POCKIT, a financial services company catering to the "unbanked," has acquired its rival Monese, which is backed by HSBC.
This acquisition will create a combined entity serving three million customers, according to a report by The Times.
The financial terms of the deal were not disclosed, but Pockit is believed to have paid a modest sum for Monese.
Monese, founded in 2013 by Estonian entrepreneur Norris Koppel, offers current accounts and money transfer services as alternatives to traditional banks.
It serves more than two million customers across 30 countries and was the first mobile-only banking service in the UK. Monese was previously valued at £1 billion and had been seeking funds for survival.
Virraj Jatania, the CEO and co-founder of Pockit, described the deal as "transformational" and "great news for millions of customers poorly served by traditional banks." The combined company will process about £5 billion in transactions annually, reported the newspaper.
Monese's e-money and consumer credit licences will benefit Pockit by reducing transaction costs and allowing it to introduce lending products. Jatania expressed concern about illegal loan sharks preying on low-income families and highlighted that the acquisition would help address this issue.
Monese’s business-to-business arm, XYB, will remain separate, The Times reported.
Jatania will lead the combined business, with no plans for redundancies among the 100 staff joining Pockit. Monese and Pockit will continue to operate independently until a review is completed.
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