German neobank N26 failed to expand in the USA. Last week, the establishment expressed it by announcing its departure from the market on January 11, the date on which 500,000 accounts will therefore have to be closed. After two and a half years of work to establish itself in the country, the administrative difficulties and the differences in terms of customer expectations compared to Europe got the better of the hasty departure.
It all started well though. The start looked promising for N26 in the United States. And according to its division in press relations, until 2021, hopes for a solid place in the United States were intact despite the departures of several key figures of the company, such as the company’s US CEO, Nicolas Kopp.
Don’t underestimate the complexity
“If you had asked me four years ago, I would have said that we would launch into a new market every year, but it’s quite complex like that, and you should not underestimate this complexity”, reacted last week the co-CEO of N26, Max Tayenthal. “In our industry, the level of synergy moving from Europe to the US is not like WhatsApp which you can internationalize easily. […] We had to build the bank from scratch with different licenses, agreements and payment rails ” he added.
In recent weeks, N26 has been linked to a massive fundraising of 900 million euros to highlight its determination to continue investing and expanding in Europe. The last time fintech had called for a financing transaction was in May 2020.
However, the announcement came at the same time as that of the latest restrictive measures by BaFin (German Federal Financial Supervisory Authority). This penalized N26, after a fine of 4.25 million euros, by limiting its growth by an acquisition ceiling of 70,000 new customers per month. The reasons: between 2019 and 2020, the establishment left the door open to abuses in money laundering.
N26 has already said no to the United Kingdom, some time after Brexit, offering more or less identical apologies to those explaining today his departure from the United States. In France, the neobank has 2 million customers. Its objective is to reach 5 million before 2024. This will have to go through a refinement of the offer to be able to offer services to make each account a daily bank account.
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