Revolut.com Review – Pros & Cons of Banking with N26
- Cheap international transfers
- Real money saver for travellers
- No hidden exchange rates
- Simple signup
- Money Transfers without bank account
- Proof of residency required
- Not for real digital nomads without home base
Revolut is a FinTech company that solves some of the problems many people are facing with traditional banks. In particular, frequent travellers, who normally have to deal with excessive additional fees on top of the current exchange rates and high fees for payments abroad. Peculiarities of the financial world that have no place in a so-called globalized world.
Revolut.com offers fast, cheap money transfers abroad, peer-to-peer payments as well as cheap card payments abroad and ATM withdrawals at no or low cost.
The FinTech Startup was founded in 2015 by Nikolay Storonsky and Vlad Yatsenko, with headquarters in London. As a regulated European financial services provider, the company holds a special banking licence from the European Central Bank.
The core of Revolut’s Services is the debit card, which can be obtained for payments and ATM withdrawals, as well as the modern app, which is used to easily control all banking activities.
Revolut(ion) on the Credit Card Market
Revolut is a free, creation-free MasterCard prepaid credit card that actually represents a small revolution. This card can be used in so many combinations you might want to know about.
But one after the other. First you will learn the actual functions of the card, then the almost unlimited combination possibilities. Finally, you will read a few subtleties and the known disadvantages.
1. Functions of the Revolut App + MasterCard
The card has 3 card currencies simultaneously: Euro (EUR), US Dollar (USD) and British Pound (GBP). In these 3 currencies you can use the card account for:
- Maintaining the balance 1:1 in the respective currencies
- Issuing the balance 1:1 in the respective currencies
- Switching between currencies
-> exchange is to the interbank rate without deduction or fees. To my knowledge, this is the best course private customers can realize, where else can I get it?
- Transferring credit to other Revolut customers in real time
- Unloading the card, i.e. deduct/pay credit to your own accounts.
Withdrawals and payments do not cost any fee worldwide, except for ATMs which display such fees beforehand (= no foreign assignment fee).
If the card is used in one of the above 3 card currencies, the amount is debited 1:1 to the corresponding credit balance. If the card is used in any other currency, the amount is changed in real time to the current interbank rate.
The actual functions were the same – now to the
2. Possible Use Cases
The most obvious use is of course a holiday in one of the three card currency countries: As a Euro resident, you pay Euro 1:1 into the card, change to the best possible exchange rate in GBP or USD, and then pay 1:1 in the respective currency.
This also applies to currencies that are pegged to one of the three card currencies: Bulgaria, Bosnia & Herzegovina, Kosovo (each 1.95583 to the Euro), some Arab currencies are pegged to the USD with strangely crooked rates (United Arab Emirates, Qatar, Lebanon). You get exactly the peg rate, without any tricks.
The card is also suitable for holidays in countries with a completely different currency, whereby the conversion takes place at the moment the card is used.
Cheap International Money Transfers
Money Transfers to Relatives:
(especially in developing countries, Western Union is otherwise often used in that case).
It would be much better if both sender and recipient had a Revolut card. The sender pays the amount to be sent on his own card and sends it via Revolut to the recipient.
The recipient can then withdraw and/or pay at the average rate in the destination country. This should save you a two-digit percentage compared to Western Union!
If you want to change money between the card currencies, you pay 1:1 in one card currency, change it via the app and pay it back yourself at the other end.
Unfortunately money cannot be sent to the following countries:
Nigeria, Belarus, Burundi, Guinea-Bissau, Bosnia and Herzegovina, Yemen, Lao People’s Democratic Republic, Burkina Faso, Algeria, Sudan, Guyana, Democratic People’s Republic of Korea, Cuba, Eritrea, Iran, Cambodia, Panama, Democratic Republic of the Congo, Egypt, Central African Republic, Iraq, Angola, Haiti, Liberia, Pakistan, State of Palestine, Guinea, Afghanistan, Tunisia, Timor-Leste, Myanmar, Mozambique, South Sudan, Congo, Venezuela, Tajikistan, Libya, Lebanon, Syrian Arab Republic, Swaziland, Ukraine, Uganda, Sierra Leone, Vanuatu, Côte d’Ivoire, Somalia, Zimbabwe
Cheap international Bank Transfers:
As a replacement of Transferwise/Currencyfair or a direct bank transfer with an unfavourable bank exchange rate. You probably won’t get a better exchange rate anywhere.
You can also change speculatively: deposit, change, wait, change back. If you have the right hand, you win, otherwise you lose. As it is with speculations.
Latvian current account combined with Revolut Card
A completely different application is the combination with a Latvian current account. If you are about to free yourself from the debt trap and no longer have a bank account in your European home country, or only against horrendous fees, you can easily switch to a Latvian account. The main disadvantage of the Latvian account is the costly use of cards. To avoid those high fees you can transfer money from Latvia to your Revolut account via a low-cost SEPA transfer in EUR, and the use of cards is free of charge.
There are 3 different packages available. With the Standard plan which is free of charge customers already enjoy no fee ATM withdrawals from a free Euro IBAN account (up to €200 per month) and foreign exchange in 29 fiat currencies up to €6000 per month without the hidden fees traditional banks usually charge on top. With this plan there is also a free UK account included. For more service features, customers can choose from the 2 paid plans:
3. Important Details you should know in Advance!
Dynamic Currency Conversion
As with all other cards you have to be careful not to use DCC “dynamic currency conversion”.
Short explanation for quick reader: The card is issued in the UK and is therefore always recognized as a GBP card. For example, if you want to pay 1:1 in EUR, the booking must arrive as an EUR booking at Revolut. However, both ATMs and payment terminals often ask whether you “conveniently” want to settle in your “home currency” (here GBP). If you get involved, the amount would be converted into GBP at the DCC rate. So it is no different than with other cards: Reject DCC, problem solved.
For interested readers here is the challenge with DCC explained in detail: With the knowledge of this page you will save up to 11 % of the expenses abroad in the future!
The PIN for the card can be seen in the app; it is not sent by post. You can also change the PIN in the app.
My card was blocked for the time being after the PIN was changed. The following procedure does not always seem to be necessary, but if you proceed as follows, the PIN change will always work:
- After the change, log out of the app (Profile / Log Out), and then log in again. (Not “only” close the app!)
- Then use the card for the first time at an ATM (not at a payment terminal).
- The new PIN is used immediately at the ATM.
If the card is used, each transaction is immediately confirmed via the app.
If you hold the smartphone next to the payment terminal, the app appears at about the same time as the terminal display shows “Payment processed”. For third currencies incl. exchange rate received.
The card is immediately made available virtually when the app is downloaded. To receive the card physically you have to order it (Profile/My Card/order physical card).
The virtual card can be used immediately, a “real” card can be ordered free of charge and will be delivered within one week!
This is free of charge and took me 5 days. Until then you can already use the card online. The name is not shown on the virtual card – of course the name with which you registered is valid.
You can use the card without further ado up to a run of (only) 1.500 GBP per year.
To increase the limit to 30.000 GBP per year you have to identify yourself. This is very easy with the app: Click on “verify identity” in the profile, a selfie of face and identity card or passport, done. This takes just one minute.
Of the three card currencies, one is defined as the “main currency”: If you live in a Euro country, that’s the EUR, you live in £land of GBP, otherwise you always live in USD. This becomes important when booking a non-card currency: The amount is always deducted/converted from the main currency first. If there is not enough credit there, the card jumps to the next higher credit (converted into USD).
This is particularly important if you are travelling in a country with a pegged currency: If the main currency of the card is EUR, but you are in the United Arab Emirates (1 USD = pegged = 3.6725 AED), for example, it may be useful not to leave EUR on the card account so that everything is converted into USD at the peg rate.
If you have enough credit for a transaction, but not enough in one currency, the transaction will be rejected. In this case you have to make an exchange via the app. The app does not denominate. I think that’s good for the sake of clarity.
4. Revolut Disadvantages we know of
Too good to be true – or “how do they make a profit”?
If you use a credit card, the merchant pays a commission. This is usually around 1%. This commission is the only thing Revolut currently earns from.
Revolut currently only earns commission on the merchant’s commissions, is that enough in the future?
Accordingly, the website is teeming with information that although Revolut hopes to be able to maintain the fee model, it reserves the right to increase the fees after 12 months.
Revolut was founded in 2013 and so far there has not been a fee increase, but of course this can change at any time.
The card can only be used via the app. There is no web interface of any kind.
The only “account statement” is the app. Although the display is quite clear, but in the absence of .pdf export (or similar) you can not use the card professionally (no expense report).