For years, the promise of FinTech startups disrupting the complacent and technologically lagging consumer banks of Europe has been a theoretical one. Now this is finally changing, with two rapidly emerging and well-funded players expanding across Europe (and beyond): London-based Revolut and Berlin-based N26.
Both startups are offering banking services built for the mobile age, in a free and a paid premium plan. While initial doubts about their longevity were justified (as with any startup entering a highly regulated, complicated industry), considering the size of recent funding rounds, chances are good that both services will stick around for a while. N26 just raised $130 million from Tencent and Allianz Group. Revolut pocketed $66 million in a Series B last year from Index Ventures and others.
Funding alone doesn’t tell much about the quality and potential of the product of course. I am using both services and am pretty happy so far. N26 offers a more typical set of banking services but optimized for the smartphone. Revolut has a bunch of rather uncommon features such as a pretty interesting multi-currency support, virtual credit cards and the option to load money onto the account through other credit or debit cards (currently with zero fees for certain cards issued in Europe).
Right now, I prefer Revolut over N26, but I am optimistic about both companies. There is a good chance that both startups will fiercely compete by constantly improving their offerings, as well as that they’ll manage to significantly grow their piece of the banking pie, at the expense of the incumbents with their e-banking services often still built around the desktop paradigm.
There are many areas in which consumer banking services could become much better than what’s currently the status quo. With these two new contenders (as well as with the introduction of the “Revised Payment Service Directive”, PSD2, and the innovation this will spur of course), there is real hope.
For me, the looming battle between Revolut and N26 (and possible other future newcomers) looks to become one of the most interesting one’s to watch in the European tech sector.
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