Challenger bank N26 quits UK market
12 Feb 2020
German digital bank N26 is pulling out of the UK market citing post-Brexit regulatory issues as the reason for closing all UK accounts
12 Feb 2020
N26 said that the timings and framework outlined in the EU Withdrawal Agreement meant that the company would be unable to operate in the UK with its European banking licence.
UK customers with accounts at N26 have been told that their accounts will be closed on 15 April 2020. N26 MasterCard credit cards will also be terminated for UK customers.
The challenger bank pitched itself as 'the free bank for freelancers and self-employed', offering 0.1% cashback on all purchases and free card payments worldwide.
Account holders will have to transfer any funds out of their accounts by that date. All overdrafts will have to be paid off and any automated transactions stopped, including salary payments and direct debits.
The bank told customers that ‘if you have a negative balance, we ask you to top up your account’.
Any payments paid into a UK N26 account after 15 April will bounce and will be returned to the sender’s account.
N26 also did not sign up to the Current Account Switch Service (CASS). If the bank had signed up to CASS, customers would have been able to use the switch service to automatically transfers all payment arrangements to their new account and closs their existing account.
An online customer support team will be available after the bank closure date. ‘This will be accessible through a link on the website, which will remain live. We will contact you to advise that the account is closed and if there are funds remaining explain how you can recover them,’ N26 informed customers on its website.
Thomas Grosse, chief banking officer at N26 said: ‘While we fully respect the decision that has been taken [on Brexit], it means that N26 will in due course be unable to serve our customers in the UK and will have to leave the market.’
Customers with accounts in non-UK markets will not be affected and the digital bank, which was set up in 2013 and only set up in the UK in October 2018 after the Brexit referendum, said it would continue to grow the business in the EU and US.
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 licence 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.’
Following the closure of the company’s UK operations, the majority of N26’s UK staff will move into new roles within the business.
Will Sorby, general manager, N26 UK said: ‘We’ve planned the next steps carefully to ensure this process is as smooth as possible for every customer in the UK.’