A Monzo debit card being used at a payment terminal.
LONDON — British financial technology firm Monzo has withdrawn its application for a U.S. banking license following discussions with regulators at the Office of the Comptroller of the Currency.
The London-headquartered mobile banking app said it “isn’t the outcome” it initially set out to achieve.
The news was first reported by The Financial Times on Monday and confirmed to CNBC by a Monzo spokesperson.
Monzo reportedly started to apply for a U.S. banking license in April last year as part of an effort to expand its userbase, but the talks with the OCC do not appear to have gone well.
“Following recent engagement with the OCC, we’ve decided to withdraw our banking license application for our U.S. start-up,” the Monzo spokesperson said in a statement.
“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 U.S. through existing partners and invest further in the U.K. We have big ambitions for Monzo U.S. There are many routes to market we’re exploring that have been successful for other market entrants who are now major players.”
Monzo, which did a soft launch in the U.S. last June without a full banking license, is one of several so-called challenger banks that operate with only an ATM card and an app. These are new digital banks that are looking to take a slice of the massive financial services sector.
The start-up, which competes with the likes of Chime, Britain’s Revolut and Germany’s N26, successfully secured a full banking license in the U.K. in 2017, allowing it to offer more revenue-generating products to its customers.
Hundreds of thousands of Brits use Monzo as their main bank account but the company is yet to turn a profit. It reported a £130 million ($181.68 million) loss for the year to February, up from £114 million the previous year.
Last June, Monzo said the disruption resulting from Covid-19 has led to “significant doubt” about its ability to continue “as a going concern.”
The company also saw its market value slashed by 40% to £1.25 billion ($1.7 billion) around the same time.