A financial app called Revolut wants to replace branch banks and simplify currency trading. TECHBOOK tried them.
The terror of the banking world is as big as a fingernail and fits on any iPhone or Android smartphone. Revolut, a money app for payments, savings and much more. The British fintech company behind it reached a market value of 33 billion dollars in the latest financing round. It is thus valued higher than Deutsche Bank and Commerzbank together. The startup, which was only founded in 2015, seems to be developing into something like the Tesla of the financial industry. Even the hyped neobank N26 from Germany cannot keep up. So far, Revolut has actually been more of a money management app than a real bank. A European banking license from Lithuania allows it to grant loans, but not to trade in securities.
Easy signup to Revolut
It doesn’t matter to the user, at first he gets a new account without any problems. Register, identify yourself with a selfie and scan your ID card, driver’s license or passport, and you’re done. There is no annoying Schufa request, but Revolut would like the tax ID for that. If it falls into the wrong hands, it can be misused a lot. We refuse them and still get the full scope of services. This includes a fully-fledged IBAN from Lithuania, which shouldn’t be a problem, and the ability to invest in any currency at a favorable interbank rate. Including Bitcoin, Ether and Co – for a fair fee of 1.5 percent. So if you deal with blockchain currencies, you save yourself a separate crypto wallet.
Mastercard tide and good user experience
A Mastercard for contactless payment in almost all shops now also flutters immediately onto smartphones and watches. If necessary, for example for cash withdrawals at ATMs, a physical Mastercard or Maestro card (“EC card”) will also be in the mailbox a few days later. Both are debit cards without a credit limit, just as there is no overdraft facility. Every cent that you spend with Revolut must have been paid in beforehand.
This works in seconds from another current account, and depositing via Apple Play is also possible without any problems. Of course, you can also specify Revolut in the classic way for receiving payments – for example as a salary account. The user experience with the app is very good. It doesn’t matter whether it’s contactless payment, transfers, currency exchange or cost allocation, for example for a holiday together. It slips and works and is also nice to look at.
Pros and cons of Revolut disposable credit cards
If you are using Revolut for the first time, you will be surprised how easy it is to register and open an account. There is no correspondence with the bank, it is not necessary to send a bank or debit card plus the respective PIN. The activation of the Mastercard after scanning the proof of identity takes only a few minutes – after that the Mastercard is fully operational.
The app is also unusually transparent about all fees, free quotas and any additional costs. Statistics can be used to track how much cash you can still withdraw free of charge and how much money you can still spend in other currencies without a fee. The app also keeps track of when, where and what money was spent on. It is also accessible, because there is no Schufa test.
Another advantage over many other direct banks and classic banks are the free Mastercards that you get as a Revolut user. In some cases, merchants – both online and offline – only accept Mastercard and not Visa. Even with the free standard account, both a permanent Mastercard and a one-time Mastercard are available. The latter are particularly useful when shopping online. For example, if you order from a shop that you do not know. Because no matter who gets the card details after payment, they cannot use them for purchases. A one-time card also protects against hidden subscriptions or recurring payments, as it can only be used exactly once. Nevertheless, users can receive refunds for purchases already made.
Probably the biggest disadvantage of the Revolut debit cards is that overdrawing the account is simply not possible. Because there is no credit line, credit on the account is required to use it. So if you want to make higher payments with it, you have to pay the corresponding amount into the account in advance.
The “online first” approach also means that cash withdrawals play only a minor role. They are possible, but only free of charge up to an amount of 200 euros per month. Additionally, there is a two percent fee per withdrawal with the Standard and Plus plans – more on that below.
Not a real disadvantage, but it should be noted that with Revolut you not only get a Mastercard, but open a real checking account. There are other banks where this is not necessary. After all, the current account is completely free of charge, but it comes with a British IBAN – since Revolut is based in the UK.
TECHBOOK meint
“I am very surprised at how transparently Revolut deals with fees and functions – I have never known that from any other bank. The app is particularly useful for cashless payments at home and abroad and for online shopping. You have full cost control, you don’t have to worry about phishing attacks and dubious online shops, and you still have advantages such as fee-free transactions in foreign currencies and support for Apple Pay and Google Pay. Only the restriction to 200 euros free withdrawal per month could be a problem in cash-loving Germany. For me, however, that is rather secondary and only an issue for emergencies anyway – if a shop once again does not offer contactless payment. “- Adrian Mühlroth, editor
The app is clear, simple and informative
Every payment transaction is immediately displayed on the Apple Watch and processed in detail on the smartphone. The recipient, such as a supermarket, is identified precisely and with the company logo – right down to the location being displayed on maps. You can enter a monthly limit and track the melting away of your cash reserves using appetizingly prepared statistics. Expenditures, including those from linked accounts at other banks, can be classified by type and alerted when money is running low. Whether that will help you in any way remains to be seen. But if you ever despair of how a classic bank tries to bring its service from the branch to the smartphone, you can’t get the grin off your face at Revolut.
With cash, the app becomes an expensive treat
The downside: The app is consistently designed for contactless payments and money transfers over the air. Cash handling is more of a disruptive exception. Monthly cash withdrawals from ATMs of just EUR 200 are included with free use of the app and the first payment level “Plus” for EUR 2.99 per month. In addition, a two percent fee is due. The more expensive plans also offer higher limits, along with other benefits like faster support. “Premium” for 7.99 euros per month 400 euros and “Metal” for at least 13.99 euros then 800 euros. Revolut’s cash aversion shows that there is still a limit with such a high account management fee.
Travel without money fees
It is practical to be able to withdraw cash from almost any ATM worldwide. Revolut does not charge any foreign fees for this. Even when using the Mastercard outside of the euro area, the 1.5 to 2 percent that is unfortunately now standard for payments does not apply: frequent travelers will probably be the first to be among the convinced users of Revolut.
For payments in foreign currencies there is a free quota of 1000 euros per month. After that, Revolut charges 0.5 percent of the transaction as a fee. Like all other cost factors, the quota can be checked transparently in the app. If you need more than 1000 euros a month and want to avoid the fee, you have to upgrade to the “Metal” tier.
The idea of the junior app, which is linked to a parent’s subscription, sounds really smart – but in its free basic version only for one child. The pocket money can then be shifted to this, for example, and the kids can use it (within the scope of their legal capacity) to pay contactless or online. In everyday life, however, the approach simply fails because children often handle astonishing sums of cash that their aunt or grandpa give them, or that they earn in the neighborhood with services such as dog walking. The parents would then have to deposit the money in the branch of their traditional house bank and transfer it from there to the Junior app.
Also interesting: How secure is online banking?
Conclusion: Perfect for nomads of the digital world
Basically, this also describes the benefits for adults. If you apologize to the cashier in the supermarket if you “have to” pay for a pack of chewing gum with a card because you don’t have enough change, you’re looking for something else. And even if you like to use your bank’s personal contact person, Revolut won’t do you much good. The other extreme is the digital nomad, who travels often and internationally. He has long since replaced the wallet with the Apple Watch. Such people can basically completely replace their old-school checking account with Revolut. All users in between don’t do much wrong with the free basic version as a backup to the main account.