Y Combinator’s growth fund to back challenger bank Monzo

In the UK there's also:

- Starling Bank - https://www.starlingbank.com/

- B / Clydesdale & Yorkshire Bank - https://www.youandb.co.uk/

- Monese - https://monese.com/

- Metro Bank - https://www.metrobankonline.co.uk/

Loads more too - https://en.wikipedia.org/wiki/Challenger_bank

Yes, but they don't have emoji.

Is paypal a challenger bank or aspiring to be? AFAIK Don't think paypal offers anything more than transactions. No savings. No card.

And which of these will do business with Cannabis companies?

Especially without requiring account payments of ~$3,000 per month OR ~3% of your deposits (yes this is what they are charging)

NorthBay Credit union in Santa Rosa, wants $3,000 per month and a litany of access rights to your financials that no other bank asks for.

Other CUs are seeking 3% of the total deposits in your account asa "service fee"

Fuck that.

Plus the other 8,800 banks that exist already https://www.fdic.gov/bank/statistical/stats/2018dec/industry...

All those options, and I still can't find a US bank with an API.

N26 have some big troubles in germany. The BaFin (german abbr. for Federal Financial Supervisory Authority) is taking a closer look into N26 after several reports for "money disappearing" and having insufficient customer support.

Which ones are touting crypto-friendliness (aside from Cash already having integrated crypto into their own app)?

I think it’s highly likely Monzo will be one of the winners. The leadership is strong, and customers absolutely love their product, as quantitatively measurable by their crowdfunding.

Great investment for YC, who also take credit for shaping the way Monzo has been led.

My only annoyance about Monzo is that I’ve been unable to invest so far. The only company that can stop Monzo now is Monzo.

There’s a lot of appeal in a product that lets you signal that you’re taking a different path.

As someone with a Monzo account, but whose main accounts are with Barclays and Nationwide, I find the hype around the "challenger banks" in the UK a bit unexpected. I'm not really sure I understand what they are offering that is so revolutionary. I still think it's great they exist as competition is overdue in the UK banking sector, and I hope they do well.

I find Monzo works well for what I use it for, which is tracking my daily small item spending (getting lunch, buying a coffee etc), while the Barclays and Natwest apps work well for the "grown-up" banking. Between the latter two I have 4 bank accounts, two credit cards and two mortgages, and the apps (combined with Faster Payment's awesome transfer time) make it ridiculously easy to manage my finances.

Monzo app is definitely very nicely done, and there are some neat features, but for my day-to-day banking I have absolutely no issue getting everything done with the Barclays and Nationwide apps. Both could do with a bit of UX work and decluttering, but they are perfectly fine.

Are the rest of the main banks just really awful compared with Barclays and Nationwide?

Most UK banks offer apps, Monzo is not doing anything particularly new. Their success has been in convincing investors that the competition is "ossified" whilst dropping tons of their money and failing to actually gather deposits.

You can buy £400bn of deposits with Lloyds for £40bn (and get paid 5%/year for the pleasure). Or you can pay £1bn for a loss-making company with £100m in deposits...it is pretty simple.

And Slack is just a normal messaging app.

The experience of banking with Monzo is easily 10x the other six major UK banks I’ve used extensively.

By startup heuristics, user growth would be the important thing. Idk if those apply well to banks or not

The timing of this funding round is also the biggest surprise for me. Their last round was in November last year and they raised a significant amount of money. It's genuinely taken me aback that five months later they are raising funding again.

Banking in the USA is a nightmare compared to the UK and Europe. Inter-bank transfers are instant and free in the UK. You use cheques. I rest my case.

>My hunch is that these are doing comparatively better outside the US because basic banking elsewhere is relatively worse than here. In my experience with at least Chase and Capital One the "big banks" have invested pretty heavily in their UI/UX and I haven't had any issues getting CX questions answered when I need to.

Would completely disagree with this. I suspect, in the UK, they're doing better because regulators have recently become much friendlier towards challengers. The UK has also generally been pretty good with encouraging new technologies - faster payments, CASS, open banking, cheque imaging etc have all been launched with varying degrees of success.

It's well known that banking technology is generally worse in the US -- you only have to look at the roll-out of EMV and contactless to see how slow-moving things have generally been there. As far as I know there's no direct equivalent to the UK's Faster Payments scheme, either [1]. Do any of your banks even support 3-D Secure?

Companies like Monzo are able to differentiate on _much_ more than just UX and customer support. The tech stack has been designed from the ground up, so payments and notifications are (at least to a human observer!) instant. You have novel services like Monzo.me that allow external people to pay into your current account ("checking account") via debit card instantly.

[1] - No, same-day ACH doesn't count.

My understanding was that basic banking in the US lags most of Europe; contactless infrastructure is poor, mobile payments non-standardised, charges for basic accounts & general fees are all more common, more barriers to current (checking?) account switching (this is standardised in the UK by BACs & the current account switch service).

It is a better environment for the challengers outside the US because there is better infrastructure & standardisation which allows them to compete with bigger incumbents.

Banking in the US is definitely worse than banking in Europe. People still use checks, are you kidding me?

The UK, where Monzo is from, has (from what I can glean as someone who has not lived in the US) a much better banking experience than the US. Cheques are rarely used by most people because bank transfers are instant and free,d there is a functional Direct Debit system for automated variable-amount billing, most bank accounts are free with the every-day services (payments, bank transfers, ATM withdrawals, cash deposits) also being free, EMV “Chip and PIN” payments have been the default for well over a decade, contactless is widely deployed, etc.

The difference from the US is probably that there are less institutional hurdles to establishing a new bank.

> these are doing comparatively better outside the US because basic banking elsewhere is relatively worse than here

That's.. the opposite of true - it's not even wrong. Banking in the US is stuck in the '70's, compared to Europe.

Barclays