones. If someone retired in the last few years, their farewell party was probably over Zoom.”

Charlie will be available as an app and via the desktop. Features include a fee-free deposit account that pays 3% on all balances and a debit card. It will also offer a form of “early payment”, but in this case users can withdraw their Social Security benefits up to four weeks early at no cost. Social security benefits are usually paid in the month following the month in which they are due. After users confirm they are receiving Social Security payments and transfer their direct deposit from Social Security to their Charlie account, they can request early access on or after the first of the month. Charlie will then move the funds into the customer’s account and get the money back when the scheduled payment comes in from the Social Security Administration.

The primary way Charlie will make money is through brokerage fees.

The three co-founders also selected or designed navigation, font sizes and color contrasts intended to be accessible to those with visual or physical disabilities. They designated their mothers to be early adopters and testers of Charlie as well. The name “Charlie” is meant to evoke a “smart, kind and trusted nephew who is in the know, but not a know-it-all,” according to the co-founders.

Customer service will be based in the US. The co-founders selected Alloy for know-your-customer verification, user authentication company Okta for authentication, and Galileo Financial Technologies for transaction monitoring and additional know-your-customer checks.

The underlying deposits are held at Sutton Bank, which has $1.8 billion in assets and is based in Attica, Ohio.