Now playing
01:34
Global Payments CEO: Pace of innovation is driving deals
AirTag
Apple
AirTag
Now playing
01:17
See AirTag, Apple's new device for tracking your lost stuff
Google Earth's new timelapse feature
Google
Google Earth's new timelapse feature
Now playing
01:09
Google Earth's new Timelapse feature shows 40 years of climate change in just seconds
Now playing
01:32
Scientists turned spiderwebs into music and it sounds like a nightmare
Elon Musk's Neuralink says this monkey is playing Pong with its mind
From Neuralink/Youtube
Elon Musk's Neuralink says this monkey is playing Pong with its mind
Now playing
01:41
Elon Musk's company says this monkey is playing Pong with his mind
CNN
Now playing
02:36
The truth behind Covid-19 vaccines for sale on the dark web
Now playing
05:41
NFTs have completely transformed these digital artists' lives
Boston Dynamics
Now playing
00:48
Boston Dynamics' newest robot has tentacle-like grippers
Energy and Commerce Committee/YouTube
Now playing
02:50
US lawmakers question tech CEOs on misinformation
Now playing
00:55
This robot's 'self-portrait' NFT just sold for nearly $700,000
Now playing
03:19
Slack CEO: We made an 'unforced error' in DM roll out
WASHINGTON, DC - FEBRUARY 10:  Chairman Sen. Bernie Sanders, (I-VT) speaks as Neera Tanden, President Joe Bidens nominee for Director of the Office of Management and Budget (OMB), appears before a Senate Committee on the Budget hearing on Capitol Hill on February 10, 2021 in Washington, DC. Tanden helped found the Center for American Progress, a policy research and advocacy organization and has held senior advisory positions in Democratic politics since the Clinton administration. (Photo by Andrew Harnik-Pool/Getty Images)
Pool/Getty Images
WASHINGTON, DC - FEBRUARY 10: Chairman Sen. Bernie Sanders, (I-VT) speaks as Neera Tanden, President Joe Bidens nominee for Director of the Office of Management and Budget (OMB), appears before a Senate Committee on the Budget hearing on Capitol Hill on February 10, 2021 in Washington, DC. Tanden helped found the Center for American Progress, a policy research and advocacy organization and has held senior advisory positions in Democratic politics since the Clinton administration. (Photo by Andrew Harnik-Pool/Getty Images)
Now playing
03:04
Sanders: 'I don't feel comfortable' about Trump's Twitter ban
LONDON, ENGLAND - JANUARY 16: Prince Harry, Duke of Sussex, the Patron of the Rugby Football League hosts the Rugby League World Cup 2021 draws for the men's, women's and wheelchair tournaments at Buckingham Palace on January 16, 2020 in London, England. The Rugby League World Cup 2021 will take place from October 23rd through to November 27th, 2021 in 17 cities across England. (Photo by Chris Jackson/Getty Images)
Chris Jackson/Getty Images
LONDON, ENGLAND - JANUARY 16: Prince Harry, Duke of Sussex, the Patron of the Rugby Football League hosts the Rugby League World Cup 2021 draws for the men's, women's and wheelchair tournaments at Buckingham Palace on January 16, 2020 in London, England. The Rugby League World Cup 2021 will take place from October 23rd through to November 27th, 2021 in 17 cities across England. (Photo by Chris Jackson/Getty Images)
Now playing
03:19
BetterUp CEO explains Prince Harry's role at the tech startup
An NFT digital home called Mars House by Krista Kim Studio Inc. has sold for $500,000
From Krista Kim Studio Inc./SuperRare
An NFT digital home called Mars House by Krista Kim Studio Inc. has sold for $500,000
Now playing
01:11
This digital home might cost more than your actual home
Rally Studios
Now playing
02:13
One-shot drone video of bowling alley mesmerizes internet
MyHeritage
Now playing
01:01
Watch old photos come to life using AI
(CNN Business) —  

Britain’s hottest banking app is coming to the United States.

Monzo, known across the United Kingdom for its signature bright coral cards, said Thursday that it’s planning launch events in Los Angeles and other major US cities.

The move is a big gamble for the startup, which has gained massive popularity due to its easy-to-use interface and appeal among young professionals.

“It’s attracting customers who initially buy into the hype, and [then] realize it’s a better banking experience,” said Alessandro Hatami, managing partner at Pacemakers, a digital banking consultancy.

That doesn’t mean the United States is a sure bet.

Navigating fintech regulation is much harder in America than in much of Europe, since companies have to gain approvals state by state. Plus, there’s already plenty of competition for deposits, from traditional banks to tech companies such as Paypal (PYPL).

Monzo is known for its brighly colored cards.
Shutterstock
Monzo is known for its brighly colored cards.

Monzo, which was founded in 2015, has more than 2 million users in the United Kingdom. It says it’s adding 200,000 more each month.

UK clout

The company is valued at nearly $1.3 billion, according to CB Insights. It has some support in the United States; Joshua Kushner’s Thrive Capital is an investor.

The app has been able to build a fan base because it’s fast and intuitive, Hatami said. Instant spending notifications and no fees on international payments have served as a major draw.

Those features will also be available in the United States, according to a spokesperson, though the company said will take time to build out a full suite of offerings.

Monzo still has room to grow in the United Kingdom, according to John Cronin, financial services analyst at Goodbody. But it makes sense for the bank to see if its model can work in the United States, which is an extremely fragmented market without a dominant player, he said.

Challenges ahead

Among the biggest challenges for Monzo will be differences in regulation. UK regulators are known for being friendly to fintech companies. The environment looks different in the United States.

“US regulators are not that savvy as far as financial services are concerned,” Hatami said. “They’ve either been oblivious on regulation, or incredibly strict.”

Monzo was able to obtain a banking license in the United Kingdom in April 2017, which allowed users to perform bank transfers and set up services such as direct debits and deposits.

It won’t enter the US market with such a permit. Instead, the company is partnering with the Ohio-based Sutton Bank, which overseen by the Federal Deposit Insurance Corporation.

The United States is also home to different spending and saving trends. What tends to attract attention is credit cards that come with lots of reward points. And mobile payments are not yet ubiquitous in America the way they are in parts of Europe.

Hatami said that he thinks Monzo will be adaptable and could even adopt a points scheme down the line.

“They’re very good at understanding what you actually want to do with your money,” he said.

The startup will have no shortage of competition. It will come up against Venmo owner Paypal, other startups like SoFi and traditional banks such as JPMorgan Chase (JPM), which have been pouring money into their digital offerings.

Then there’s the threat of Silicon Valley getting into the payments space. The real danger for Monzo is that Facebook (FB) or Amazon (AMZN) will get involved in online banking or payments in a big way, Cronin said.