Beyond the hyperbole that loyally follows fintech in the U.K. (and elsewhere in Europe), the country’s banking sector is on the verge of facing some genuine disruption. That includes the trio of ‘challenger banks’ making headlines — Mondo, Starling, and Atom — but there are other startups looking to take a significant slice of the banking pie.
Or in the case of Monese, which sees a throttled launch today, grow the banking pie in the U.K. and European Union. That’s because the London and Tallinn, Estonia-based company is targeting immigrants and expats who might otherwise find it difficult to open a bank account outside of their originating country.
Its mobile app (Android only for now) promises to let anybody open a Monese account in a claimed “under 3 minutes”, providing a fully-fledged ‘current account’ interface, low-cost international money transfers, and a Visa 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,” Monese CEO and founder Norris Koppel told me in May.
Part of the reason that the company is able to offer banking to those who high street banks typically decline or put up additional barriers is that Monese doesn’t hold a full banking license, meaning that it isn’t able to offer credit or loan out customer deposits. Instead the startup is classified by the Financial Conduct Authority, the U.K. regulator, as an Electronic Money Institution.
The other part of the equation is Monese’s technology play. It claims to validate your identity in realtime based on a snapshot of your passport and a ‘selfie’ taken with your smartphone as part of the account opening process. In addition to “hundreds of data points”, the company’s system then makes an instant decision on whether or not to allow you to open an account.
However, despite not being a ‘bank’ per se, for all intents and purposes — and not least for those for whom Monese solves a genuine problem — it operates as a bank account like any other, including providing an account number and sort code, a Visa Debit card, and cash deposits and withdrawals. In fact the startup has a few additional tricks up its sleeve too.
One is low cost international transfers. “We are also totally different from most other digital banking services as we combine cheap international money transfers with our everyday current account. It’s like having a Transferwise or CurrencyFair bundled into your bank account. This all in one solution is perfect for our immigrant/expat audience for whom remittance is incredibly important,” says Koppel.
Another is that Monese customers will be able to hold multiple currencies in their Monese account. This will mean you will be able to have Euros sitting alongside Sterling, perfect for its European ex-pat target audience and those who travel to the Eurozone extensively. The Monese Visa card will adapt automatically.
(It’s worth noting that the startup is able to do this with relative ease because it only needs a single Electronic Money Institution license across the whole of the European Union, underlining the negative impact the U.K. withdrawing from the EU would have on the country’s flagship fintech industry.)
Meanwhile, the startup’s business model is somewhat disruptive too. Opening a Monese account is free and so are the first 5 transactions each month. However, after you have exceeded 5 credits, it charges a flat rate of 50 pence per transaction.
This doesn’t include when you pay for items on your card in the U.K. or when you (or somebody else) makes a U.K. bank transfer in or out of your account, but does include cash withdrawals at ATMs and cash deposits. There’s also an additional 0.5% charge and minimum £1 fee for transactions made abroad.
In May Monese disclosed that it had 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. Separately, I’m hearing that a significant Series A round is currently underway.
Note: Although Monese is launching today, the startup has a 50,000 waiting list of people who have registered their interest and is throttling new account openings. However, for a limited time, TechCrunch readers can download the Monese Android app and then use this link to jump the queue.