For foreign banks and digital upstarts, the U.S. consumer banking market has come to look more like a trap than an opportunity. Spain’s second-largest bank, BBVA, sold off its U.S. business to PNC in 2021. Berlin-based N26 retreated the same year, two years after arriving. London-based Monzo called it quits four months ago, while Revolut is making another run at U.S. customers, this time by seeking a bank charter. Even Chime, the strongest homegrown digital challenger, has a sub-5% market share after 12 years of tireless effort and billions of dollars in investment.

Now one of the industry’s savviest competitors, Brazil-based Nubank, has decided to test the terrain that has chewed up so many others. In January, it received conditional approval for a federal U.S. banking charter. The milestone set off a regulatory timer: Nubank must inject equity capital into its U.S. bank by February 2027 and open its doors by the middle of next year.

The innovative digital bank might just have the best shot yet at cracking the U.S. market, and it plans to do so without compromising the financial discipline and results that have earned it a $68 billion market value, up from $38 billion when it went public on the New York Stock Exchange in December 2021. Launched as a credit card in 2014–an era when five slow-moving, fee-happy banks had cornered 80% of the Brazilian market–it has gone on to attract 115 million customers there. It has 15 million more in Mexico, plus nearly 5 million in Colombia. Last year, Nubank brought in $16 billion in revenue and turned that into an impressive $3 billion in net profits, helped by a digital-first model that keeps servicing costs low.

David Vélez, Nubank’s 44-year-old cofounder and CEO, is a Medellin, Colombia-born father of five who worked as a private equity investor and earned a Stanford MBA before deciding he’d rather start his own company than invest in others. His gamble has turned into a $13 billion fortune, making him the second-richest Colombian. He has acknowledged there’s “much, much bigger” consumer banking pain for newcomers to address in emerging markets than in the U.S. Yet he chuckles at the idea that Nubank can’t succeed here.

He recalls that 13 years ago, when he was walking around São Paolo, he counted 93 bank branches on Faria Lima Avenue, the city’s banking hub. Local experts and investors pointed to those storefronts and said, “There is no problem to solve here. What are you doing?” He later heard the same arguments before entering Mexico and Colombia but discovered that experts’ impressions didn’t match what........

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