Brazil fintech Nubank reaches 1.5 million digital accounts

SAO PAULO, June 13 (Reuters) - Brazilian financial technology company Nubank said on Wednesday it has started to offer digital bank accounts to people beyond its existing client base of credit card holders, as it ramps up competition with traditional banks.

Nubank has already signed up 1.5 million customers to digital accounts during a test period limited to a portion of its 4 million existing credit card holders, Chief Executive David Velez told Reuters.

Better known for its fee-free purple credit card, Nubank launched digital bank accounts in October 2017 as part of a plan to offer a broader range of financial products.

The initial 1.5 million client base means that Nubank is already bigger than Brazil’s largest purely digital banks, such as Banco Inter SA, Banco Agiplan SA and Banco Original SA. It still lags far behind Brazil’s top two lenders Banco Bradesco SA and Itaú Unibanco Holding SA , which have more than 20 million clients each.

Nubank is a payment services provider, not a bank, so its accounts offer a smaller range of services than a traditional lender but have the advantage of being free. Services include transfers, payment of bills and savings.

Velez said Nubank will launch more financial products in the coming months, without specifying the types of products. Digital bank accounts have a leading role in attracting customers, he said. Due to strict credit checks, the issuance of credit cards is denied to many Brazilians, limiting Nubank’s reach.

Nubank has already raised $330 million in six financing rounds aimed at expansion.

Reporting by Carolina Mandl Editing by Chizu Nomiyama