N26 exits UK market following Brexit
German fintech startup N26 is shutting down its operations in the U.K. Customers who opened a bank account in the U.K. will have to transfer their deposits, spend everything with their card or withdraw money at an ATM, as all accounts will be automatically closed on April 15, 2020.
Many European fintech companies take advantage of a European process called passporting. It lets you apply for a license to operate as a bank or a financial service in an EU member state and then expand to all EU member states.
As you may have guessed, N26 has to exit from the U.K. banking market because it currently has a European banking license through the central bank of Germany. Passporting is going to change following Brexit.
In particular, European companies that operate in the U.K. using inward passporting have to follow a new application process in order to continue operating in the U.K.
“The timings and framework outlined in the EU Withdrawal Agreement mean that the company will in due course be unable to operate in the UK with its European banking licence,” N26 writes in a statement. N26 users in other markets won’t be affected by this change.
N26 also faces a ton of competition in the U.K. from Monzo, Starling and in some ways Revolut. It’s also possible that N26 didn’t want to invest a lot of time and money in order to set up a proper subsidiary company in the U.K. with its own banking license.
You can no longer sign up in the U.K. If you’re an existing customer, everything will work normally until April 15. You should empty your bank account, move your recurring payments to another bank, identify all your subscriptions, direct debits and deposits and move them to another bank.
On April 15, you won’t be able to access your account. Your card will be deactivated. Direct debits and deposits will bounce as well. If you have a premium subscription, N26 is going to stop charging you for your N26 You or N26 Metal subscription from March 14.