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FINANCE

What is the digital German bank N26 that’s about to hit a million customers?

Berlin-based bank N26 is growing rapidly. In just three years, almost one million customers across 17 European markets have signed up, according to the startup’s founder. But what makes it different from other banks?

What is the digital German bank N26 that’s about to hit a million customers?
A customer using the N26 app on a mobile phone. Photo: DPA/obs/N26 GmbH

“We are now approaching one million customers,” N26 founder Valentin Stalf told Tagesspiegel newspaper in an article published on Monday.

In March, the company announced it had acquired around 850,000 customers. Relatively new to the financial services sector, N26 entered the market in January 2015.

Headquartered in Berlin and offering its services throughout the eurozone, the German direct bank claims that they are Europe’s first mobile bank.

Set apart from conventional banks, N26 doesn't have any physical branches, meaning its customers only have the option of doing their banking online via an app. 

Founder of N26 Valentin Stalf. Photo: DPA

Among the most popular products N26 offers are the basic current account (also referred to as a chequing account in North America or a Girokonto in Germany) and the premium Black account.

One of the major ways in which the digital bank stands out from traditional ones is that it offers its customers free cash withdrawals from most ATMs across Germany.

Moreover, no fees are charged when customers withdraw foreign currency abroad with their Black or Metal Mastercard. And all N26 products include foreign currency transfers.

“They’re going in a totally different direction than other banks,” Maik Klotz, a senior consultant in the payment and banking sector, tells The Local.

Whereas traditional German banks are bad when it comes to handling and operation, N26 as a product is “simple, easy to use and tech-driven,” Klotz says, adding that “smartphone users, millennials and digital natives” are the company’s target audience.

Despite a few other potential fintech competitors with N26 at the moment, “there’s no other bank in Germany today that’s comparable.”

The only downside with the mobile bank is that it doesn’t have any physical branches for customers looking to speak with someone in person, according to the consultant.

Klotz adds that when it comes to the issue of security, “it’s not more unsafe than other banks.”

N26 has plans to enter the UK and the US this year.

With DPA

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MONEY

Where in Germany do people have the highest disposable income?

An economic study has shown huge regional differences in income throughout Germany. So which parts of the country have the most to spend each month, and which are feeling the squeeze?

Where in Germany do people have the highest disposable income?

A study by the Economic and Social Sciences Institute (WSI) of the Hans-Böckler foundation reveals stark regional differences in disposable income in Germany. In some cases, households had as much as double the spending money of those in other parts of the country. 

Here’s where people have the most – and least – disposable income each month.

What is disposable income?

The WSI calculated disposable income as the sum of income from wealth and employment, minus social contributions, income taxes, property taxes and other direct benefits or taxes.

What’s left is the income which private households can either spend on consumer goods or save.

The study, which was based on the most recent available national accounts data for 2019, looked at the disposable income of all of the 401 counties, districts and cities across Germany.

Which regions have the highest and lowest disposable incomes?

The study found that the regions with the highest disposable incomes were in the southern states.

Heilbronn in Baden-Württemberg had the highest disposable income of all 401 German counties and independent cities – with an average per capita disposable income of €42,275. The district of Starnberg in Bayern followed in second place with €38,509.

READ ALSO: REVEALED: How much do employees really earn across Germany’s states?

By comparison, per capita incomes in the cities of Gelsenkirchen and Duisburg in North Rhine-Westphalia were less than half as high, at €17,015 and €17,741 respectively. These regions had the lowest disposable income in the country. 

The study also found that, more than thirty years since German reunification, the eastern regions continue to lag behind those in the west in terms of wages.

According to the WSI, the Potsdam-Mittelmark district is the only district in the former east where the disposable per capita income of €24,127 exceeds the national average of €23,706.

Do regional price differences balance things out?

The study also showed that regionally different price levels contribute to a certain levelling out of disposable incomes, as regions with high incomes also tend to have higher rents and other living costs.

“People then have more money in their wallets, but they cannot afford more to the same extent,” WSI scientist Toralf Pusch explained.

READ ALSO: EXPLAINED: When will Germany raise the minimum wage?

Therefore, incomes in the eastern states, adjusted for purchasing power, are generally somewhat higher than the per capita amounts would suggest.

That could explain why, even after price adjustment, the cities of Gelsenkirchen and Duisburg in western Germany continue to be at the very bottom of the list.

Saxon-Anhalt’s Halle an der Saale, on the other hand, which has an average disposable income of only €18,527, benefits from the lower prices in the east.

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