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German digital challenger bank N26 will close the accounts of its 200,000 UK users on 15 April
Nearly a quarter of a million customers of German digital challenger bank N26 will have their accounts closed in April after it announced it will be exiting Britain, pinning it on Brexit.
However, the bank launched in Britain in October 2018, just five months before the UK was originally due to leave the EU.
Industry insiders have questioned whether it is closing here because the bank had failed to attract enough customers.
The Berlin-based start-up has had a banking licence from the European Central Bank since July 2016, but not a British one from the Bank of England.
When asked on social media platform whether it could apply for a British banking licence, N26 Account said it was not a 'viable' option 'as a business'.
In a statement, it said the 'timings and framework outlined in the withdrawal agreement mean that the company will no longer be able to operate in the UK with its European banking licence'.
That suggests that N26 was banking on Brexit not happening.
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The excuse has been roundly mocked. One user responded to a statement posted on Twitter: 'This is a rubbish excuse; we were already going through Brexit when N26 launched here.
'N26 just failed the UK market spectacularly and is now blaming Brexit on its withdrawal'.
Another said: 'Sounds like you failed in the UK and are looking for an excuse'.
Sarah Kocianski, head of research at fintech consultancy 11:FS, wrote on Twitter: 'No-one in the industry is really surprised by this.
'Why bother getting, and maintaining a licence (along with regulatory capital) in a market where you face stiff competition, when you could go many other places where you don't?'
N26 denied the move was due to poor performance or capital requirements needed to obtain a UK banking licence, claiming that it was unviable due to the cost and time constraints needed to obtain one before the end of the year.
N26 accounted for around 10% of the UK's digital banking market a year on from its launch
All UK N26 accounts will be closed on 15 April. The bank said until that date accounts will work as normal, including all card payments and direct debits.
Customers will be asked to transfer deposits in their N26 accounts into an alternative bank account, while it said it will handle 'all other aspects of account closure on customers' behalf'.
Money in N26 accounts is protected up to €100,000 under the European deposit protection scheme, which works out at just over £84,000 at the moment.
This is only slightly less than the £85,000 protected by the UK's Financial Services Compensation Scheme.
The German bank has more than 5million worldwide users, but accounted for just 10 per cent of the digital challenger bank market in Britain last November. It faced a tough battle for customers against other digital banks like Monzo, Revolut and Starling.
Both Monzo and Starling have UK banking licences, while Revolut, like N26, is licensed by the European Central Bank.
N26 offered a free current account, a £4.90 'You' option and an account with a metal debit card which came with a £14.90 monthly fee.
Those with accounts with monthly fees will no longer be charged from 14 March, meaning they get the last month before their account closes for free.
One user asked on Twitter: 'Can I cancel my metal registration now if it's less than a year old?
'Seems pretty mean of you to force me to pay £15 a month into an account that I have no plans on using before you close it.'
THIS IS MONEY'S FIVE OF THE BEST CURRENT ACCOUNTS
Chase Bank will pay £1% cashback on spending for the first 12 months. Customers also get access to an easy-access linked savings account paying 3.8% on balances up to £250,000. The account is completely free to set up and is entirely app based. Also no charges when using the card abroad.
Nationwide's FlexDirect Account offers 5% in-credit interest to new joiners when they switch on balances up to £1,500. This rate only lasts for one year. The account is fee free.
Halifax Reward Account pays £150 when you switch. Also earn up to an extra £75 cashback when you spend £750 each month for 3 months. There is a £3 monthly account fee, but that's stopped by paying in at least £1,500 each month.
First Direct will give newcomers £175 when they switch their account. It also offers a £250 interest-free overdraft. Customers must pay in at least £1,000 within three months of opening the account.
NatWest's Select Account account pays £200 when you switch. The account has no monthly charges, but to be elligible for the £200, you'll need to deposit £1,250 into the account and log into mobile banking app within 60 days.
Deals picked by This is Money's specialist reporters.
Read our full best bank accounts round-up
Nearly a quarter of a million customers of German digital challenger bank N26 will have their accounts closed in April after it announced it will be exiting Britain, pinning it on Brexit.
However, the bank launched in Britain in October 2018, just five months before the UK was originally due to leave the EU.
Industry insiders have questioned whether it is closing here because the bank had failed to attract enough customers.
The Berlin-based start-up has had a banking licence from the European Central Bank since July 2016, but not a British one from the Bank of England.
When asked on social media platform whether it could apply for a British banking licence, N26 Account said it was not a 'viable' option 'as a business'.
In a statement, it said the 'timings and framework outlined in the withdrawal agreement mean that the company will no longer be able to operate in the UK with its European banking licence'.
That suggests that N26 was banking on Brexit not happening.
RELATED ARTICLES
Previous
1
Next
Will millions of Britons really make the move to a... 'Innovation is more important than ever': Meet NatWest's... FCA hits back over Zeux's 5% 'interest rate' adverts and... RBS's digital bank Bo tells customers to shred their...
Share this article
Share
32 shares
HOW THIS IS MONEY CAN HELP
Looking for a better bank? This is Money's five of the best current accounts
The excuse has been roundly mocked. One user responded to a statement posted on Twitter: 'This is a rubbish excuse; we were already going through Brexit when N26 launched here.
'N26 just failed the UK market spectacularly and is now blaming Brexit on its withdrawal'.
Another said: 'Sounds like you failed in the UK and are looking for an excuse'.
Sarah Kocianski, head of research at fintech consultancy 11:FS, wrote on Twitter: 'No-one in the industry is really surprised by this.
'Why bother getting, and maintaining a licence (along with regulatory capital) in a market where you face stiff competition, when you could go many other places where you don't?'
N26 denied the move was due to poor performance or capital requirements needed to obtain a UK banking licence, claiming that it was unviable due to the cost and time constraints needed to obtain one before the end of the year.
N26 accounted for around 10% of the UK's digital banking market a year on from its launch
All UK N26 accounts will be closed on 15 April. The bank said until that date accounts will work as normal, including all card payments and direct debits.
Customers will be asked to transfer deposits in their N26 accounts into an alternative bank account, while it said it will handle 'all other aspects of account closure on customers' behalf'.
Money in N26 accounts is protected up to €100,000 under the European deposit protection scheme, which works out at just over £84,000 at the moment.
This is only slightly less than the £85,000 protected by the UK's Financial Services Compensation Scheme.
The German bank has more than 5million worldwide users, but accounted for just 10 per cent of the digital challenger bank market in Britain last November. It faced a tough battle for customers against other digital banks like Monzo, Revolut and Starling.
Both Monzo and Starling have UK banking licences, while Revolut, like N26, is licensed by the European Central Bank.
N26 offered a free current account, a £4.90 'You' option and an account with a metal debit card which came with a £14.90 monthly fee.
Those with accounts with monthly fees will no longer be charged from 14 March, meaning they get the last month before their account closes for free.
One user asked on Twitter: 'Can I cancel my metal registration now if it's less than a year old?
'Seems pretty mean of you to force me to pay £15 a month into an account that I have no plans on using before you close it.'
THIS IS MONEY'S FIVE OF THE BEST CURRENT ACCOUNTS
Chase Bank will pay £1% cashback on spending for the first 12 months. Customers also get access to an easy-access linked savings account paying 3.8% on balances up to £250,000. The account is completely free to set up and is entirely app based. Also no charges when using the card abroad.
Nationwide's FlexDirect Account offers 5% in-credit interest to new joiners when they switch on balances up to £1,500. This rate only lasts for one year. The account is fee free.
Halifax Reward Account pays £150 when you switch. Also earn up to an extra £75 cashback when you spend £750 each month for 3 months. There is a £3 monthly account fee, but that's stopped by paying in at least £1,500 each month.
First Direct will give newcomers £175 when they switch their account. It also offers a £250 interest-free overdraft. Customers must pay in at least £1,000 within three months of opening the account.
NatWest's Select Account account pays £200 when you switch. The account has no monthly charges, but to be elligible for the £200, you'll need to deposit £1,250 into the account and log into mobile banking app within 60 days.
Deals picked by This is Money's specialist reporters.
Read our full best bank accounts round-up
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