Monzo withdraws US banking license software after talks with OCC
A Monzo debit card is used at a payment terminal.
LONDON – UK financial technology company Monzo has withdrawn its application for a US banking license following discussions with regulators at the Office of the Comptroller of the Currency.
The London-based mobile banking app said it was “not the result” it originally wanted to achieve.
The news was first reported by the Financial Times on Monday and confirmed to CNBC by a Monzo spokesman.
Monzo reportedly started applying for a U.S. banking license in April last year to expand its user base, but talks with the OCC don’t seem to have gone well.
“After our recent collaboration with the OCC, we decided to withdraw our application for a banking license for our US start-up,” the Monzo spokesman said in a statement.
“While this is not the result we originally wanted, it allows us to build and scale our early-stage product offering in the US through existing partners and to continue investing in the UK. We have big ambitions for Monzo US There are many “Go-to-market paths that we are exploring that have worked for other players in the market who are now big players.”
Monzo, which carried out a soft launch in the USA last June without a full banking license, is one of several so-called challenger banks that only operate with an ATM card and an app. These are new digital banks trying to capture part of the massive financial services sector.
The start-up, which competes with Chime, the British Revolut and the German N26, successfully secured a full banking license in the UK in 2017 in order to be able to offer its customers more revenue-generating products.
Hundreds of thousands of Britons use Monzo as their main bank account, but the company has yet to make a profit. A loss of £ 130 million ($ 181.68 million) was reported for the year ended February, up from £ 114 million the previous year.
Last June, Monzo said the disruption caused by Covid-19 had created “significant doubts” about its ability to operate “as a going concern”.
The company’s market value also fell 40% to £ 1.25 billion ($ 1.7 billion) at about the same time.