Fintech in London and Europe as a whole remains fertile, including a number of startups attempting to innovate around the humble bank account. Best known is perhaps Germany’s Number26, the mobile banking app backed by Peter Thiel’s Valar Ventures. And just this week we covered the pending battle between Starling and Mondo, two mobile-first startups hoping to become fully licensed U.K. banks in their own right.
Now news comes of another new banking upstart: Monese is a soon-to-launch U.K./European mobile banking service for immigrants and expats who might otherwise find it difficult to open a bank account outside of their originating country.
The London, U.K. and Tallinn, Estonia-based company is disclosing that it’s picked up $1.8 million in backing from pan-European accelerator Seedcamp, the taxpayer-funded VC SmartCap, and Spotify advisor and investor Shakil Khan, amongst others.
“All you need from a bank, without the bank,” reads Monese’s signup page. That’s in reference to that fact that, unlike the ambitions of Starling and Mondo, the startup isn’t applying for a full U.K. banking license, which would enable it to do things like offer credit and lend out its customers deposits as a means of generating revenue. Instead the company is defined by the regulator, the Financial Conduct Authority, as an Electronic Money Institution.
“This enables us to hold customers funds, provide payments and provide debit cards very similarly to the high street banks,” says Monese founder and CEO Norris Koppel.
“Unlike banks, we are not allowed to use customers’ funds to invest in markets or in any other way. Customers’ money is held in a safeguarded and segregated account dedicated to them. It is ‘ring fenced’ and separate from any other monies.”
Whatever the regulatory and structural mechanism, Monese’s users won’t likely care that the startup isn’t a bonafide bank since it solves a genuine problem — the difficulty some people are faced with when trying to open a bank account in a foreign country.
Headline features include the ability to open an account in a claimed “under 3 minutes” via its mobile app, a fully-fledged ‘current account’ interface, low-cost international money transfers, and a contactless debit card.
“Monese’s underlying technology enables the company to provide customers with a U.K. current account regardless of their citizenship. This will revolutionise banking for immigrants and expats as ‘residency restrictions’ imposed by traditional high street banks are one of the single greatest barriers to accessing the banking system when they arrive in a new country,” explains Koppel.
In other words, for all intents and purposes Monese is a bank account like any other. Perhaps the only notable difference is that unlike banks that generate revenue through offering credit and charging interest, the startup makes money from transactions.
“Monese makes money from transactions whilst keeping all the essentials such as a banking account and a debit card totally free,” says Koppel. “Customers get a set of free transactions each month. If they use them up, there’s a simple flat rate charge per transaction thereafter. Each month the set of free transactions are reset and customers can even earn more by inviting friends.”