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French payments app Lydia launches mobile bank

French mobile payments app Lydia has launched a new challenger bank proposition with plans to invest €100 million in the new venture and hire 400 people over the next three years.

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French payments app Lydia launches mobile bank

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Alongside its payments app, the company, now an e-money institution, distributes a full range of financial services to over eight million users.

Under the new strategic direction, Lydia will reposition its payments app as a simple P2P app for quick payments transfers between friends and contacts.

The banking aspect will be spun off as a new company, dubbed Sumeria, offering current accounts, joint accounts, savings, credit and investments alongside a dedicated Iban and asssociated Visa debit card.

The decision to split the business in two was made in part to avoid alienating users who just wanted a simple P2P payments app, without the associated banking services bundled in. So far two million of Lydia's eight million users have dabbled with the wider financial services offfering.

Sumeria has set a target of reaching five million customers over the next three years.

In a bid to offer a more personable approach, the company will also open a bank branch in Paris, modelled on the Apple Store's Genius Bar, providing hands-on guidance and support to people who want to open an account.

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