ImpactAlpha, May 2 – Roy and Bertrand Sosa founded Netspend during the dot-com boom. Their innovation: prepaid debit cards.
“We thought, how are people that don’t have bank accounts, debit cards, credit cards, going to pay on this new thing called the Internet?” Roy told ImpactAlpha.
Fifteen years since leaving the fintech pioneer, the brothers are back at the helm. Their fintech venture, Rev Worldwide, acquired Netspend from parent company Global Payments, for $1 billion in cash.
“This acquisition represents both a reunion and reimagining of the vision of financial empowerment we pioneered at Netspend more than 20 years ago,” Roy said.
Private equity firm Searchlight has taken a minority stake in what marks the firm’s first impact investment.
The Sosas founded Rev in 2016 to make multi-currency processing easier across borders. They envision a broader suite of financial products for underserved and underbanked individuals, particularly the Latino community in the U.S. by bridging Netspend’s physical footprint with Rev’s digital services.
The brothers are keen to seize on the Mexican-American population boom, the surging remittance economy, and Americans’ tourism spending in Mexico. They’re planning better-priced and more efficient cross-border payments, savings products, insurance and access to credit, “to empower consumers and nano and small business owners,” said Roy. “We’ll put everything on the table to solve for exploitation and really deliver on financial inclusion.”
Since launching in 1999, Netspend has built a network of more than 100,000 grocery stores, financial service centers and other retail locations where consumers can buy prepaid credit cards.
The Austin-based company went public in a 2012 IPO. A year later it was acquired by payment processor Total System Services, which was bought by Global Payments in 2019.
“Suddenly you have Netspend nested under these two parent companies like a Matryoshka doll,” Roy told ImpactAlpha. “And those two parents are B2B companies that have no real intention to be a direct-to-consumer, heavily regulated, financial inclusion type of business.”
Rev and Searchlight bid on Netspend when Global Payments put it up for sale last year.