Monzo, one of a number of so-called “challenger” banks in the U.K. aiming to re-invent the current account, has had the “restrictions” on its banking license lifted and says it will begin rolling out full current accounts to its pre-paid card and beta app users.
Whist this might seem like a regulatory technicality, it’s a significant milestone for the young London-based startup and means the U.K. regulators are confident Monzo has the required technology infrastructure and capital required to begin looking after customer deposits on a much-wider and protected scale.
This can also include being able to lend those deposits out at some point in the future, which, like rival Starling and traditional banks, forms the basis of the company’s initial business model.
That Monzo has met the regulator’s capital requirements is no surprise. The U.K. challenger bank recently announced the close of its latest crowdfunding round, which attracted more than £12 million in pledges and formed part of its Series C funding round of £22 million.
To that end, Monzo says it will begin offering current accounts to “small numbers of people over the next few months” as it further develops its systems and to generate more feedback from customers. After which — whenever that is — it will start offering the current account to all of its existing 150,000-plus users as well as new customers.
I’m told the Monzo current account will have standard current account features, including Faster Payments, Direct Debits, international transfers, and, crucially, FSCS protection — the latter part of being granted a banking license. And of course you can expect Monzo’s existing and more innovative functionality, such as budgeting and bill splitting, real-time alerts of transactions, geotagged transactions, and a lot more.
You can listen to my interview with Monzo co-founder and CEO Tom Blomfield recorded in late February below: