Monzo is preparing to enter the UK mobile phone market with a digital SIM product, a move that could intensify competition among established telecom operators while broadening revenue streams for the digital bank.
The London-based lender, founded in 2015, confirmed it is in the early stages of developing an eSIM, which allows customers to connect to mobile networks without a physical card. If rolled out, the service could position Monzo to offer mobile contracts directly to its 13 million customers, placing it in direct competition with Vodafone, Three and BT-owned EE.
A Monzo spokesperson told the Financial Times: “Monzo is known for transforming products – and an entire industry – to deliver a great experience for customers. So when we heard from our customers that mobile contracts can be a pain point we set out to explore how we could do this the Monzo way, and are in the early stages of developing this idea.”
The initiative comes as financial firms such as Revolut and Klarna also test entry into mobile services, putting pressure on incumbents in the telecom sector.
The launch could strengthen Monzo’s financial position ahead of an expected initial public offering. The bank was last valued at GBP 4.5 billion in October 2024 during a secondary share sale, after securing GBP 500 million in fresh funding earlier that year. While Monzo’s valuation lags behind Revolut’s USD 45 billion, its UK-focused growth and full banking licence have given it regulatory stability its larger rival has yet to secure.
Monzo’s expansion follows recent compliance challenges. In July, the Financial Conduct Authority fined the company GBP 21 million for shortcomings in financial crime controls, which allowed some users to open accounts with addresses including Buckingham Palace and 10 Downing Street. Chief executive TS Anil said the penalty “drew a line” under past issues, noting that “substantial improvements” had since been made.
