Will N26’s Success Story in Europe Replay in the US?

The digital banking space in Europe has been fascinating to watch. Customers seem much more engaged and willing to move to the various challenger banks that operate in the region. Reuters reports that N26 has crossed the 5 million customer mark, up from 3.5 million last summer. The incredible growth of N26 and of their peers doesn’t seem to be slowing down. N26 which was founded in February of 2013 added more customers in 2019 than in all previous years. Not only are the challenger banks attracting customers, they have also attracted massive amounts of capital. N26 has raised $683 million in total and was last valued at $3.5 billion.

Co-founder and CEO Valentin Stalf shared that growth was strongest in Germany, France and Austria and that Italy and Spain showed promise in achieving similar rates of expansion. While a breakdown of numbers by country wasn’t provided it is safe to assume that the US offering launched last year pales in comparison to their customer base across Europe.

N26’s US offering has little that is unique from the perspective of a US consumer. The N26 offering includes a cashback debit card, no hidden fees, savings ‘Spaces’ and free cash withdrawals. The most compelling feature is the access to your paycheck up to two days early which is also offered by US based companies Chime and Varo. When comparing side by side Varo’s offering is superior, currently offering 1.92% on savings with the potential to earn 2.80% by meeting certain requirements. For savers and those who don’t value the early paycheck access there are plenty of other interesting options for US consumers including SoFi, Marcus and Ally to name a few.

The digital banking space is the hottest area of fintech. It is also the most competitive with dozens of interesting offerings for US consumers. N26 has been incredibly successful at building their brand across Europe but it remains to be seen whether US consumers are going to jump on board. From my perspective they are going to have to beef up their US offering if they’re going to have a chance at the same success they have had in Europe.