Monzo gears up for current accounts after receiving full banking license
UK digital challenger Monzo has had its banking restriction lifted, enabling it to start bringing current accounts to its users.
Unveiled in 2015 under the name Mondo, mobile-only Monzo received its restricted banking license from the Financial Conduct Authority and Prudential Regulatory Authority last summer.
The startup recently completed a £2.5 million crowdfund raise, attracting a record-breaking 6500 investors to on Crowdcube, taking total funding to around EUR35 million.
In a blog, CEO Tom Blomfield says that the full banking license means Monzo can now start introducing current accounts – something it is already doing with a small group of users.
“We’ll slowly be expanding that group over the coming months to put our banking system through its paces and ensure everything works as expected,” says the post.
This caution comes after the startup suffered two tech setbacks last month. First, it had to move its card processing inhouse after problems with a third party provider, then customers began seeing incorrect payment displays on its app.
The process will take several months but once customers are moved over to current accounts, they will get new Monzo debit cards, account numbers and sort codes and be able to make bank-to-bank payments, set up direct debits and get their salaries paid in.
The milestone sees Monzo steal a march on another digital challenger, Tandem, which last month missed licensing deadlines imposed by the PRA after Sanpower, the Chinese conglomerate which owns House of Fraser, was forced to cancel a £29 million cash injection.