Neobanked - 019 Competition intensifies

Even the non-Neobanks are challenging traditional banking services now.


Throughout 2020 I’ll be publishing a newsletter called Neobanked. Issue 019 is below and you can subscribe here. Any thoughts or ideas are always welcome, get in touch!


Welcome to Neobanked, a newsletter focused on the quickly evolving UK digital banking market. I hope to gather enough interesting tidbits and news to share this every two weeks.

For me, Neobanks are digital-only offerings that apply internet economics (i.e. zero marginal costs) to the banking sector. My focus will be on companies such as Monzo, Revolut, and Starling.

Through this newsletter I hope to cover each of these companies as they continue to grow within the UK and beyond. Some of the regular features will include user number growth, new product/feature releases, and links to relevant interviews and analysis.


News this week

Atom expected to raise £100m and re-enter mortgage market

Atom’s faced significant challenges from the collapse of a significant backer (Woodford’s Patient Capital Trust) to continued losses. Now the digital lender hopes to take advantage of the optimistic housing market, stating they had enough capital and liquidity to support the bank for another year.

Revolut hits 500,000 SME customers in three years

Their SME business proposition launched in July 2017 across Europe and has expanded to include features such as direct debit, open banking integrations, expense management.

Monzo announces confusing fee structure

New fees for cash withdrawal and replacement cards apply to customers that Monzo determines are not regular users or Monzo Plus customers. Regular users as those who pay in £500 monthly, receive a pension / benefit / student loan payment, or have a joint account - these users will receive higher allowances for both items.


New and upcoming feature releases

Curve app introduces loyalty cards

Added as a new tab in the app, users can scan the barcode of a physical loyalty card to produce a digital version. Any merchant card can be added, examples include a indie coffee shop or barbers. A note of caution, the reason some stores haven’t added support for Apple or Google Wallet loyalty cards is due to a limitation of their in-store scanners - many can’t scan digital barcodes.

Longer term, Curve hopes to enable both loyalty and payment with one card swipe / tap.

Zopa Bank launches first product, a fixed term saver

Customers can lock in rates of up to 1.3% with 1-5 year products. This marks the beginning of Zopa’s shift away from P2P products and grow revenue 10x in the next five years.

PayPal launches 0% interest ‘buy now, pay later’ option

Called Pay in 4, the interest free instalment plan is available for US merchants. Merchants will receive the total purchase upfront while customers split their payment to PayPal over a six-week period. PayPal has offered a payment delay option for a while; this is their first attempt at point of sale instalment plans.

Plaid enables standing order in the UK

Following their Payment Initiation authorisation in April 2020, Plaid has rolled-out standing order creation as part of their API. Businesses can now use their Open Banking integration to allow end customers to create repeating payments.


The large number of banking-related features launched by non-traditional banks or even Neobanks highlights the increased competitive landscape all banks face. Embedded financial services will likely continue to dominant the fintech space - many of the foundational layers are widely available as Banking-as-a-Service proposition. The barriers to entry within financial services continue to fall.

Written on September 6, 2020