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A new digital banking platform has started offering the first halal-certified banking experience in the U.S., by promising interest-free lending and investments.
Fair is a “neobank”, or digital-only bank, that practices principles in line with Islamic law, which forbids usury or collecting interest on loans. Fair’s customers can conduct business through its app, where customers can find a range of financial services based on Fair’s guiding principles. Every service is available for a one-time joining fee.
The new bank’s digital finance platform is the only one in the U.S. certified in Islamic Finance by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI). The system is also FDIC-insured.
Customers can also avoid hidden fees and pay no fees for international money transfers. Wire transfer fees average about $45-$50 for transfers going outside the U.S. Fair also offers free ATMs and teller services and debit cards for children.
Through membership, customers can get access to “wholesale prices”, much like retailers such as Costco. The bank was launched this month with commitments of more than $20 million from independent investors.
The neo banking market was $20.4 billion in 2018 and is predicted to reach $471.0 billion by 2026. Fair says it has created the halal financial tech platform to also address halal-certified banking practices that contribute to the wealth gap and accessibility to financial instruments by underserved populations.
The one-time membership fee — $99 paid-in-full or installments — grants unlimited access to all Fair online banking and financial services, including interest-free lending, investments, and insurance in one platform. Fair customers also avoid banking fees, which Americans pay an average of $329 every year. Hidden bank fees cost Americans $11.6 billion during the first three months of the COVID-19 pandemic.
