N26 is launching in the US market in 2019

N26
cofounder and CEO Valentin Stalf.
Thomson Reuters

• 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
license 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 $32 billion in payments in the third
quarter of 2018, while eBay-owned PayPal hit $36 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, analyze
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 minimize 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 $160 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 $215 million in total.

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