Online app bank Koto Card says it’s preparing to launch in the United Kingdom this month. The digital banking app will let users apply for a free prepaid card and borrow as much as £400 (appr. $523) at one time, while paying 25p per day as they use the credit. Users will also have to pay a monthly fee which will be set at 1% of the borrowed amount.
Customers will also be able to spread out credit of up to £1,000 (appr. $1,300) over a 3-month to two-year period while committing to a loan repayment plan that has a flat £10 monthly fee.
Founders of Koto Card, Dima Dubilet, Misha Rogalskiy, and Oleg Gorokhovskyi, are also the co-founders of Monobank, a Ukraine-headquartered digital bank. The banking service provider reportedly has about 1.6 million clients and has been steadily expanding its user base.
Dubilet, Rogalskiy, and Gorokhovskyi previously worked at PrivatBank and then used their professional experience to establish Monobank in July 2017.
Koto Card comes with three main products and services, which include an electronic money account, and two credit-based products, referred to as “extra” and “spread facility.” The bank also lets clients withdraw funds from an ATM and use the card abroad without paying any extra fees.
Koto Card’s management says it is planning to onboard more customers and is looking to attract investments from third-parties in order to further scale its business operations.
In an interview with Fintech Futures (in November 2018), Koto Card’s founders said that consumers in the UK are “familiar with the concept of mobile-only banking thanks to first movers like Monzo and Revolut.”
The added that “most neo-banks are focusing on current accounts or payments, and we think that there is still a gap in the market for a challenger focused on credit products.”
The company founders had been planning to obtain approval and an operational licence for their business from the UK’s Financial Conduct Authority by the first quarter of 2019.
Koto Card developers are reportedly self-funded.