Peter Thiel-backed digital bank N26 is considering a cash back-type offering as it eyes US expansion


N26 team

  • N26, a European digital bank, is considering developing some type of earn-as-you-spend offering as part of its launch in the US scheduled for later this year. 
  • Nicolas Kopp, US CEO of N26, told Business Insider the fintech needs to address US consumers’ desire to get something in return for using a specific card or banking product. 
  • The digital bank raised $300 million in Series D in January to value it at $2.6 billion, making it the most valuable fintech in Europe. 

N26 has built a successful digital banking business in Europe that’s helped it nab over $500 million in funding and a $2.6 billion valuation. 

But as it prepares for a launch in the US later this year, the Peter Thiel-backed fintech is considering ways to better appeal to American clients. 

Nicolas Kopp, US CEO of N26, told Business Insider one nuance between the US and European markets is American customer’s expectation of some type of points program with their banking products.

“Another thing that we need to address is this attitude of a lot of US consumers around earn as you spend,” Kopp said. 

Read more: A Peter Thiel-backed fintech that aims to be ‘a mixture of Venmo, Zelle, Mint and Chase’ is launching in the US

N26’s standard account in Europe currently doesn’t have any points or cash-back programs, Kopp said. N26 Business, which is geared toward freelancers or the self-employed, does offer .1% cashback on purchases made with the account’s Mastercard. 

Kopp declined to comment on how exactly how N26 would roll out the program beyond saying it would function slightly differently than a traditional points program typical of many credit cards. 

“We are thinking through an alternative to how we can allocate to that side of the US audience that is very aware of what they get in return for using a specific card or banking product,” Kopp said. 

Points and cash-back programs that incentivize spending have become almost table stakes among banks and credit cards in the US. JPMorgan Chase’s Sapphire Reserve card, which launched in 2016, kicked off a fight amongst firms to tap into an industry that has $183 billion in fees and interest. 

Nowadays, seemingly any new banking product has some type of earn-as-you-spend feature. Apple’s recently launched credit card will have 2% cash back. 

However, cash-back programs are a double-edge sword as so-called ‘super users’ of the card are able to rack up big rewards, cutting into credit card companies’ profit margins. 

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