N26 signs up 250,000 U.S. customers in first five months stateside

N26, the German challenger bank that officially opened for business in the U.S. in August, says it now has 250,000 American customers. Globally, the company recently reached 5 million customers.

Though it is sometimes assumed that mobile-only challenger banks attract an exclusively young clientele, the Americans who have opened N26 accounts are coming from different demographic segments, said U.S. CEO Nic Kopp.

“More than 40% of our customers are actually older than 35 at a global level, and we see similar trends here in the U.S. as well,” he said. “The age range is quite diversified and not necessarily just one type of segment.”

Kopp attributed much of the customer growth to the app’s positive ratings from users; in Apple’s App Store, N26 has 4.7 out of 5 stars.

“Social ratings are quite important to our users and sort of a testament to, 'Do my peers use it, do actual real people like that product, or is it just marketing speak?' ” Kopp said. “That's where we get a lot of customers.”

It also helped that the company got a lot of media coverage when it launched in the United States.

N26 offers five-minute account opening, a mobile banking app, person-to-person payments (through MoneyBeam), ATM use (through Allpoint’s network) and access to paychecks two days early if they are deposited directly. Its banking services are offered in partnership with Axos Bank. Users can set spending limits, lock their card if it is lost and enable or disable international charges.

N26 offers perks in the form of cash back and discounts from retail companies including Booking.com, Lime and Headspace. It offers subaccounts called Spaces, in which people can save for specific goals. It continually redesigns its navigation to keep the app as streamlined and easy to use as possible, Kopp said.

The company has marketed itself only through billboards in New York, Chicago and the Bay Area. Kopp said it has users in every state, though there are concentrations in those three metropolitan areas that have been at the center of its advertising.

The New York-based N26 team has made some adjustments to the offering based on user feedback. One issue was ATM use. Initially the company offered two free ATM visits per month. That was not enough, the company was told, so now N26 offers unlimited ATM transactions through the Allpoint network.

N26 raised $470 million in funding in 2019, which helped finance its launch in both the U.S. and Switzerland, as well as fund the opening of a new tech hub in Vienna.