Las Vegas-based startup Pomelo hopes to change money transfers


Sending money to family members living abroad can be expensive and stressful, but a Las Vegas-based startup hopes to change that experience.

Founded by CEO Eric Velasquez Frenkiel, Pomelo offers customers a credit card that can be used by friends or family members in other countries, making it easier to transfer money across borders in a way faster and more secure.

“Pomelo was founded at the very beginning of the pandemic to reinvent the transfer of money by credit instead of sending money for the very first time,” said Velasquez Frenkiel.

Pomelo – named after the citrus fruit native to Southeast Asia – was beta tested this year but officially launched its service last month and says it is the first company to combine credit and money transfer. The company is associated with Mastercard and currently serves the Philippines, although it plans to expand to other countries.

Pomelo was launched as a way to solve the problems that arise when US residents try to send money to family members overseas – high fees and the risks of recipients getting back large sums of money in person – but he also operates a lucrative market.

There is a lot of value with global remittance flows or money sent to people in other countries. The market is expected to grow 4.2% this year to $630 billion, according to the World Bank. He said the average transfer fee is 6% when sending $200, starting in the fourth quarter of 2021.

Creating an easier way to transfer money could be huge for the global economy, says UNLV associate professor Hans Rawhouser, who thinks what Pomelo is doing is unique.

“There are many countries that are very dependent on remittances. It’s a big chunk of their GDP,” Rawhouser said. “Especially small countries that have a lot of people emigrating to the United States.”

Christine Rockwell, board member of the Asian Chamber of Commerce in Las Vegas, said sending money to extended family in the Philippines is often stressful and complicated. When her family sends money, they often pool the funds and send it in one large sum to avoid multiple fees.

But there are still concerns even after the funds are sent, she said, adding that the places where her family in the Philippines can receive the money are often targets of theft.

“This place where the money transfers usually happen…there’s a lot of security involved, and you think ‘I have to be careful,'” Rockwell said. “But with the cards, I think it just makes it easier. It’s something we’ve always thought about, ‘When can we use a card?’ …so it’s, I think, really groundbreaking.

“Personal Mission”

Sending money to his family is a process that Velasquez Frenkiel knows well, and is the reason he started the business.

Pomelo was supposed to address a “personal issue” he noticed while preparing to return to the United States from the Philippines during the pandemic.

“I was like, ‘Well, I’m going back to the States to pay this credit card bill. Why can I just leave a card with my family (in the Philippines), instead of sending money every month via Western Union? said Velazquez Frenkiel.

The Henderson resident said now “in about five minutes someone can sign up (in the US) and ask someone to buy something online in the Philippines.”

“It’s transformative,” he said.

If someone wants to send money overseas using Pomelo’s service, they can apply for a credit card on the company’s website. Depending on his credit history, the applicant may be required to pay a security deposit. The applicant can then add up to three authorized users who live abroad. Beneficiaries will receive a credit card within 10 days and the card can also be used online with the balance paid monthly by the applicant.

Velasquez Frenkiel said Pomelo offered $1,000 in unsecured credit to its customers. An individual can also set spending limits on the card, which has no interest rate and acts as a charge card.

Pomelo’s transfer fee does not exceed 1%, as it passes the costs on to merchants instead of cardholders.

Velasquez Frenkiel said merchants are willing to pay the fee because it encourages faster payments, more e-commerce opportunities, and less risk of fraud or theft that can occur with businesses that rely primarily on cash. liquid.

Rawhouser thinks passing the fees on to merchants could be an “ingenious” idea if merchants are willing to take on the fees.

Currently, only credit card and online transfers are available to Pomelo customers, but Velasquez Frenkiel said he may create a cash option such as ATM withdrawals in the future.

Raise funds

This isn’t the first time Velasquez Frenkiel has founded a technology company. The former Meta Platforms Inc., formerly Facebook, engineer co-founded data platform SingleStore in 2011, then left after seven years to focus on building a consumer-centric company.

Pomelo announced last month that it had raised $70 million in seed funding, with $20 million in equity funding and $50 million to cover credit card balances, according to Velsaquez Freinkel.

Its funding round was led by Keith Rabois, general partner of the Founders Fund, and Kevin Hartz, co-founder of Xoom Corp. and general partner of A*Capital, along with Afore Capital, Xfund, investor Josh Buckley, the Chainsmokers and singer Abel Tesfaye, also known as Weeknd.

Pomelo has “a fair start with the funding package that allows us to access the market with our Philippine corridor,” Velsaquez Freinkel said.

According to Rawhouser, positioning Pomelo as a new service could allow the company to be a leader in the field, but it could also create more competition.

“It just adds to the market for credit card services in the Philippines,” Rawhouser said. “But I imagine other credit card companies would start copying…hopefully before that happens they are able to build a brand and be seen as genuine, trying to solve a problem for migrants and their families back home.”

Velasquez Frenkiel said one of Pomelo’s main goals was to help immigrants establish their credit scores in the United States.

“For many of our customers, Pomelo is their very first credit card here…but also their family’s very first card overseas,” he said.

Building credit as an immigrant can be difficult, said Rockwell, who recalls not being able to get a credit card from a big company when she moved to Las Vegas 20 years ago. .

“No one will give you an ordinary card,” she said. “And you only care about building credit, not necessarily the process, all I know is you have to open a credit card.”

Even though Pomelo initially only serves the Philippines, it still supplies a large customer base. The Filipino community in the United States numbers more than 4 million people, and Las Vegas has the sixth-largest Filipino population in the country, according to the Pew Research Center.

Velasquez Frenkiel said he plans to expand into Mexico and India, but doesn’t have a set timeline.

“We are committed to growing Pomelo, at a healthy pace, but we are really looking to make sure we can bring value to the Philippine corridor before we look to expand into Mexico and India,” he said.

Contact Sean Hemmersmeier at shemmersmeier@reviewjournal.com. Follow @seanhemmers34 on Twitter.

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