Hopefully, i just hope it goes off without any hitch. They started off well and should be in a better position to expand
Hopefully they can take the experience from the uk rollout and apply it to the us in the same way without haemorrhaging money.
There is alot to do still in the u.k to become profitable so lets hope thats achieved before they make a good go at the u.s
Hmm very light on facts there but @sohear is usually right on the money. (It’s not what you know it’s who you know).
This is very exciting news. Really huge in fact. There’s a seismic difference between talking about maybe doing something one day and actually amassing your troops on the border.
First it was “but will anyone want a prepaid card?”, then it was “but will anyone want to convert to a full current account?”, then it was “but can they convince anyone to move their day to day banking to them?”, then “but how will they become profitable when each user costs £60?”.
They’ve answered a lot of tricky questions but now there is the trickiest question of all - “will the rest of the world care about Monzo?”
What facts are you missing? What I wrote is pretty much the only details that exist right now: a small team is putting together preparations for a U.S. launch, it will be a lite version, similar to pre-paid etc. etc.
I guess from the reader’s point of view it’s all hearsay (O’Hearsay?) as we don’t know who said what, who ‘who’ is or how reliable they are. But if your track record is anything to go by this is probably very reliable information.
Chime ( US Challenger Bank)
I only write when I’m right.
Trust me on this
Any idea on likely time-frames?
It’s very early stages, so definitely won’t be this quarter. My guess is 2nd half of the year earliest, could take longer depending on banking partner etc. But work to get there has begun in earnest.
Nice article - I guessed earlier in the thread that they’d likely roll out similarly to how they did here! Exciting that it looks like some traction is happening.
Do you think they will do a US wide ‘lite’ rollout or maybe target specific states? I’m not too familiar with banking in the US so not sure If that would even be possible/ manageable.
If a US wide roll out is the only option I would have thought we will be waiting a while for anything - but not sure how long Monzo have been thinking about it and setting up logistically (although office is not in Vegas).
Wonder if the US launch partner could be Stripe… their new Issuing product seems like a good match for a short term launch?
Does Stripe have a nationwide “de novo” banking licence? If they do it’s a potentially a good fit given that Stripe founders have invested in Monzo.
On the de novo applications themselves, this sounds like cautiously optimistic news:
(My understanding is that the only way to obtain a banking licence for all the US us through the FDIC’S “de novo” route - the FDIC being the regulatory agency responsible. Traditionally, banks have been licensed in each State individually).
If this is the case, do you see Monzo going through the “de novo” route or say selecting states to “dip their toes” so to speak. Could see going state by state at least initially to test the product in the US Market as a more palatable option than full US exposure.
I’m no expert, but for logistical, administrative and capital reasons I’d say it’d be de novo as a strong preference, partnering with an existing bank until they get there.
This article gives a bit more detail about the de novo situation:
Interestingly, most new applications were backed by capital of $20 - $40m. I imagine going state by state would be much more capital intensive.
I suppose by running a limited BETA and through partnership having the De Novo Licence will work as an advantage. Although the pool would be massive Monzo would be able to be selective on numbers and grown naturally rather than testing and then having to apply for De Novo.
I read somewhere that Revolut were applying for a California only license but that was some time ago and not sure where they are with their US expansion.
I’m a bit confused. Think of partnering with an existing US bank as the equivalent of the UK prepaid days. The de novo licence is the same as becoming a proper UK regulated bank. Partnering means they could launch before having a de novo licence. Indeed, if they had to wait for one there wouldn’t be any benefit in the partnership phase.
The Monzo crowdfunding prospectus (March 2017 edition) put it quite well:
A US expansion is possible via sponsor banks. This could take 6 months to get live, and short-term revenue would be generated by higher US MasterCard interchange rates. Medium-term profitability would depend on a partnership with a US-regulated unsecured consumer credit provider or acquisition of a US banking licence.
My fault I didn’t type that one out very well…
What I mean is that by going through partnership (whilst making the application but not having the license) they will be effectively replicating what they’ve done here by first doing pre-paid (now with a partner bank) and then when the time is right making the application.
Oh sorry, my bad. Absolutely agree on that front!
TechCrunch: Challenger bank Monzo has quietly begun working on a U.S. launch: