Impact of change to Passporting regulations on Monzo


If we lose passporting rights in financial services due to Brexit it could be very damaging for the UK economy as firms re-locate activities to financial centres in the EU; this key issue has been largely ignored by politicians and this petition gives citizens a voice to help protect our economy.

Assuming Monzo has a UK banking license and assuming they wiah to expand to operate in other countries, then this issue is of interest to us

(Dylan Duffy) #2


Excuse the probably simple question but if this is removed, I guess it means Monzo couldn’t operate in any other country apart from where it’s license is held - if that is the case how do other country’s banks operate in the uk?



It works both ways. Assuming UK lose passporting rights when they quit UK then Monzo if UK registered would have to also obtain a license in an EU state to operate there, but banks like Handelsbanken and Fidor licensed in Sweden and Germany would need to register in UK to operate there assuming passporting area reduces in size along with the departure of the UK

(Dylan Duffy) #4

Any idea how other banks such as bank of India which has a few branches work (obviously out of the EU)?


they get a license in the UK or another EU member state, which is why many non EU banks were also opposed to Brexit

(Alex Sherwood) #6

This topic is also related to this post -


Other foreign banks have full UK banking licenses


No that is not true. Some do, some don’t. Just taking a few off the top of my head. Handelsbanken UK use Swedish regulators license, Fidor UK use German regulators license, etc.


The vast majority do that was my point and if they want to still trade post EU dependant on the agreement , the others will apply to.

And as all Monzo is is a prepaid MasterCard that wouldn’t be affected anyway, just like you can use any other MasterCard anywhere in the world .
To call it a ‘Bank’ at the moment is a bit of a joke anyway really as it’s the customers who are lending IT money right now😂


8,008 companies registered elsewhere in the European Economic Area hold passports to offer financial services in the UK according to the FCA. That is for banking, insurance, etc. Last time I went thru the list of overseas banks operating in the UK the majority had foreign registration not UK registration, so where you are getting your facts on passporting I don’t know, hearsay in your local pub?


No, actually, I work in the industry, The vast vast majority of firms that have passporting permissions will not be Banks, in fact out of those 8,008 only a miniscule 108 are actually EEA Banks as at 30th June 2017, the vast majority of the rest are financial advisers and credit firms of various types who will be advising from other EU countries to their Clients who now live in UK. Googling a newspaper article from 20th September 2016 doesn’t tell you that does it :wink:


I said that list was made up of banks and insurance companies etc if you bother to read a post properly before you comment.

The actual list detailing inbound and outbound passporting states what type of financial institution that are.

What I was questioning was your comments implying that the large part those foreign banks operating in the UK were operating licensed here, when the last list I had from the FCA indicated that the majority of those EEA banks were operating under licenses from other EEA member states. As for non-EEA overseas registered institutions you may be right.


you also need to be aware that there is outbound passporting and inbound passporting. Outbound passporting can be used by UK firms wanting to operate in the EEA buy also by foreign banks using UK as their base to operate in Europe (i.e. non-EEA banks). Inbound passporting could be EEA banks operating in the UK or non-EEA banks with a European office who wish to operate in the UK under a license issued to that office. I was looking at EEA banks operating in UK under inbound passporting arrangements and not looking at non-EEA banks who more likely to obtain a local UK license


None of which makes any difference to a UK based pre-paid Mastercard customer (which is all Monzo is at the moment) over here and the use of their own money that they have deposited on that Mastercard, for use whilst they are abroad, or indeed if and when Monzo actually start being a ‘Bank’ it wouldn’t stop someone using any bank account debit card in machines abroad whether inside or outside the EEA either, as that will be a debit card linked to a credit card company like mastercard or visa also.
So in reality for UK customers it will make no practical difference at all as regards accessing their money anywhere that has linked machines in the world


No but Monzo do not desire to just sell services to UK customers. They have plans for expansion into Europe and the world, and to operate in the EEA selling to customers there is currently dependant on Passporting arrangements. If and when passporting arrangements cease (currently they are dependent on being in the EU/EEA, but UK Brexit negotiators have indicated they want to be putside that area) this will impact Monzo’s plans. Though obviously they can then seek to register locally in the revised EU area. As for foreign banks getting licensed in the UK to replace any ceased passporting arrangements there are already banks from 2 EU countries and 1 EEA country looking at draft plans to cease operating in the UK.


Well they need to concentrate on getting the Card (where people lend them money in effect) working properly first… today isn’t the first time where there whole system has failed and people have been left high and dry not able to draw their own money.

They have a lot to get right with their systems here before they even launch proper bank accounts let alone expand abroad.


By the time any decisions on passporting are finalised Monzo will not be a prepaid MasterCard, it will be a full debit card linked to a current account

Monzo is a Bank weather you personally want to call it that or not. At for customers funding it the definition of a bank is not dependent on it’s source of funds but on the services (e.g. deposit holding etc) that it provides. Monzo intend to raise revenue from customers from overdraft provision, and on target to go into profit that way, whereas Metro Bank with it’s more traditional approach is still not breaking even after many years.

Calling Monzo a ‘joke’ (your words) is crazy when they are developing an app light years ahead of most banks, and mailing customers cards in days not weeks. Some full banks like Fidor in the UK can’t even provide BACS credits, BACS direct debits or IBAN. Personally I think that is more of a joke!

(Alex Sherwood) #18

They’ve already addressed today’s issue, indirectly -

so although they need to do more testing of the current accounts before they launch, this particular issue won’t be a problem.


And that is just what they are doing. They have been building up a system that is going to avoid dependence on third parties so they are not hostage to their downtime and have control over maintenance, update, repair, etc in house

EDIT: Thanks Alex from making the same point at the time I was typing…great minds think alike ha ha


Seeing as more and more bank customers now do all their banking via an app now and never ever use a bank branch or even phone their bank anyway, it will be interesting to see what in reality Monzo can offer that is even as good as the major banks as an overall service, let alone better.
Many people will have got a Monzo Card because of the hype and as an extra to get fee free cash or purchases whilst on holiday, rather than with a view to anything greater.
It will be interesting to see what the usage rates are when the winter comes along… and at the end of the day Monzo need to make a profit sometime and nothing comes for free continuously in this world.