Phone-only bank gains popularity

FRANKFURT: German smartphone-only bank N26 said yesterday that the number of customers using its online accounts rose to more than 300,000, tripling in size from a year ago, as the company marks progress as a pioneer in pan-European banking for mobile phone users.

The Berlin-based company is backed by Li Ka-shing, one of Asia’s richest men, and Peter Thiel, a co-founder of PayPal and an early investor in Facebook, along with other investors.

N26, which was founded in 2015, received its banking licence from German financial regulator Bafin last year. It offers online accounts for cash withdrawals, savings and insurance services that users manage on their mobile phones.

Valentin Stalf, N26 founder and chief executive, said in a statement that January and February 2017 showed its strongest customer growth ever, adding that, “We are on track to grow to a couple of million customers over the next years.”

Without the expense of branches or legacy computer infrastructure, mobilefirst banks can challenge established banks by promising lower lending rates and higher rates on savings.

It began offering services in Germany and Austria, then in Spain, France, Italy, Greece, Ireland and Slovakia. Late last year it added the Benelux countries, the Baltics, Finland, Portugal and Slovenia, marking 17 markets in all.

The company said it has processed more than €3 billion ($3.19 billion) in transaction volume and carried out 10 million credit card transactions in the past year.