They’re the new breed of banks setting the pace in the finance industry. Challenger banks are mostly app-based startups, focussed on lower fees, quicker transactions and less paperwork than the bricks-and-mortar banks of the past.
Also known as Fintech banks, we’re likely to see more and more options appear within the near future, as banking customers get used to carrying out their banking tasks on their mobile or tablet.
Here’s a guide to some of the biggest movers on the scene that are available in most countries across Europe.
The UK-based Revolut has been around since 2014 and in that time has adopted a global outlook. Operating across the European Economic Area (EEA), as well as the US, Canada and Australia, it specialises in peer-to-peer payments, free currency exchange and cryptocurrency options.
The card is eligible for a vast range of online payment services through its relationship with Mastercard and Visa. If you have a Visa Revolut card, for example, you can pay for anything that accepts Visa payments, although UK users may not be able to make a deposit on sports betting sites or Visa-friendly online casinos after the British Government introduced new restrictive legislation recently.
While the service can handle several currencies, it only sets up direct debits in Euros, which can be frustrating for users in some countries. It has also suffered negative press coverage for its customer service in the past, so watch out for that.
That said, the bank was voted as the Best Digital Bank in 2020 by Brokerchooser.com, and it remains a firm favourite with European customers.
If you find yourself in a new country and unable to open a bank account, then you’re not alone. It happened to Estonian entrepreneur Norris Koppel in London only a few years ago. Being a foreigner, he didn’t have a UK credit history, or even a proof of address. Frustrated, he vowed to open a bank that didn’t exclude customers in such a way.
Fast forward to 2020, and his brainchild Monese has over two million customers and operates across Europe. True to Koppel’s word, it’s incredibly easy to set up an account online — in just a few minutes, you can have access to an Apple and Google Pay-affiliated account, with budgeting tools and a savings account included.
The basic account is a pretty good deal, with no fees attached, but you will have to pay a small monthly amount for its Premium features. It’s a little low on extras, too, so if you’re looking for insurance or cryptocurrency, then it’s best to look elsewhere.
Still, as a way to get yourself into the banking game, it’s a great option to have.
A truly international company, Transferwise is famous for its incredible reach across 144 countries.
Its borderless policy shouldn’t be a surprise seeing that its banking model is set up to avoid them. Instead of exchanging money, incurring fees along the way, the company simply has separate pots for each currency, which it dips into for each transaction. So, if you send $100, that’ll go into their US dollar pot and the other person will just get the equivalent amount from their Pound Sterling pot, for example. Users simply pay the company a small commission for each transaction.
Unfortunately, holding a Transferwise account doesn’t give you too much else. Basic accounts pretty much just get a card and that’s it, plus there’s no Premium option available. But if you’re looking to seamlessly switch between currencies on a regular basis, then it’s still the Challenger bank for you.
The great thing about Curve is that you don’t need to mess about with multiple cards. Its mobile app lets you handle all your different card transactions in one place, which makes it super-easy to manage spending.
It spans 26 different currencies and requires no setup or transaction fee, so it’s a cheap, flexible way to set up an account. It’s not affiliated with Google and Apple Pay, and its additional features are basic, to say the least, but its Premium versions do give you insurance options, albeit for a slightly expensive monthly fee.
If you love to keep things in one place, though, then you’ll be a big fan of Curve.
You might have heard of N26’s ‘No Bullshit’ ad campaign that made headlines recently. While it may be controversial, such a tagline is in line with the bank’s direct targeting of the ‘Millennial’ market, in which it competes fiercely with the likes of Revolut.
This approach is certainly backed up by the wide range of youth-friendly options it has available: a Venmo-style bill-splitting system, a free savings account, an overdraft facility, as well as no added maintenance fees.
One possible downside could be the company’s average customer service score on Trustpilot — maybe their employees are as direct as their advertising — but 3.5 million users across Europe suggests they must be doing something right.
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