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CASE STUDY: how Mastercard works with digital banks

Monzo and Mastercard logoMonzo and Mastercard: building Europe’s bank of the future

Tell us a bit about how you came to the idea of building the company?

We were tired of the current state of banking in the UK. It felt like dealing with the past, when everything else was moving to the future. Banking was being left behind. So we decided to build something better – a bank that actually helps you every day, a bank that you can trust, a bank of the future.

What are milestones in your company history?

  • In February 2015, Monzo was founded (then called Mondo)
  • In February 2016 we raised £1 million in 96 seconds, the worldwide fastest crowdfunding raise in history.
  • In August 2016 we received our restricted banking licence from the UK regulators
  • In August 2016, we renamed from Mondo to Monzo
  • In January 2017, we reached 100,000 customers
  • In February 2017, we received more than £12 million worth of pledges for our second crowdfunding raise from more than 40,000 people
  • In April 2017, we received our full UK banking license
  • In May 2017, we reached 250,000 customers
  • Later this year, we’ll launch the Monzo current account

What are major challenges you have been facing when starting your business and finding the right cooperation partners?

As a startup, we need to move fast. That means hiring the right people and finding the right partners — the banking industry isn’t traditionally known for its speed and so when looking for the right partners, their speed and flexibility was a key consideration.

 At which step did Mastercard come into play? Why?

We partnered with Mastercard early on for our prepaid debit cards, which we wanted to use to validate the concept and start iterating on it with customers. That proved to be very popular with the market and we quickly expanded to hundreds of thousands of customers, even before launching our current account.

Why did you choose Mastercard as a partner instead of another company?

Mastercard proved to be supportive, flexible partners who were keen to be at the forefront of innovation and we’re very happy with that partnership.

What exactly contains the partnership between your company and Mastercard?

From the launch of our prepaid Alpha testing cards back in 2015 to now, the partnership has been based on testing and learning as we continue to build out our propositions. We hope this will continue to be the case as our current account debit card, which will launch later this year will also be a Mastercard.

Has there been milestones in the partnership? Which ones?

  • In October 2015: Launched Mastercard prepaid card
  • In January 2017: Reached 100,000 customers on Mastercard prepaid card
  • In May 2017: Reached 250,000 customers on Mastercard prepaid card
  • Later this year will launch Mastercard debit card with our current account

How do you see the future of finance/payment?

We believe the future of finance is global and mobile. People want to be able to do everything instantly, anywhere in the world, with no hassle from their mobile. Bank branches are dying. Waiting on hold on the telephone to access your bank account is dying.  Traditional banking is dying.

What role do you envision for you and Mastercard in this future development?

Mastercard is a global business, accepted across the world. That allows Monzo to grow out from the UK and across every other continent and know we can rely on Mastercard supporting us and enabling us to rapidly expand.

Please describe the value of the partnership with Mastercard

Mastercard have proven to be a flexible, responsive partner able to work with us as a fast growing, mobile first startup. Combining the trust and recognition of Mastercard with the innovation of Monzo has proven to be an excellent combination and we look forward to many more years working together.

N26 and Mastercard

N26 and Mastercard: Building Europe’s leading mobile consumer bank

Tell us a bit about how you came to the idea of building the company?
The idea was actually born, because the two founders, Valentin Stalf and Maximilian Tayenthal, were unhappy with the services they received from their banks. It was by no means contemporary, neither client focussed nor in any way convenient. The banking industry has been lagging way behind other industries with regards to digitalization and customer focus. Simply-put: Banking was mostly a hassle and no fun at all forgetting about the simple needs of customers- something that needed to change.

What are milestones in your company history?
Major milestones after founding the company were the launch of our product as the first mobile bank on the German and Austrian market with a fully digital signup. Following the launch we realized the amazing demand from customers and quickly hit 50.000 customers in Germany, this was certainly a big step going from a startup without a single customer to one of the fastest growing banks in the country. Another big milestone was getting our own banking license from the ECB. This enabled us to release many more products and functionalities over the last year. The license also allowed us to further accelerate our growth reaching 300 k customers in March 2017.

What are major challenges you have been facing when starting your business and finding the right cooperation partners?
N26 aims to digitise all products and services, traditional banks offer. We were the first mover in this market. Everything we do is centered around a state-of-the-art user experience. All partners must be able to cater to the best of class user experience, N26 stands for. Technology plays a vital role in achieving this goal. It was clearly a challenge to find partners that have the digital and therefore flexible infrastructure in the background to create unique and simple user experiences.

At which step Mastercard came into play? Why?
Quite early we recognised that Mastercard was one of the more dynamic players on the market that is open for new products and technologies. If you are a young company you look for partners who are kindred in spirit, drive and pace. Getting these qualities in a renowned brand that keeps up with the newest developments but also has a global network, it’s like hitting the jackpot.

Why did you choose Mastercard as a partner instead of another company?
A big selling point was how dynamic the company is and of course their extremely strong brand. This combined with the overall pricing and one-stop solution for issuance and processing was a core benefit. The Mastercard team is extremely experienced and super responsive. Working with such a professional team that brings so much experience to the table in the European market and also around the world, is a great pleasure and growing opportunity.

What exactly contains the partnership between your company and Mastercard?
Mastercard provides N26 with issuing and processing solutions that are essential for offering our product to the customer. Beyond this, they consult us with technical questions all around the topic of payment. Especially this knowledge support is priceless to us.

Have there been milestones in the partnership? Which ones?
The biggest milestone was, of course, when we signed the contract, after we became a licensed bank. Holding our first cards in hand and experimenting with the limits of card design was another big step. Testing and successfully processing the first transaction led to much excitement here as well. Another big step in the partnership was our further international expansion into now 17 European markets.

How did Mastercard help you build-up and grow your business?
As mentioned above, we took our first payment and processing steps with Mastercard as a licensed bank. We received a lot of support from the Mastercard team on the technical as well as strategic side to plan and execute our international expansion. As Mastercard is so open and interested in new technologies, we also appreciate all the effort they put in to help us deliver a new and much better user experience in payments.

How do you see the future of finance/payment?
We clearly believe that basic financial products are and will become more and more commodities in the longer run. The successful banks of the future will focus purely on the customers and fuel their products with the best suppliers on the market, e.g. credits could come from your own balance sheet, a peer-to-peer platform or a third bank fueling it, depending on the risk scoring a client has. In a nutshell that means successful banks will have lighter balance sheets, earn more out of commission income and less out of interest income. There will be other organisations, institutional investors or others that would step in with the liquidity to fuel such products. Only if you combine this platform approach with modern infrastructure that leads to a superior cost structure, one will be able to compete and survive. PSD2 and other standards will further accelerate this process.

What role do you envision for you and Mastercard in this future development? We are currently building one of Europe’s strongest retail banking brands and need strong partners for this. If Mastercard continues to deliver the brand value and speed they have delivered over the last years, we are excited to expand the journey we are taking together in Europe and beyond.

Please describe the value of the partnership with Mastercard
Mastercard is a dynamic player with one of the world’s most renowned brands. It is as fast and flexible and up to date with new technologies as a start-up. This combined with global infrastructure is something we are looking for.

Holvi and Mastercard logos

HOLVI and Mastercard – shaping the next generation of business banking

Tell us a bit about how you came to the idea of building the company?

Holvi was established in 2011 in Helsinki, Finland.  Our founders and many of the Holvi employees are former freelancers and small business owners themselves. Holvi started out by solving the everyday problems event organizers, associations and project workers come across in managing their finances. We quickly realized that there were more people having similar challenges and a larger demand out there for a service like ours. Actually a full segment of microentrepreneurs and small businesses – or Makers and Doers as we call them – who were currently being poorly served by traditional banks and other players.

Anyone who has ever started a business is driven by a great idea and passion to make it happen. They want to accomplish something, big or small, they have decided to follow their dreams and go for it. Sooner or later many of them get stuck in the time consuming administrative tasks and continuous financial management bureaucracy. Our purpose at Holvi is to change that. We want to allow our customers with what they need the most: time. We make running their business smoother and take care of their finances in the background.

Our goal has always been to become the preferred financial management service for micro-entrepreneurs and small businesses in Europe. We use a big part of our time with our customers, working closely with them and trying to understand their position. We aim to capture their daily challenges and turn those needs into elegant product features and solutions that help them save time, money and run their business more effectively.

What are milestones in your company history?

Our biggest milestones are from 2014 when we got our own independent license. We are a licensed Payment Institution, not a traditional bank. Holvi is authorized by the Financial Supervisory Authority (FSA) of Finland for operations across the EU. Another significant milestone for us has been the acquisition by BBVA in March 2016.

At which step Mastercard came into play? Why?

We started out by providing a business current account for our customers. It was always clear that as part of our product offering it is crucial that we can provide our customers with a payment card as well. We chose Mastercard as our partner and have been very happy about the collaboration. The Mastercard being attached to our Holvi account, our customers can make their life receiptless instantly. The card is seamlessly connected to our mobile app and our customers get real-time notifications on all purchases, they can save receipts with just one tap and have all their transactions easily categorised in their bookkeeping which is also available in our service.

Why did you choose Mastercard as a partner instead of another company?

The Mastercard brand is one of the most recognised financial brands in the world and highly valued in the eyes of our customers. For us it is important to work with partners that are the synonym for trustworthiness. Our mission is to provide borderless banking to our customers in the digital era – Mastercard knows no borders and works worldwide, just like our customers.

Has there been milestones in the partnership? Which ones?

The biggest milestone so far for us has been launching the card in April 2016 together with Mastercard. Our partnership is still relatively fresh but we’re already working together to bring new features through the card and our own service to our customers.

How did Mastercard help you build up and grow your business?

Adding the card to our product offering has allowed us to reach out to new segments and customer types and of course provide our existing customers with even a better product.

Please describe the value of the partnership with Mastercard

Mastercard is a symbol for borderless and reliable payments. We enable our customers – the European micro-entrepreneurs- to grow their businesses globally. A card that connects directly with our service and allows our customers to stay on top of their finances in real time is a value proposition we’re proud to provide with Mastercard.

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