Varo Money applies for bank charter with Comptroller of the Currency

Varo Money was founded in 2015 by Colin Walsh, who spent 25 years working for incumbent financial institutions like American Express and Wells Fargo before deciding to launch a banking product for a new generation of consumers.

Walsh raised USD 27 million from Warburg Pincus. Released recently, Varo’s mobile app tries to provide a new way of thinking about how consumers should manage their money, claims the company.

More than that, Varo provides from a traditional checking account, including direct deposit, online bill pay and a debit card. But unlike traditional banks, Varo is built to be consumer-friendly, doing away overdraft fees, minimum balance fees and ATM fees that most financial institutions rely on.

Through its app, users can manage their cash flow and track their spending across all their savings and credit card accounts, not just their Varo account. The company has also launched a lending product to enable users to take out personal loans that can help them get out of high-interest credit card debt.

Varo Money launched their app through a partnership with The Bancorp Bank. By doing so, it is able to come to market with an FDIC-insured product to compete against the incumbent banks.

But the company has bigger ambitions, and hopes to become a bank itself. As a result, it has applied for a national bank charter through the OCC. In doing so, Varo is joining online lender SoFi in the vanguard of Silicon Valley startups hoping to get licensed so they can offer many of the same products as big financial institutions like Wells Fargo or Chase.