N26 raises $160M from Tencent and Allianz

https://techcrunch.com/2018/03/20/n26-raises-160-million-from-tencent-and-allianz/

by Artemis2 • 8 years ago

120 98 8 years ago

wslh• 8 years ago

It would be great to create a new bank from scratch solving basic issues current banks have. The difficult part is the regulatory aspect if they want to operate in different states beyound EU.

CalRobert3• 8 years ago

I think they aim to expand to the US. I'm an N26 customer and US citizen and they asked me to chat with them (paid) about whether I'd use them in the US, etc. (I quite like them, tbf)

snovv_crash• 8 years ago

As a US citizen using N26 in the EU, my main complaint is that I can't have any savings accounts (FATCA blah blah blah), so my entire balance is in the checking account that is flashed on the screen when I log in, and linked to my cards.

I don't want something with a high interest rate, or stock picker, just a way of putting a firewall between the cards and my cash.

Rjevski3• 8 years ago

Monzo (a successful UK challenger bank) has plans to expand in the US so hopefully they'll succeed!

scrollaway2• 8 years ago

I'm a huge fan of N26. Been using them as my primary bank for 2 years.

My main wishlist for them:

- Allow access to more "raw" data (eg. log of failed payment attempts and why they failed, etc)

- Move support back into the mobile app. It used to be there, now it's a pain to find a phone/email to contact. (The web UI still has live chat)

- Don't expire fingerprint auth after 30 days if I'm actively using it.

- Clarify the differences between the business and personal accounts. It's in a weird state right now.

- More default categories, better tagging, etc. The aspect of tagging your transactions is super cool, it's just a bit hard to use right now.

I'm a huge fan though and 100% recommend it to anyone living in Europe. If someone wants an affiliate invite, shoot me an email (profile).

gabrielizaias• 8 years ago

I've been using them for the past 4 months and haven't had to renew the fingerprint auth. Perhaps they solved it recently?

Numberwang• 8 years ago

I'll switch to them as soon as they support Sweden or Malta. HSBC is pure evil.

avh023• 8 years ago

oh jeez I was with HSBC in the UK, what a train wreck of a banking experience.

sitepodmatt• 8 years ago

A lot of people hate in-app support. Revolut (similar concept to N26) for example really screwed this up, someone drank too much AI and bot framework koolaid at a conference and now millions of users (and arguably the pecetion of the business) suffers. Having a email support method is a must.

scrollaway2• 8 years ago

Yeah I'm not talking about chatbot style support, but real live chat support. They have it on the web UI, it would be nice to have in the app again. But I'd settle for a contact form in the app like they used to have.

lloeki5• 8 years ago

Revolut (similar concept to N26)

Isn't Revolut a pre-paid debit card though? N26, in contrast, is a bank.

EDIT: oh, I see that "On 8 February 2017, Revolut launched UK current accounts, enabling its customers to get a personal IBAN" on their Wikipedia article.

a254613e2• 8 years ago

I've had them as my primary bank for about a year or so.

I would not recommend them to anyone, especially not as the main bank. Some issues I personally experienced:

- Double transaction entries (making monthly reports, subtotals, etc wrong).

- Failing to execute standing orders (not acceptable).

- Atrocious 9-5 support.

- Broken fingerprint login on certain android devices.

- Abysmal security [0]

- Couldn't log in few times (outside support hours), app/website unusable.

- A lot of other less severe bugs (categories being wrong in web and reports for example).

I've closed my account with then in October 2017, here's what happened since:

- I still get monthly reports about my closed accounts.

- I get various summaries e.g. the "Your 2017 with N26"

- They reported to SCHUFA (German credit rating agency) a month AFTER my account was closed that I opened an account with them (again).

- After I contact their legal department about a week ago and I demanded my data in accordance with German data protection laws, they started to apparently do something with my account, since now I get emails like that my phone has been unpaired and so on.

- For all the issues I've outlined above after closing my account I've tried contacting support. They ignore me after I clarify that my account should've been deleted.

This is just what I remember from the top of my head. I also paid for their premium N26 Black subscription.

[0] https://media.ccc.de/v/33c3-7969-shut_up_and_take_my_money

lloeki5• 8 years ago

Abysmal security [0]

At 24:57 in the talk, there is a specific section about "disclosure and conclusion", where the talker points out that N26 acted very professionally and that all issues have been solved. You can hardly say so about regular banks, which usually just ignore you or send you canned responses (I know, I tried to report some issues to two banks of mine, still unsolved after 3 years).

hobofan• 8 years ago

Also wouldn't recommend them. I was a early customer, and when they switched over from the underlying 3rd party bank to their own banking license, they had to swap out everyones credit/debit cards. I lost access to my account in the process and only after a very tedious process of going through their support was able to get it back. Just because you are a digital bank doesn't mean you don't have to provide good support.

Gudin• 8 years ago

Just gonna argue the "Abysmal security" part, because there's nothing wrong with their security and the source is bs as explained here: https://youtu.be/PNuAzR_ZCbo?t=634

germanier7• 8 years ago

I was with them when they were still a frontend to Wirecard Bank and called Number26. Not sure if it's gotten better since then but their support was much more unprofessional than any other German bank I've ever dealt with. It's important to notice that we have so-called direct banks (i.e. without a physical branch) for a few decades now and the competition had a long time to work out their processes.

Number26 was unable to provide actual, immutable account statements. They generated some PDFs for every month but they were often retroactively changed on certain events (e.g. if a merchant cleared a transaction more than seven days later). I was unable to get someone there to even recognize the problem.

Their terms of services stated that foreign currency transactions were converted using a data source made available to both parties. Naturally I asked for access to that data source. The one linked in the FAQ didn't match my actual transactions and was missing some currencies I used completely. Once again, support was unable to understand the problem at all and repeatly said that Number26 doesn't have access to the fx rates they use either. So much for the contract they themselve drafted.

I then closed my account shortly before the switchover to their own bank. The new terms said that transactions might not be processed on certain days announced on a paper at their Berlin HQ which I found pretty amusing (and have never seen in other terms). Hopefully that has changed now as well.

growt• 8 years ago

Same here, was kind of a early adopter in 2015 and I really want to like them, but they're making it very hard if not impossible.

For a startup that wants to disrupt banking, they have horrible UX (one example, when it was time to change creditcards because they changed the backend bank. A new card was sent and then the App asked for a 8 digit number on the card. I spent 2 days until I figured out, they want the number from the OLD card).

The advertise that everyone gets a small creditline with them (1000 eur, or so), but when I applied for that after 3 years being a customer I was denied completely (just wanted 200 Eur) for 3 Months or so.

The other points like security are already mentioned by the parent post.

tnolet• 8 years ago

This echos almost everything I heard from the people I know in Berlin that have an N26 account.

The glorifying interview with the CTO about there rockstar techstack makes this all kind of silly https://community.risingstack.com/how-n26-built-a-modern-ban...

They go on about idempotency etc. but everyone complains about double or non-existing transactions.

urlwolf• 8 years ago

The problem is that the alternatives are even worse. I'm with Deutsche bank, and I fear the stress levels that I get every time I have to do anything with them. They send paper letters for anything. Their login is horrendous, but so is everything inside it (easily 90's look and feel). I cannot get transactions older than 3 months. Customer service (in German, of course; not even in Berlin it's easy to get someone to speak EN) is the worst, even for DE standards. They make sure you feel mistreated, because they only care about big corp accounts. I have a business account that produces some serious revenue for them and they still treat me like I'm bothering them.

I don't use N26 because they don't have business accounts, but I would if they did.

trumpeta• 8 years ago

That's weird, I've been using them for ~2 years now and I have not had one of the issues you mention.

tgsovlerkhgsel4• 8 years ago

I am a customer, but not a huge fan.

- There is a standardized API for interfacing with banks, HBCI, which almost every other bank supports. Except N26, who stated that they have no plans to do so.

- Their app (which is the only real way to interact with the account - there's a web interface but it's clear that the app is meant to be the main way) used to be really bad. They gradually improved, to the point that I wasn't able to get an error message by just opening it, but the fact that that was a pleasant surprise is not a good sign.

- They repeatedly made misleading statements about the acceptance of their credit card (meaning that I'd be stranded at an airport had I not had another card), their support was generally slow.

- They lured users in with great conditions, then made them progressively worse.

The instant credit card usage notifications work well though, and since it's free... but I don't consider them good enough to use them as my main bank - I expect anything that goes even slightly outside of everyday mainstream transactions to go horribly wrong.

If they manage to gradually fix their issues, they could be great, but as of now, I feel like they're just another startup that wants to "disrupt".

Artemis22• 8 years ago

There is a standardized API for interfacing with banks, HBCI, which almost every other bank supports. Except N26, who stated that they have no plans to do so

Won’t that change when PSD2 comes into full enforcement?

pieterhg• 8 years ago

I don’t recommend N26. I was insulted on Twitter by their customer support staff after asking to close my account.

I couldn’t close the account through their website or app but had to send a paper form to Germany!

I wouldn’t call that an “internet bank”.

mschuster91• 8 years ago

I couldn’t close the account through their website or app but had to send a paper form to Germany!

This is a side effect of German banking regulation, not a fault of N26 (or any other Internet bank)

WordSkill3• 8 years ago

I'm a big fan of N26 too but I longer go around evangelizing it to my friends and family. I got literally hundreds of people to sign up last year.

I only discovered that support was no longer available in the app when I actually _needed_ support, it was frustrating wasting time trying to find something I was sure I had seen in the app before.

So, I still use my N26 account, and appreciate it in many ways but, if they are capable of making bad decisions like that, there will obviously be more cost-cutting once they have solidified their position in the market. I cannot, in good faith, evangelize a service that may end up being as bad as the traditional banks.

brunosutic• 8 years ago

I'm Croatia based I've been using revolut for a year now. My only complaint with all these "new banks" is: none of them supports Apple Pay.

Maybe now that N26 is going to become a real bank supporting Apple Pay will become a possibility?

spatzle• 8 years ago

Apple Pay is already supported by N26, in countries where Apple Pay is available.

lloeki5• 8 years ago

Confirmed: using it all the time because banks in France (except Banque Populaire) are hell-bent on not supporting Apple Pay, pushing their weight around for the local clusterfuck that is PayLib.

WordSkill3• 8 years ago

Not true of all N26 countries.

mnembrini• 8 years ago

There was an interesting CCC talk about N26 security in 2016

https://disruptive.asia/researcher-n26-security-gaps/

Their security seemed a bit lax back then

lloeki5• 8 years ago

The talk has been mentioned in a nearby thread, and includes a specific section about N26 response to the incident, which was deemed quite professional.

https://news.ycombinator.com/item?id=16627730

StavrosK• 8 years ago

I use N26 as my main bank, but there have been some annoyances/stupid bugs. For example, when I tried to make a transfer and used Greek in the description, the app got in a very weird crashy loop. The website's login screen looked weird on Firefox, the UX is odd (it requires you to confirm a transfer four times), and it takes them forever to fix these things.

Other than that, I really like them, and they're very innovative for a bank, but that's a very low bar. Hopefully they'll step up their game with this funding. Revolut, by comparison, is much more usable, although there are things I don't like there as well.

sajithdilshan• 8 years ago

I think a lot of expats in Germany uses N26 because it used to be easy to open an account without a registered address. But unfortunately, the e-postident doesn't work amymore for most of the South Asian passports (https://www.facebook.com/deutschepost/posts/1805883209423283). Hope N26 will introduce more ways of identification.

avh023• 8 years ago

Yeah I didn't have the smoothest onboarding experience with the identity checking (I'm not from a first world country) - however it eventually worked (Feb 2018).

I originally couldn't even request postident (verification by Deutsche Post at a local post office for those not familiar) - after an app update the option magically appeared to request postident.

What disappointed me was that I was on the phone with their customer support and apparently even if you have a residence ID (I'm assuming this should be considered a legal document proving your identity to the host nation since it's issued by them) that it would not allow me open an account. I really do hope they accept this legal form of identification for those with less luck.

I wouldn't say it's a racist thing, but it's certainly feels extremely personal when you can't open an account with an organization because of your nationality (or your national documents to be precise).

germanier7• 8 years ago

The electronic residence permit is legally not an ID card (even though it looks like one) and they are not allowed to use that as identification as required by banking laws.

cosmic_ape• 8 years ago

Can someone list the advantages of using this instead of a regular bank+credit card?

1) Monitoring spending in real time or on a weekly basis is useful, and this seems to make it easier. But just a tool for downloading, viewing and analyzing the data from a regular credit card site would suffice, and can be self made.

2) It creates competition for the regular banks, so they potentially would stop being hogs about some of the fees.

But what else?

purerandomness• 8 years ago

3) It's much quicker to get an account. There is absolutely no paperwork involved.

4) Concentrating only on one thing, they tend to get UI and UX much better than old-fashioned banks, who have to still serve clients who are skeptical about online banking and fill in paper-form money transfers and bring them to the bank in person.

Rjevski3• 8 years ago

UX and the fact that everything runs on a modern platform instead of legacy, COBOL-based rust.

rkachowski• 8 years ago

This is true, transactions are entered very quickly compared to most other banks in Germany, and the push notification on a transaction has saved me more than once (being immediatedly notified that Easyjet double charged an airfare, for example).

Having said that, the limited monthly access to ATMs and their bad history (closing multiple peoples accounts with no warning) makes me hesitant to recommend them. I use them as a tool for online purchases and little more.

coinerone2• 8 years ago

Transfers are faster, at least in Germany. Compared to the Deutsche Bank (my Main Account). Also the notifications are nearly Realtime. But the biggest selling point to me was the convenience of switching online- and foreign payments on and off wihin the app. I Use N26 heavily for travel and online payments.

badestrand• 8 years ago

I love how fast the notifications are with N26. When I am standing at the ATM I can feel my phone vibrating while the ATM still counts the money to give it out to me. Same when I pay with the credit card at a hotel for example, I know the transaction worked before I the credit card-machine spits out the receipt.

I know this doesn't sound like much of an advantage but it fills me with trust in the system and just feels very modern.

s_dev• 8 years ago

1. It's free or being very close to being free. Some European banks charge a quarterly fee unless there is minimum amount of Euros in the account.

2. The partner app you get is easy to use and offers full transparency about how many Euros in the account at that moment in time. This is stark contrast to some Irish banks who can't even give you a Bank statement on your account even if you walk in to the branch that holds your account. Which in this day and age is tantamount to being ridiculous.

3. The cards do look very nice.

4. The on boarding process is smooth and quick. Again in stark contras to some other banks who seem to want to stop you creating an account.

tgsovlerkhgsel4• 8 years ago

The reasons why I use them for my credit card (and only for that):

- No transaction fees and fair exchange rates as far as I know - Free - The instant (really instant, <5 sec) push notifications are nice

lloeki5• 8 years ago

(really instant, <5 sec) push notifications

Over here I get notifications before I even pull the card out of the reader, and sometimes even before the PIN terminal itself displays "payment accepted".

Also, getting notifications for SEPA transfers that turn out to proceed timely is kind of refreshing when you come from traditional banks with which you feel the cogs of a 20th century mainframe mindset that refreshes accounts (on workdays only FFS!) by performing nightly COBOL/RPG-processed EDI between AS400-or-something machines.

Also also, authenticating using a password of arbitrary complexity of my choosing to log in to my bank instead of an incremental account number and stupid 6 digit PIN that I have to type on a "randomized virtual pinpad" both vulnerable to shoulder surfing and a disaster of accessibility.

Also also also, why the hell can old banks only show me the last month or three of transactions is beyond me in the day and age.

Can someone list the advantages of using this

That's why I'll skip over the direct advantages and go straight to the indirect one being that N26 & al. may make old banks move their collective ass that is hopelessly stuck in the '90s.

shaqbert• 8 years ago

The key issue with N26 is their poor unit economics. Right now, they are losing money on most of the checking accounts, as they foot the ATM wholesale fee (though they limit it to 3 "free" ATM withdrawals per months).

The issue is that they don't have enough premium services to compensate for the "loss leader" like regular banks do. The hope from Tencent and Allianz is that they will add these now, and then move to great unit economics, but for now they are bleeding red ink.

215163831328308• 8 years ago

Their website[1] front page seems to state up to 5 'free' ATM withdrawals per month.

[1] https://next.n26.com/en-eu/

coinerone2• 8 years ago

Only 5 free withdrawals if you use your N26 Account as your Main Banking Account (more than 500€ per Month in incoming transfers or so i think).

hocuspocus• 8 years ago

Well, the business strategy for a bank isn't really rocket science. Right now they focus on grabbing market share, which isn't too hard in countries like Germany. They've also introduced a few products (savings, investment, insurance) as a broker, which allows them to gauge the demand among their customer base and develop popular products in-house in the future.

While I don't expect them to sell mortgages anytime soon, they have many other ways to make profits. And if they manage to keep their footprint low compared to the way big traditional banks are moving online, I'm sure they'll be fine.

Or they could end up being acquired. (I hope they're big enough not to, but consolidation is a real issue in retail banking).

dawhizkid3• 8 years ago

Maybe banks outside the US are terrible, but honestly in the US I find most "big banks" to be completely fine. JPM Chase, Amex, and Cap 1 started heavily investing in their digital units years ago and IMO it shows. Would not say the experience is perfect but I don't need perfect UX...I need reliability and stability.

One reason I would never move my primary banking to a startup is customer service. There's absolutely no way that a startup is going to have 24/7 online/phone support like the big banks do.

tome• 8 years ago

How do you pay your friend $100? Can you do it direct to their account simply knowing their name and some numbers?

dawhizkid3• 8 years ago

Venmo

dangrossman• 8 years ago

You just need an email address or phone number, and the money arrives in minutes.

https://www.zellepay.com/participating-banks-and-credit-unio...

Which is the US banks' answer to Venmo, Square Cash, PayPal, etc that have offered such a thing nearly worldwide for 20 years.

mindslight• 8 years ago

Yes, and even better, you can make your friend pay you $100 with only knowing their name and account number!

kuschku7• 8 years ago

One major advantage of N26 is that they’re the only bank in Germany offering a free credit or debit card without conditions.

All other banks require either > 30€/year fee for the card, or > X€/month income, or > X€/month spending.

Even the Amazon credit card has a 60€/year fee.

EDIT: Regarding the comments suggesting dozens of banks – they all have some conditions. You can’t open an account that only holds a balance for a few days per year, and is only ever used to pay e.g. Namecheap or the Google Play developer fee. Most people don’t want or need a CC in daily life, only to interact with shitty startups or US companies that assume everyone has a CC.

germanier7• 8 years ago

Neither ING-DiBa nor Consorbank charge a fee for their current account with debit Visa nor does DKB for their current account with credit Visa. They also don't require income or spending. There are other free credit cards as well such as those offered by Barclaycard, Santander, or Advanzia.

dawhizkid3• 8 years ago

Most banks in the US have a free tier, though the catch is usually that you need to deposit a certain amount each month through your job or keep an average balance above $X.

I think Cap 1 is completely free with no minimum balance needed.

Probably the best thing about US banks though is the insanely generous credit card bonuses...I've been churning credit cards for years and have taken many free flights including int'l first/biz and free hotel stays solely on bank credit card bonuses.

stadeschuldt2• 8 years ago

This is not true. Comdirect and DKB are just two banks who offer free credit/debit cards.

detaro2• 8 years ago

Have had a free CC with Commerzbank for ages, as a student.

stadeschuldt2• 8 years ago

I looked into N26 but their lack of HBCI support was a deal breaker for me.

hawski2• 8 years ago

I live in Germany for almost 3 years now and for the first half I just used EUR account of my Polish bank. I only needed an account here, because I moved to a new apartment. And to sign up for Internet connection available provider needed German bank account number. It's prevalent to pay for all recurring costs with Lastschriftmandat. That's totally alien to me. I prefer just to manually pay it myself with bank transfer. Generally it's a form to fill out, sign and send - then they go to your bank and get paid.

Anyways I tried with two other banks first. One did not answer at all. A second one after 4 weeks or so just answered that they will not open an account for me, with no reason why. With N26 it was really fast and pleasant.

From my Polish bank I have Visa card and at least in Berlin it's not widely accepted. N26 gives Maestro card that is accepted a bit wider. However German EC card is a standard one that will be accepted everywhere where cards are accepted, while it's not the same with Maestro. However there are many many places that require cash. N26 gives 3 free withdrawals. My Polish bank gives me free withdrawals everywhere. That's why I still use it. Even more, in Poland cards are very widely accepted. Lately I could get by with just a phone in my pocket - Android pay is supported.

N26 has quite nice application, but it does not even begin to compare to my Polish bank. In Polish bank when I want to setup a transfer it gives ability to fill out everything based on history. In N26 I have to copy the amount and the message, it's tiresome.

Now I think about account in more traditional bank to get EC card and set up join account with my wife, that's also not possible in N26.

jazzyk2• 8 years ago

Would you be willing to name the Polish bank? Are there any other banks providing similar services/support?

hawski2• 8 years ago

mBank. Funny thing is that mBank started as purely as an internet bank. Nowadays it has also stationary branches. I think that most banks in Poland had to up their game, because of mBank.

And you can have cheap transfers in EU between EUR accounts, even when the country does not use euro as the currency. It's around 1.something EUR.

nraynaud• 8 years ago

I mainly use my N26 card here in the US, because I believe the conversion rate is cheaper (I never actually checked).

If you are in the US, the instant notification of credit card swiping is mostly useless in restaurants, since it doesn't show the tip until the transaction is actually processed a long time later. A few restaurants ask you to go in the back with them to type your pin, because they have a chip reader, but they don't yet have the wireless "gameboy" (it just occurred to me that pin+tip might be a tall order, the pin protects the amount too).

atomwaffel• 8 years ago

(it just occurred to me that pin+tip might be a tall order, the pin protects the amount too)

Where I live, the card machines show you the total and ask you to type in the final amount (including tip) before you enter your pin.

twooclock• 8 years ago

Using N26 for last 6+ months. Love no fee on transfers, realtime notifications, their masterkey works worldwide (had no problems in eu, us and canada), easy to block/enable internet or abroad payments and daily limits. I don't do atm withdrawals though. Overall great deal for me sofar. Would recommend.

domenukk• 8 years ago

A paper about N26 Security https://www1.cs.fau.de/filepool/projects/n26/n26-roots.pdf

mlamat• 8 years ago

I have had N26 for more than a year. I use it for shopping, as a secondary account. I don't use cash anymore.

I've had no problems. But why do they have the "Statistics" button on their website if I couldn't use it since I registered???

homakov• 8 years ago

A year ago I had $100 balance and my $50 payment to some cafe turned it into $150. They added money instead of deducting it. That was fixed soon but that's how I still feel about N26.

N26 raises $160M from Tencent and Allianz

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