So the 2023 annual report says that Monzo is considering setting up shop in Europe. Which I’m taking to mean the EU as, last time I checked, I think the UK is still in the general vicinity.
Let’s use this topic to talk about that. Starting with a poll!
Where should Monzo base its EU HQ? For the purposes of polling, assume this will also be the first country they launch in, so we’ll want to balance market size with regulatory reputation and the tax code / general business-friendliness!
It’ll be Ireland, simplest place to go, would need effective cross border payments, and to understand the culture differences between the UK and the Republic.
France seems a stretch, the Netherlands would be interesting and has a fintech culture, and Germany would be too much like hard work
Netherlands (can work in English no problem, culturally aligned, fintech friendly)
France (Macron liked wooing British fintechs and they might try to offer an attractive regulation/tax regime)
Lithuania (probably been burnt by Rev and others - EBA/EC might be worried about them becoming the EU Iceland)
Out of the rest I’d have Estonia, Latvia and Poland as wildcards in that order. Poland would be attractive and a big addressable market, but rule of law issues and uncertain (to me at least) regulatory and legal environment might not be to its benefit. Not to mention the culture clash…
Ireland is not the biggest market but the most obvious one for several reasons, including the fact they can compete (and beat?) Revolut which I understand is quite popular there.
Germany would be difficult - I used to sell retail there several years ago, and they love their own ‘bank debit’ system for payments (can’t remember what it’s called) - many customers didn’t even have a debit card, so felt a bit backwards. France was much easier to deal with in that respect.
Long time lurker here, and previous user of Monz(d)o back in the prepaid days and loved it then.
I have lived in Ireland now for 6 years and thought I’d offer an insight into the popularity of Revolut and why Ireland might no longer be a sensible choice:
1 - Until Revolut came along, there was zero way of people making an instant transfer to each other here. We don’t have a faster payments or mobile payments system, and banks charge ‘express’ transfer fees (think ~ €20) for anything that’s same day. Plus the hassle of using BIC / IBAN to make a transfer. Revolut was the first to offer this, and became basically ‘viral’ for that reason alone. To ‘Revolut’ someone is literally used as a verb here for payments between individuals.
2 - There’s only three legacy banks left and these can charge as much as 20c for every chip & pin / direct debit transaction - on top of account maintenance fees. Revolut is effectively the only viable option for a free (standard) bank account. It is also literally the only free FX card payment option in ROI (obvs. limits apply on plan) on this dual currency island.
3 - With the exit of KBC / Ulster, and Revolut introducing local Irish account details and deposit protection / credit products, they are literally pushing - and eating - the legacy banking market alive, for the reasons above plus their other services. Not to mention the app is light years ahead of Irish banking apps - think 2010’s skinned web apps and card readers as the alternatives.
I’d love to see a Monzo or similar come along here for the competition, however Revolut are getting pretty ubiquitous here - when you see people pay by card, the penetration rate is almost 2 of every 3 payments being made by Revolut. Across all ages and demographics too. That bright yellow <18 card is a common site with school kids at lunchtime - that’s a future market already getting tapped.
In summary, this market was absolutely ripe for the pickings maybe three years ago, but I’d say it’s going to be very hard for Monzo or any other fintech to make a crack in it now unless they really can offer something special enough to convince people to move again.
Even Anne Boden and Starling gave up - and she used to head one of those legacy banks remaining here.
It just feels to me like an attempt to enter the Irish market, presumably on an e-money licence route, would just be throwing good investment money away.
Wait, what?? The banks charge the customer for every purchase they make with their debit/credit cards??
Thank you for the summary of where things stand, I knew Revolut was popular there, just didn’t realise how popular. This is amazing (I love it when paleolithic banks are threatened to go the way of the dodo)!
I’d say there is still scope for a competitor to come along, especially if they offer something different in some aspects. I wouldn’t discard it yet.
You can get current accounts where there are no transaction fees, typically these will be made up by higher monthly maintenance fees instead though. Then expect to get stung for FX, ATMs, overdraft ‘arrangement’ and ‘maintenance’ fees etc.
Credit Unions offer a current account for €4 a month with additional fees depending on the Union, however it’s a standard account common to them all with a debit card issued in Malta (I suspect might be prepaid).
I’d love to see a competitor come along, compared to the North (and rest of the UK), banking is a barren landscape here
and loved it then.
