New challenger bank caters to freelancers, gig workers

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Oxygen, a new digital bank founded by Hussein Ahmed, hopes to be a breath of fresh air for freelancers and entrepreneurs.

It opened to the public on Thursday, and its app is available to download from Apple and Google. It bills itself as a bank for U.S. professionals who draw their income from multiple sources, including contract work and freelance gigs.

Hussein Ahmed, CEO and founder of Oxygen
Hussein Ahmed, CEO and founder of Oxygen, says his banking app for entrepreneurs has been getting about 300 new customers per day.

The company says its services will be in demand as the pandemic accelerates a shift away from traditional W-2 employment and consumers explore new work opportunities.

“A lot of jobs will not be coming back next year,” said Ryan Conway, head of business development at Oxygen. “As people are looking for their next employment opportunities, we think a lot of those people are going to try freelancing, and they're going to need a bank that understands their unique challenges.”

It will offer personal and business banking accounts in conjunction with The Bancorp Bank, based in Wilmington, Del.; it will also offer credit and loan products. The service has been in soft launch with The Bancorp Bank since January. Previously, Oxygen was backed by Evolve Bank & Trust.

Customers start by signing up for a personal bank account in Oxygen’s mobile app. If they like, Oxygen will then walk them through the process of forming a limited liability company with its partner CorpNet, an incorporation service, and set up a business bank account for them as well.

The goal is to help users keep their personal and business finances separate, as well as protect their personal assets with an LLC. Customers can easily toggle in the app between their two bank accounts, distinguished by different color schemes.

Ahmed would not say how many users Oxygen has but said it has been adding 300 accounts a day recently.

Although Oxygen offers some of the same draws as other challenger banks, such as no monthly fees or overdraft fees, the bank doesn’t lead with those features. Instead, it sees itself as catering to higher-earning clients who don’t need early access to their paychecks, Ahmed said.

Oxygen also plans to add invoicing tools and tax services that will benefit gig workers and small-business owners.

In February, Oxygen applied for — and was later accepted into — the Visa Fast Track program, which is meant for fintechs that are ready to issue cards and have held at least a Series A funding round or have raised more than $1 million.

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