European challenger bank N26 has announced that it will be closing accounts for UK customers on April 15 2020. The bank is blaming difficulties created by the ongoing Brexit process.
N26 began offering current accounts in the UK after the EU referendum in 2016, and currently has more than 200,000 users in the UK. However, the bank said that the “timing and framework” of the Brexit Withdrawal Agreement made it impossible to continue.
Thomas Grosse, Chief Banking Officer at N26 said: “While we respect the political decision that has been taken, it means that N26 will be unable to serve our customers in the UK and will have to leave the market.”
N26 bank accounts will operate as normal until the closing date and accounts would be closed automatically on that date after the money has been removed. Customers with money in an account after April 15 will see it put into a holding account.
Charlie, Barton, Banking and Investments Specialist at personal finance comparison site, finder.com, said: “Despite N26 being a relatively small player in the UK compared to the other countries it operates in, closing all operations here is a move that has surprised the financial industry and customers alike.
“While we wouldn’t expect Revolut, whose banking license is from Lithuania, to follow suit, this will add fuel to the fire for critics of digital-only banks who are sceptical of their long term stability. However it also offers a clear opportunity for UK-based digital-only banks who will fancy their chances of sweeping up these 200,000 or so customers.”
James Lynn, co-founder of Currensea comments: “N26 the European challenger bank has just announced plans to exit the UK, leaving 200k customers scrambling. They’ve cited Brexit licensing issues, but with almost a year of Brexit transition to get their UK license, can this be the only reason?
“A survey by Currensea, the travel debit card provider, shows that over 41% of people with challenger bank accounts have them primarily for better rates and no fees when they travel. The Uk Challenger bank Monzo state that only “30% of active users deposit at least £1,000 per month”. In the absence of people using these challenger banks as their primary accounts, and many using them simply for travel, could there be additional reasons for the N26 exit?
“For those N26 customers using the account purely for travel there are a number of alternative options – other challenger banks, pre-pay cards, or a new breed of standalone debit cards which connect to existing bank accounts. For those people that value the convenience of their existing bank account but want better pricing abroad, an Open Banking Debit card like Currensea could be a strong choice.”