N26 finally launches in the U.S.

After months of anticipation, challenger bank N26 launched in the U.S. today. The German startup with global ambitions will begin to service U.S. users with an offering similar to what its 3.5 million European customers access.

Slow rolling: The company will begin inviting people off a 100,000 person waiting list. New users will be prompted to download the N26 app and will receive a debit card in the mail a few days later.

• While this seems to be a limited launch, N26 says it will roll out a more general public launch later this summer.

🎉 N26 has arrived in the US! 🇺🇸 Check out @N26US and read all about the rollout on our blog:https://t.co/RP4fQUzHyu

— N26 (@n26) July 11, 2019

Limited features, more later: N26 is launching with some basic functionality, like a full mobile experience, no fees, and a payday advance feature that allows users with direct deposit to access their wages quicker.

• Over the next few months, N26 plans to introduce its premium Metal Cards for consumers and businesses in the U.S.
• N26 envisions itself as a tech firm and uses its product design and experience to attract customers. “The key here is that we approach consumer facing and app development from a consumer tech angle, not like a traditional bank,” said N26’s Kopp during a Tearsheet webinar on challenger banks earlier this year. “It’s all about fast iterations, getting customer feedback on what we’re developing, and developing the product in small, incremental steps.

No banking license: The US audience has been anticipating an N26 launch for months. US CEO Nicolas Kopp gave Tearsheet readers insight into an impending launch in December of 2018.

• For its US launch, N26 partnered with Axos Bank.
• In addition to its own direct to consumer bank, Axos Bank also provides banking services to Nationwide and H&R Block.
• “We looked at 30 players, we did some due diligence and we're happy to partner with Axos Bank. The deals that you get in the U.S. for white-label banks are much more favorable than in Europe,” said N26 co-founder and CEO Valentin Stalf to TechCrunch. “It’s a setup for the longer term. It’s good for a couple million customers,” Stalf added.
• N26, along with other European challenger banks, are using a global expansion playbook that requires getting licenses in new jurisdictions. That's proving to be a slow, expensive, and arduous process.

Interesting timing: Berlin-based N26 launched in the US days after Deutsche Bank made massive cuts to its U.S. and global staff.

• N26 now has a staff of 50+ in New York and 1000 globally. The company continues to grow its headcount.
• Tearsheet Research shows that US and global financial industry professionals see Amazon as a bigger banking threat than N26.

Correction: An earlier version of this article reported that N26 had applied for a banking license in the U.S. The bank has maintained that it planned on entering the U.S. market via a partner bank.