Staffing platform expands its financial offering by launching prepaid cards for Mexico, Brazil and Argentina to attract foreign workers at lower rates
Deel, the US-based foreign worker recruitment and payment startup, has unveiled its prepaid card program for several Latin American countries, joining its cross-border payroll offering through banks and e-wallets available on its platform.
The rise of telecommuting and international recruitment is challenging financial institutions to offer products with multi-currency coverage, although local regulations and tariffs are the biggest obstacles to offering fast and low-cost services to self-employed workers.
The platform, which is present in 120 countries, has based its rapid growth on the rise of digital nomads, who work in different fields without being limited by geography, and freelancers in their countries of origin: a significant phenomenon, where it is estimated that some move 35 million international workers with Latin America at the top of the lists.
“That’s where the fintech part comes in. More than that core business, is that we serve people who need human resources and financial infrastructure as a solution,” he says Iupana Natalia Jimenez, commercial director of Deel.
About 4 out of 10 digital nomads are freelancers or self-employed, according to a 2023 Statista survey. Jimenez explains that the platform handles the entire process from hiring, maintaining work obligations and payment, making currency conversions and payments to local and international banks, using the SWIFT network or fintech companies such as Payoneer, Revolut or PayPal. Even on crypto exchanges like Binance or Coinbase.
To strengthen their own financial offering in this space, in late June they launched a physical Deel Card available in 20 countries, including Brazil, Chile, Argentina, Mexico, Ecuador and Colombia. A card was issued, which has been available in a virtual version since 2022 in association with Airwall global financial platform.
In addition, they offer the possibility of dividing the amount in several ways: half to the wallet, and the other half, for example, to top up a prepaid card.
The fintech profitability model is based on currency exchange profits. In addition, the company claims that it is a tool to improve the experience of employees and employers.
“Despite the fact that the course is very competitive, there is a percentage of profit on the card. The percentage is low. (…) but here you win. Although, equally, compared to the costs of the SWIFT network, for example, or the costs of PayPal, they are usually lower,” Jimenez clarifies.
Deel: Extension and questions
Since 2019, Deel’s rapid expansion has been beset by questions often compared to the rise of Uber or Airbnb. It has reached a peak valuation of $12 billion in 2022, backed by multinational clients such as Nike and Subway. It is now planning an IPO for 2025.
However, critics question whether the company has taken regulatory shortcuts. Its CEO, Alex Bouaziz, got to visit the US Capitol last year to clarify that he did not violate labor laws by hiring his own crew, who were recorded in the notice as self-employed and not full-time workers. The company said this was due to a bug that has since been fixed.
From Colombia, Jimenez says they comply with regulatory requirements in every country where they issue a prepaid card.
“That’s why this launch is so important. The fact is that each country has different certificates and regulations. Although it is an international card (…), it is regulated in each of these countries so that it can be entered and used,” he assures.
Other companies like Wise, Nomad and C6 They have also deployed their solutions to capture nomadic dollars in an increasingly competitive market segment as the labor landscape also changes to favor employee retention.
Willingness to quit in Latin America declined during 2023, but remains high compared to global averages, with 34% of employees saying they are willing to seek new opportunities to access better compensation packages amid the rising cost of working life. according to EY’s annual benchmarking study.
To strengthen its offering, Deel also provides a salary advance service in the form of “advance payments” for some of its customers.
“Within the platform for independent people, if they have been with us for a while and have a certain frequency, and the customer has also passed a certain checks trust, we allow them to pay in advance,” concludes Jimenez.