German fintech firm N26 has announced its decision to pull out of Brazil and shift its focus back to its primary European markets. The move comes after the company tested operations in the South American country in November 2021 without a full-scale public launch. Over the next two months, N26 plans to close all Brazilian accounts and offer local employees opportunities within Europe.
This strategic decision marks a step back from competing with South American rival Nubank. N26’s unique approach in Brazil was characterized by “a little less ‘fin’ and a little more ‘care'”. Despite this retreat, the company confirmed that it will continue regular service in its other 23 markets.
N26 serves approximately eight million users across 24 predominantly European nations. It recently faced a penalty of €4.25 million by BaFin, Germany’s financial regulatory authority, for weak money laundering controls. In response to this, BaFin has instructed N26 to enhance its anti-money laundering measures, IT monitoring, quality assurance, and outsourcing controls.
In addition to traditional banking services, N26 has also ventured into the cryptocurrency market through a significant partnership with Bitpanda. This collaboration allows users to trade in nearly 200 cryptocurrencies, a feature that has gained popularity among N26’s Austrian customers.
Despite the strategic shift, N26 continues to handle transactions worth more than €100bn annually across its operational markets.