the analytics vault
Resources: 136 (72 new this week)
a Hipster Data Club product Hipster Data Club

Why neobanks are quietly bleeding money (and what comes next)

Original: The Slow Death of Neobank 1.0

May 25, 2025
19 min read
Opinion
Intermediate
The Slow Death of Neobank 1.0 — FinTechtris

Summary

Why most consumer neobanks failed to reach profitability despite scale.

Who This Is For

Founders
Business Analysts
Product Managers

Key Takeaways

  • Neobanks need users to spend $750+ monthly just to break even on acquisition costs in year one
  • Interchange revenue alone (1-3% of transactions) can't sustain the business model with high CAC and support costs
  • Moving from 'growth at all costs' to profitability requires subscription models or lending products
  • Paid marketing delivers poor quality leads while in-person acquisition is hard to scale consistently

Tools & Technologies

Visa card network Mastercard network KYC (Know Your Customer) systems Payment orchestration platforms Digital advertising platforms

Topics Covered

fintech neobank revenue-models unit-economics