Nubank: a complete review of the leading Brazilian digital bank

Nubank is the Latin American fintech unicorn

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Nubank: a complete review of the leading Brazilian digital bank. Source: facebook.com

Brazil may not be the first country that comes to mind when you think of fintech, but it’s home to the most promising digital bank. Nubank – the Latin American fintech unicorn – is currently valued at more than $10B and has over 20 million customers.

It is one of the largest credit card issuers in Brazil, one of Latin America’s most valuable start-ups, and by far the largest independent digital bank in the world. Nubank also appeared on the Forbes list of the best world banks in 2019.

Founded in Brazil, Nubank is gradually expanding its operations into neighboring countries. It has already entered the Argentine market and launched its Nu credit card in Mexico this March.

Nubank products & features overview

Nubank products & features overview. Source: medium.com

Digital account NuConta with savings function

The Nubank account is neither a checking account nor a savings account. It is a payment account, which allows the money deposited in it to be invested in Federal Government Bonds and is always earning. NuConta customers can also choose to deposit their money in RDB instead of government bonds.

The free Nubank digital account allows customers making an unlimited number of transfers to any bank. The transfers can be scheduled or same-day (TEDs).

Its unique feature is that the money deposited in NuConta yields interest automatically every working day at a higher rate than savings.

Savings yield in Brazil is set at around 70% of the CDI (an index widely used in the economy that determines the annual return of various types of investment) which currently equals 2,1%. At the same time, the Nubank account yield is 100% of the CDI meaning 2,9% per year.

With the Nubank account, it is possible to separate your saved money from the balance available for use – the customer can activate the Save Money function to do this automatically every month.

Another advantage is that money can be withdrawn at any time without losing income.

Nubank card

Like everything in the Nubank, the contactless card connected to digital accounts breaks all the banking stereotypes.

Instead of having to choose between debit or credit cards, Nubank customers can receive a credit card with an optional debit function.

The credit card is part of the Mastercard brand. Therefore, any purchase made on either credit or debit funds brings points in the MasterCard Surpreenda benefits program.

This function is relatively new. It was added only in 2018,  5 years after the creation of basic products.

The bank card with a debit function connected to the NuConta account is available to every account holder upon online request (for older card versions) or by default (for newer cardholders). However, even in the latter case, users will still be required to activate the card using the appropriate option in the app.

Cash withdrawal

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Nubank customers can receive a credit card with an optional debit function. Source: facebook.com

With the debit card, it is possible to withdraw money directly from the NuConta account at ATMs of the Banco24horas / Tecban network or the Saque e Pague network. Each withdrawal costs R$6.50.

Some limitations apply:

  • Maximum limit of R$2,000 by a single withdrawal;
  • Maximum of R$2,000 withdrawn in a 24-hour period.

At the ATM or self-service terminal, customers may encounter the message that a convenience fee will be charged on top of the standard withdrawal charge. It is determined by the network that controls that terminal and will always be shown to the customer before they confirm the withdrawal.

Reward program

Nubank Rewards lets users collect points that never expire. In addition, you can freely use your points on airline tickets, hotels and restaurants, as well as various products and services from the partner brands. Some examples are Netflix monthly fees, payments on delivery or transportation apps, like iFood and Uber.

Each R$1 spent with the Nubank Card is equal to one point on Nubank Rewards. Sometimes, extra points are added for special promotions, while some partners offer double points for purchases made with a Nubank card.

When you spend your points, the conversion rate is as following:

  • For restaurants, accommodation or Rewards partner services: every 100 points are converted to R$1.
  • For airline tickets: every 80 points convert to R$1.

There are two ways to use reward points to pay for travel tickets: clearing the bill amount or transferring points for miles. The bank partners with Smiles – one of the largest coalition loyalty programs in Brazil that permits the accumulation and redemption of miles for flights operated by Gol and its international airline partners.

  • When transferring to Smiles, each 4 reward points become 1 mile.

The bright side is that you can collect points and sign off even those invoice expenses that occurred until you signed up for Nubank Rewards. If the bill has already been paid, you will receive a credit on your next bill.

The Reward Program brings additional benefits to its members too. For instance, they may get discounts at special partner brand sites.

Nubank Rewards is an optional program for Nubank credit card customers. It has a cost of R$19 per month or R$190 per year – but you have a 30-day free trial period and you can cancel whenever you want through the app.

Mobile top-up

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To recharge, its customers only need to have a positive balance at Nuconta. Source: facebook.com

Since more than half of active cell phones in Brazil are prepaid using online facilities, the bank decided to simplify the recharge process.

To recharge, its customers only need to have a positive balance at Nuconta – without the need to add the debit or credit card number.

Loans

Recently, the company has decided on another initiative to contribute to the financial well-being of its clients. It has started providing personal loans to eligible members.

The function is still being tested. To find out if you can apply for one, just see if the option is available on the home page of your Nubank app. If not, you’ll still need to wait for the update. If the button is grey, that means you’ve met your personal loan limit.

The loan money goes into your Nubank digital account instantly. You have up to 90 days to make the first installment.

The payments for your installments are made via direct debit on your Nubank digital account. All you need is to have enough funds in your account by the end of the due date. You can pay the debt off whenever you want, between 1 and 24 installments. Moreover, if you choose to pay your installments ahead of time, you’ll receive a proportional discount.

You can run a simulation before taking out your loan, and you’ll see exactly how much and when you’ll have to pay. Interest rates are personalized to each customer and can vary according to the month and number of installments chosen during the simulation. This way, having a test loan will help you understand clearly how you should manage your debt.

The simulation takes place in real-time mode: you fill in the credit amount you need, choose the number of installments and see, at the same time, the total interest and the monthly amounts you will pay. It is possible to simulate several possibilities, as many times as you want. Hence, you can find the variant which suits your particular needs and circumstances.

Charge function

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With the Nubank digital account, it is easy to send a payment reminder with all your data. Source: facebook.com

This one is useful for everyone, splitting the bill. With the Nubank digital account, it is easy to send a payment reminder with all your data.

When you enter the owed amount in the Charge data field, you will see a page with a QR code and the option to send a link with your data for transfer. The link can be sent to both Nubank customers and non-users.

Nubank account holders will find it easier to pay back. If the person receiving the link is a Nubank user, they can scan the QR code, or open the link on their cell phone. Then, their Nubank app opens right on the transfer page with all the information already filled in. They just need to enter their password and the money will be sent.

This link can be shared as many times as you want, on any platform you prefer – messaging apps, email, social networks, etc.

Nubank support in times of pandemics

Nubank has announced that it has created a $3.8 million fund to help its customers keep their heads above water during this crisis. It will be available for health and mental care services provided in partnership with Nubank’s strategic alliances.

The bank has teamed up with iFood and Rappi to give credit to customers short of cash and in need of essential goods. The fintech will foot the bill and the cost of delivery.

Moreover, 1,000 remote “tele-appointments” will be paid for in full for Nubank customers by the Sirio-libanés hospital.

Together with online pet shop Zee.now, the neo-bank is helping to feed and keep the domestic animals of Rio de Janeiro and São Paulo.

In addition, the fintech has said it is also looking at how it can relax some personal loan and credit card payments on a case-by-case basis.

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