How digital ‘disruptors’ are changing the face of online banking
Digital fintech disruptors let customers tap and go to save time and money
THEY’RE called disrupters – online banks using technology to unseat the traditional players. It’s changing the face of banking as we know it, especially among younger people who want to ‘tap and go’, and are mystified by the thought of actually visiting a bank branch, or waiting for money to leave or arrive in days rather than seconds. They don’t exist in bricks and mortar, but are hoovering up customers and becoming serious players in the money market. Are they worth it? Are they safe?
How do they work?
The two most popular, N26 and Revolut are not based in Ireland, nor do they have any presence, although Revolut is setting up a small operation soon after acquiring 200,000 Irish customers. They offer basic banking services by app. Crucially, they operate in different currencies and don’t charge commission, so are very popular with businesspeople who travel a lot. Their apps are fancy, easy to use and instant - hence the appeal. However online forums also report they are difficult to get in touch with, don’t respond quickly to complaints and that information and transactions can sometimes inexplicably and suddenly ‘disappear’ from the app.
People like the fact that they cheap (although both carry charges), but they must be operated off a mainstream bank account, e.g. AIB or BOI, so are really only good as an add-on ‘Digital Purse’.
Revolut:
What’s Good: Its best feature is that it can store and transfer multiple currencies at the same time.
It has a great app facility called ‘Vaults’ which are basically simple savings accounts you can set up on your phone immediately, lodging either a specific amount each week/ month, or letting it ‘roll up’ your spare change on everyday spending, which you can multiply if you choose (e.g. for an item priced €4.90, it sticks 10c (or a multiple of it) into a vault for you, which can come in handy just before pay day).
It also allows you to send or request money from anybody in your phonebook using the app – great for nights out so you don’t get stuck with the taxi bill. What’s Not: The London-based bank has received an EU banking licence, meaning it can begin rolling out personal loans to customers soon. It claims these will be the cheapest on the market, but suggested interest rates of 8-14pc would still make them higher than the two pillar banks and most credit unions.
It must be serviced from a mainstream bank account, which also carries charges, so there’s no saving.
Although you can withdraw up to €200 a month from ATMs without fees, it’s 2pc per transaction after that. The prepaid debit card costs €6.
Is it Safe? Yes. It has three million customers worldwide. Trustpilot rates it 82pc - ‘great’ or ‘excellent’.
N26:
What’s Good: This German based fintech has a European licence meaning you can run direct debits from the accounts. There has been some pushback from Irish utilities (gas, electricity companies etc), but you get an IBAN code, so stand your ground with them.
You get a Mastercard debit card for free (no credit yet), which is great. It also supports Apple and Google Pay.
What’s Not: Cash/Cheque transactions aren’t permitted; it’s all online. There’s a fee of €2 for the sixth and subsequent ATM withdrawals in any month. Customer service is via Facebook or Twitter, so you need to be on social media to use and upload account-opening information.
Is it safe? Yes. It’s covered by the European Guarantee scheme up to €100,000 per account. Trustpilot rates it 79pc - ‘great’ or ‘excellent’.