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UK neobank Monzo has started to prepare for its launch in the US, according to sources familiar with the matter cited by TechCrunch. The neobank has already set up a small team in the US to help lay the groundwork of bringing Monzo to the country.

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Initially, Monzo will work with a banking partner, but it aims to apply for a regulatory license that will allow it to work independently as a bank. Rumors of Monzo's plans to launch in the US first emerged in February 2018, when its CEO, Tom Blomfield, stated that it was looking at such an expansion but not in the “near future.” However, looking at its efforts now, this launch may come sooner than previously expected.

The neobank plans to start with a lite version of its products in the US. This would be a similar approach to the way it established itself in the UK, where it first rolled out a prepaid card, followed by a fully fledged bank account later on, per TechCrunch.

Such a strategy would allow Monzo to build up a customer base and presence in the US, while also working on getting a federal banking charter at the same time. Additionally, having investors that are familiar with the US, including General Catalyst, Stripe, and Goodwater Capital, may help Monzo with this expansion, as they can provide the neobank with guidance and knowledge about the local market.

Monzo is wise to take a slow-and-steady approach to entering the complex US market, but it should make sure to use this time to tailor its products effectively. In the UK, Monzo offers users a debit card linked to its mobile app, which has many popular personal finance management (PFM) features.

These offerings will likely be met with high demand from US consumers as well, but Monzo should also consider rolling out new and US-specific products. Debit card use in the US has declined from 74% to 58% since 2013, while a third more households now pay with credit cards in the country, according to ValuePenguin. It would make sense for Monzo to bring new products to the US, such as a credit card, to ensure that it can cater to all customer needs.