'A niche in the market': Dundalk's Cheetah Money says Ireland is ripe for digital-only banking

The fintech firm believes people are ready to turn their backs on the traditional banking sector.

By Jonathan Keane Reporter, Fora

THE FIRST IRISH fintech firm offering online-only banking products has eyes on reaching 20,000 customer accounts, with a European expansion on the cards.

Launching this week, Dundalk-based Cheetah Money provides deposit and payment services, including an IBAN and debit card, to users without the traditional branch-network or sign-up processes.

Managing director Michael Bellew said that consumers, specifically younger ones, are on the hunt for easier and more nimble banking solutions – and companies need to react to that.

“We saw that there was a niche in the market for these facilities and an alternative for traditional retail banking,” he told Fora.

“There were a lot of consumers out there that perhaps didn’t have the same faith as they had in the banks previously and found the application for those banks to be too cumbersome and unwieldy,” he said.

“We’re offering a more streamlined and more efficient online service for them.”

These services include an online-only current account and debit card for individuals with plans to further build out a business account product. It has 3,000 customer accounts already live.

Cheetah Money Launch Michael Bellew (centre)
Source: Niall Carroll

“I think we’ve seen it over the last number of years how the young Irish population has been very adaptive to different challenges that have been presented to them,” he added.

“We’ve just got this innovative sense about us and that we get out, pick up something and run with it, move forward and develop it.”

Cheetah may be one of the first Irish companies passed the post in launching a strictly digital banking service, but there are big players already commanding a large share of the developing industry.

Starling Bank, the UK-based mobile-only bank account founded by a former AIB executive, told Fora in June that it expects to launch here by the end of the year.

Meanwhile, Revolut, which scored $250 million in funding in April, has already been signing up Irish customers, with a target of 250,000 users here by the end of the year. German rival N26 has also been active in Ireland since early 2017.

Stripped down

Cheetah provides basic current accounts for consumers and charges a flat monthly fee of €4.95, as well as point-of-sale transaction fees of 20c. Some of its rivals offer free, basic services, with fees coming in for extra services or higher transaction amounts.

“The fees are transparent, we’re not like the other similar offerings out in the EU,” Bellew said.

While these all look like the features of a bank, Cheetah is keen to avoid the billing of “digital bank”.

The company wants to provide a very stripped down service to individuals and businesses, but that attitude doesn’t just apply to the customer-facing side of things.

It has no intentions of expanding into other banking services, such as lending, as the regulatory requirements could end up too cumbersome.

“We really only want a facility where we can deposit funds and discharge payments, so we’re not looking at lending facilities,” Bellew said.

Cheetah, which is based in Dundalk, is partnered with Irish-founded e-money firm Prepaid Financial Services (PFS).

PFS handles the regulatory compliance and the development of the debit card, which involves working with Mastercard.

Source: Shutterstock/SFIO CRACHO

PFS is regulated in the UK by the Financial Conduct Authority, meaning there is one area of cumbersome regulatory hurdles that Cheetah is acutely aware of – Brexit.

It’s something that “certainly can’t be avoided”, Bellew said.

“We’re in the process of attending to that at the minute. We’re looking at it on an EU-wide basis.”

Bellew is tight-lipped on how Cheetah Money and PFS will approach the issue, and if the companies will be seeking authorisation in other countries as a fallback.

A spokesperson for PFS said that it will take “whatever steps are necessary” to continue its services for clients regardless of jurisdiction.

Future plans

Bellew has a goal of hitting 20,000 Cheetah accounts in Ireland and beyond.

“We are looking at expanding that across the EU because the (debit) card can be operated across the EU. We have a number of moves in the pipeline in that regard already,” Bellew said.

The Dundalk-based company, which has a team of eight and will likely hire three more before year’s end, has been largely bootstrapped until now.

“Thankfully, to date, we’ve had our own investment into the project. We’ve had support from government agencies in terms of local enterprise and we are currently looking at a next round of funding on this,” Bellew said.

The right tools are needed as the growth of fintech isn’t abating any time soon, he added.

That has been recognised elsewhere in the country with Enterprise Ireland recently launching a €750,000 fintech fund for startups.

“If you look at all the other fintech companies that have started out and where it’s gone today, I think it’s a testament to the whole sector,” Bellew said.

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