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Comment by rchaud | Hacker News Reader

> The company is one of several so-called challenger banks taking advantage of the growing shift among consumers toward handling their finances on a smartphone.

As opposed to handling their finances on a website, like people have been doing for the past decade? Even the smallest credit unions have apps these days. What is "fintech" about this?

> The branchless bank is now making £4 on each customer it signs up to the platform, versus a £15 loss per customer last year, according to a company spokesperson.

Where's the GBP 2.5 billion valuation coming from then? There's not much detail at all in the article. I don't want to default to cynicism, but this seems like a company whose profile fits the current SV hype train, puffing up valuations and eventually taking the company public, all before a single penny of profit has been made.

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Not sure I agree with this. A huge number of young people I know in the UK have switched to Monzo as their primary bank account. The business model is simple: the same as any other bank. Their competitive advantage is:

1. Having better technical capabilities than traditional banks (they have apps, but they're usually limited and clunky).

2. Not having physical branches, and the associated costs.

The article was very light on details, so I'd appreciate if could you elaborate on the technical capabilities of the app. I get suspicious when I see comments like:

> One reason that led Y Combinator to invest, Hariharan said, “was the traction with which they hit 2 million users in the U.K., with engagement metrics that almost look like a social network.”

It's a bank app. I can't speak for most people, but I don't open my bank app more than a couple of times a month; it's to pay my CC bill, and to make the occasional bank to bank transfer. If I'm spending a lot of time in the app, I'm probably encountering a problem of some kind.

I also can't link "app engagement" with revenue. Banks make money on mortgages, lines of credit and other financial products. I suppose daily logins allow them to advertise this heavily (my bank does it too, and I hate it), but to draw a line from A to B is a bit of a stretch.

> it's to pay my CC bill

Most people in the UK don't put regular spending on a Credit Card. Nearly everyone will use their Debit Card for day to day spending.

A lot of the traction it has got has been with the 18-30 age bracket who are wanting better budgeting tools than what larger banks have offered.

Are you sure? All the best cashback offers are with credit cards, not debit cards.

Yes. Cashback from credit cards is mainstream in US culture, but not in the UK (maybe some people care about this, but only ~5% of my friends even have a credit card). Probably this difference is because card transaction fees are regulated to reasonable rates.

Reasons I've opened my Monzo app in the last week:

How much did my London Underground yesterday actually cost.

Send a Monzo request to a friend who said he'd pay for a taxi ride (he also has monzo, so I can just select his name and the amount, and all he has to do is press 'yes' when it pops up).

Check how much of my discretionary budget I had left to decide whether or not to buy a game.

Pay the window cleaner (bank transfer).

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