- German fin tech company N26 is expanding its mobile banking services into the US market sometime in 2019.
- The digital bank is a mix of Venmo, Zelle, Intuit’s Mint, and a Chase banking account, said Nicolas Kopp, U.S. chief executive officer of N26.
- N26 is going up against a number of US incumbents as it tries to take a slice out of the lucrative market for mobile banking and payments.
German digital bank N26 is expanding its mobile banking services into the US market as it eyes the next step in its global expansion.
”We want to build a global bank,” said Nicolas Kopp, U.S. chief executive officer of N26, in an interview. “We want to be a Netflix [in] banking, where you need a global presence. The US, in terms of population size and revenue pool, is one of the biggest markets in the world, and most importantly, it is a very fragmented market.”
To do this, the Berlin-based company is partnering with an unnamed US bank sometime next year.
N26’s US-focused product is still under development, but its initial launch will have a similar look of the European app. Certain features will be updated to cater American consumers in later versions.
“It is a mix of Venmo, Zelle, Mint, and, frankly, Chase banking account, which is your debit account,” Kopp said. “That is really cool about the app because it aggregates all the services in one app.”
N26 currently operates in 18 markets and has a full banking licence from Germany regulators. It recently launched in the UK as part of its rapid expansion in Europe. It is processing over 1 billion euros in monthly transactions and has 1.5 million active users.
Still, that’s relatively small compared to US incumbents on the payments side.
Zelle processed $US32 billion in payments in the third quarter of 2018, while eBay-owned PayPal hit $US36 billion in payment volumes in the quarter.
But Kopp said N26 will win over the American customers because the company offers more than just a payments network.
“Venmo and PayPal are very niche in what they do – it is very convenient for peer to peer payment,” Kopp said. “But N26 offers a fully-fledged banking account … The breadth of services you can use is higher than Venmo. “
N26 not only offers a checking account and a Mastercard debit card but also allows users to track expenses, analyse spending statistics and check saving scores. Through its partnership with a U.S. bank, the company also expects to enable cash machine withdraws across the country.
A so-called challenger bank, N26 doesn’t operate brick-and-mortar branches because its customers “prefer to minimise interactions with their banks.” It has around 500 employees, with the majority of them being engineers and designers, instead of bankers.
N62 is backed by investors including billionaire entrepreneur Peter Thiel and Horizons Ventures, the venture capital business of Hong Kong billionaire Li Ka-Shing. In March, it raised $US160 million in a fundraising led by Allianz X, the investment unit of Allianz Group, and Tencent, China’s tech giant behind WeChat and mobile payment service WeChat Pay. The firm has raised $US215 million in total.
- Fintech companies are quietly shaking up the banking industry – and big payments companies should be scared
- JPMorgan has signed a deal with technology firm Plaid for customer data sharing and it represents a big development for how the largest US bank thinks about fintech
Business Insider Emails & Alerts
Site highlights each day to your inbox.