German Challenger Bank N26 Reaches 1 Million Users on the Heels of U.S. Launch
PREMIUM — The German challenger bank N26 surpassed one million users, the bank announced yesterday — a significant feat for any neobank. The bank has doubled its customer base since last August.
To put this in perspective, U.K.-based challenger bank Revolut, which just last month reached unicorn status thanks to a $250 million series C funding, claims about two million users.
Berlin-based N26, which is busy preparing for its launch in the U.S. later this year, expects its user base to reach five million by 2020. The mobile-first bank plans to open in the U.K. later this year as well — just as Brexit reforms are enacted.
Unlike Revolut, however, N26 does not plan on applying for a U.S. banking license. Instead, the company will have a banking partner the way it does in Europe, Nicolas Kopp, CEO of N26 US, previously told Bank Innovation. Meanwhile, Revolut CEO Nikolay Storonsky told Reuters yesterday that it plans to apply for a banking license in California by end of the year for its U.S. launch.
For N26, the partnering with a third party for a banking license suits its business model at this stage, Kopp previously told Bank Innovation. N26 is built on partnerships. In Europe, the bank is partnered with TransferWise, among other fintech players.
As for its 1 million customer milestone revealed today, that number represents a 50% growth rate since summer 2017. Bank Innovation reported N26’s customer base to be at 500,000 in August 2017 and 300,000 in March of last year.
Today N26 has a transaction volume of over €1 billion ($1.17 billion), with more than 2,500 new users joining every day, the bank says. Revolut signs up around 8,000 new users per day.
A big part of N26 customer acquisition comes through company’s referral program, said Kopp, who used to be N26’s Head of Business Development & Operations in Berlin. Social media and word of mouth, also play an important role, he said. N26 will use this same strategy to acquire customers in the U.S.
N26 is a mobile-first retail bank. The N26 debit and credit card is powered by Mastercard. N26 is currently available in 17 countries in the European Union.
