German digital bank N26 is débuting in the United States through a phased rollout of its checking account and debit card services accessible through an app, according to the bank on Thursday.
The company’s U.S. junior firm N26 Inc will begin offering its services to the 100,000 customers on its U.S. waitlist over the next few weeks. It will fully launch to the public later this summer, the digital bank said.
N26 is one of Europe’s most popular “neo banks” that were established over the past few years to contest traditional banks through way of offering more user-friendly services digitally.
The company has amassed 3.5 million customers in over 24 European markets since it launched in 2015.
It has raised more than $500 million from multiple investors such as Insight Venture Partners, Tencent, and Valar Ventures—owned by Peter Thiel.
N26 has a banking license in Europe, while in the United States, it is débuting by a partnership with Axos Bank, which is a member of the Federal Deposit Insurance Corporation (FDIC).
“As a long-term strategy I could see us getting a license (in the U.S.), but we are not in a rush,” U.S. CEO N26 Inc Nicolas Kopp said during an interview.
The U.S. app will have many of the features that allowed N26 to become popular in Europe like the ability to create sub-accounts it named “spaces,” Kopp added.
There will be no minimum balance required or any monthly charges according to the CEO.
N26, over in the summer, will be offering two free withdrawals per month at various ATMs countrywide and will, later on, launch a premium account.
The U.S. launch of N26, which comes less than a month after British digital bank Monzo rolled out its overseas services, has been anticipated for about 2 year now.
Furthermore, N26 will establish rivalry from local digital banks, digital offshoots alongside well-established U.S. banks, and an escalating number of fintech startups who have already ventured into banking services.
N26 Heads for War as Deutsche Bank Retreats
This week, largest German bank, Deutsche Bank, announced a withdrawal from the U.S. market. Following this is N26 desire to launch aiming to compete with American banking pioneers.
Particularly, while the European market has a growing fintech sector, the American market is still dominated by leading universal banks, which the Deutsche Bank used to be.
The likes of JPMorgan, Citigroup, and Bank of America hold a vast market share.
Paypal’s Venmo and Square’s Cash App are getting installed on millions of phones in the U.S. each month.
Startup bank Chime has a reported customer base of over 4 million and continues to splash on cash on referrals—giving current customers and new customers $50 each when they sign up
“We looked at 30 players, we did some due diligence and we’re happy to partner with Axos Bank. The deals that you get in the U.S. for white-label banks are much more favorable than in Europe,” N26 co-founder and CEO Valentin Stalf said.
“It’s a setup for the longer term. It’s good for a couple million customers,” Stalf added.