N26 has rolled out paid premium accounts in two new markets
via Business Insider
German neobank N26 has announced that its paid premium accounts — N26 You, N26 Metal, and N26 Business You — are now available to residents in Greece and Slovenia, Crowdfund Insider reports.
All of these premium accounts come with benefits beyond those offered by basic free N26 accounts, including travel insurance coverage and special perks from brands like WeWork and Hotels.com, while Metal accounts additionally offer a special metal debit card, car rental insurance while traveling, and mobile phone theft and damage coverage.
N26 Business You accounts also boast 0.1% cash back on purchases. The perks come at a price, however, in the form of monthly fees: N26 You and Business You accounts cost €9.90 ($10.88) per month, and Metal accounts cost €16.90 ($18.58).
The premium account launches in new markets represent a new revenue opportunity after the neobank’s departure from the UK market. The rollout comes on the heels of the N26’s announcement that it will close all UK customer accounts effective April 15 due to Brexit.
This decision is a tough setback for the neobank, given the country’s apparent receptiveness to digital banking: 53% of UK consumers say they use a mobile banking app from a traditional bank, and 48% say they use an online banking offering of some sort from a traditional bank per survey data from YouGov. Expanding its paid accounts to new markets — and therefore prospective customers who could be tempted by the premium incentives — creates new revenue opportunities that can help ease N26’s pain of losing the UK.
Wider deployment and marketing of premium paid accounts could also help N26 move toward the elusive grail that is profitability. Along with getting more customers to use their neobank account as their primary bank account, reaching a critical mass of paying subscribers is one of the main ways that neobanks — which almost ubiquitously struggle with controlling costs and moving toward profit — can boost their bottom line.
That makes the wider deployment of such paid accounts, along with marketing campaigns that emphasize their unique benefits, a sound strategy for N26 and other neobanks. However, these paid account types have to be executed with close attention to customer feedback, or adoption will be tepid, and those who do sign up may be vocally dissatisfied. Monzo experienced this with its Monzo Plus offering last year, going so far as to suspend the service in September after receiving a flood of negative feedback.