Monzo abandons application for US banking license

British challenger bank Monzo decided to withdraw from the application for a U.S. banking license.

Read also: N26 fined 4.25 million euros for money laundering

This comes after more than two years of negotiations with US regulators.

This was first reported by the Financial Times. “Following recent engagement with the OCC, we’ve decided to withdraw our banking license application for our US startup,” a spokesperson for Monzo said on 4 October.

In a statement, the bank says: “Following recent engagement with the OCC (Office of the Comptroller of the Currency), we’ve decided to withdraw our banking license application for our US start-up.”

“While this isn’t the outcome we initially set out to achieve, this allows us to build and scale our early-stage product offer in the US through existing partners and invest further in the UK.”

Monzo is set to compete with other fintech companies like Klarna or PayPal and offer buy-now-pay-later (BNPL) services.

However, Monzo’s version is going to be slightly different. A source close to Monzo’s BNPL project said it is going to feature affordability checks for customers – something rivals generally do not require.

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Monzo also informed about a widening £134m loss in 2020. This has come with an investigation by the FCA over potential breaches of UK anti-money laundering rules that had been ongoing since 2018.