N26 is exiting the United States.
Founded in 2013 and boasting over 7 million customers, N26 is a Germany-based neobank bank that had sought to establish operations in the USA – a market that is home to thousands of small and large traditional banks as well as numerous Fintechs and several chartered digital banks. In the end, the extreme fragmentation of the market and cost to make inroads appears to have been too much for the European Fintech. According to a blog post, N26 has decided to focus its efforts on the European market.
N26 stated:
“For the past two years, we’ve had the pleasure of providing our 100% mobile banking experience the world loves to hundreds of thousands of people in the US. It is with gratitude and appreciation to all who have joined in our journey that we have made the decision to sharpen our focus on our European business. As a result, our product will no longer be available to customers in the US after January 11, 2022, and we will be closing all accounts. No other markets in which N26 operates will be impacted.”
Like many Fintechs that offer bank-like services in the US, N26 has partnered with Axos Bank to offer bank accounts as well as a Visa card.
N26 said that its 2 years of trying to break into the market will provide important lessons for the future.
For US-based N26 account holders, further instructions will be forthcoming as to how to migrate funds as the company winds down. Accounts will operate as is until January 11, 2022.
N26 is not the only European neobank operating in the US. Monzo and Revolut are well-known names in the UK as well as continental Europe. Yet both have struggled to gain a significant foothold in the highly competitive market. Earlier this year, Monzo announced it had decided not to pursue a national bank charter – for now. Apparently, Revolut is still working towards a national bank charter – a process that is arduous, to say the least, and a journey that takes years to complete.
In the meantime, the Biden Administration has taken a less welcoming position on Fintech and approval of digital banks in general – meaning already chartered digital banks should see less competition in the near term.