Add Monzo to the growing list of digital banks exploring the mobile phone market.
The U.K. FinTech is weighing the launch of its own digital SIM and monthly contracts, the Financial Times (FT) reported Monday (Aug. 18), citing sources familiar with the matter. The report added that Monzo confirmed it had entered the “early stages” of its plan.
“When we heard from our customers that mobile contracts can be a pain point, we set out to explore how we could do this the Monzo way,” the company said.
As the FT notes, Monzo is now the third FinTech this year to try to drive new revenue from the mobile sector, following recent announcements from Klarna and Revolut.
According to the report, Monzo would likely become a mobile virtual network operator, serving customers without building its own underlying infrastructure. Instead, these services piggyback onto major telecoms networks and usually end up undercutting them on price, the FT added.
James Robinson, senior analyst at Assembly Research, told the news outlet that these new entrants could have a “significant” impact on the British mobile market.
“[These companies] have millions of customers in the UK to cross-sell services to and will propose attractive offers on price and other terms such as roaming [charges],” he added.
The news comes a little less than two weeks after Monzo announced it now has more than 13 million customers. That figure includes 12.5 million personal banking customers — 20% of U.K. adults — and upwards of 700,000 business customers, with Monzo adding roughly 1 million customers in the last quarter alone.
In other digital banking news, PYMNTS wrote last week about the evolving relationship between credit unions (CUs) and FinTechs.
The PYMNTS Intelligence/Velera report “From Rivals to Partners: The Rise of Credit Union-FinTech Collaboration” found that this shift is largely fueled by increasing member expectations for robust mobile banking and seamless digital payment solutions, which in turn give CUs the chance to grow at scale.
“The shift from competition to collaboration is seeing CUs become FinTech clients. In November 2023, 16% of FinTechs that engaged with CUs viewed them as rivals. By November 2024, that figure plummeted to 1.9%,” the report said.
“Over the same period, the share of FinTechs identifying as vendors to CUs soared to 98%. FinTechs’ growing recognition of CUs’ desirable attributes as customers includes the fact that these banks have decades of history as member-first models and a stable, loyalty-driven consumer base.”
Source: https://www.pymnts.com/
