Growing up in Terry, Mississippi, Sheena Allen didn’t spend much time in banks.
The small town, located 17-miles south of Jackson, only had one bank branch (and still does). Much of the community got by without ever having accounts, including Allen’s grandmother and great grandmother. They relied on fee-heavy solutions like payday loans and check cashing services.
Allen, a 29-year-old app developer, hadn’t given much thought to the issues associated with not having a bank account until she came home for the holidays in 2015. She noticed how the people who still rely on non-traditional banking lose money on interest and fees for cashing checks, reloading prepaid cards, and borrowing and lending money. Without a bank account, they had difficulty establishing credit scores, buying homes, and saving for the future.
After years of living in a few large US cities, she unexpectedly found her biggest business idea back where she started.
In 2016, she started working on CapWay, an online banking and financial literacy app that aims to help the unbanked, underbanked and people living paycheck to paycheck.
“I know this problem from a personal point of view, from my family and friends, but I didn’t know this problem from outside of Mississippi,” said Allen, who spent a year traveling around the US researching the issue.
Users can connect existing accounts to the app or get a pre-paid card from CapWay, which Allen says will have a lower rate than most other cards currently available. It will make custom suggestions based on an individual’s spending habits, such as pointing them to a state-run program that can help renters become homeowners or telling them how to avoid overdraft fees. The ultimate goal is to change behavior and transition users to a proper bank account.
Although anyone can use the app, it is targeted toward Millennials who aren’t yet set in their ways to “stop them from going into a cycle that’s really hard to get out of,” she said.
CapWay is still in the testing phase. It will first roll out to iOS, Android and mobile web users in Mississippi, which has the highest population of unbanked and underbanked residents. When it launches nationally later this year, CapWay will partner with schools, employers, financial institutions and community organizations in the South to reach the people who need it.
Allen says the company will make money off paid partnerships, fees from pre-paid cards, and sponsored content and advertising.
Allen says CapWay is making sure its educational content easy to understand and tailored for its audience.
“In the end, education and understanding money along with giving them to tools to put that education to use will be the shift. You can’t give people one part and not the other and expect to see a big change,” said Allen.
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