Here we look at Revolut – a digital challenger bank that offers a range of banking services in a mobile app targeted at young, tech-savvy customers.
The deal
Revolut, a self-styled “financial super app,” is a digital challenger bank that operates entirely through an app on your mobile phone. It offers a range of banking services including:
- A current account that enables recurring payments, ATM withdrawals in 120 countries, and Apple Pay and Google Pay.
- Transferring money abroad in 30+ currencies for free, at the interbank exchange rate (the same rates banks give each other, so the best deal you’ll get)
- A crypto-currency exchange allowing customers to convert currencies into Bitcoin, Litecoin, Ethereum, Bitcoin Cash or XRP
- Vaults for saving money, and spending analytics to help you manage your money better
- Mobile phone and overseas medical insurance, which you can pay for by the day at low rates
- A ‘split bill’ feature to easily settle shared spends such as restaurant and taxi bills
According to the company, its customers have made around 350 million transactions – worth more than £40 billion – since it was founded in 2015. Revolut wasn’t a bank when it started out. It was granted an EU banking licence by the European Central Bank in 2019, and in March 2021 applied for a full UK banking licence.
User-friendliness
Opening a Revolut current account is incredibly easy. So easy, in fact, that you can set one up with no paperwork in just a few minutes. Simply download the app from the Apple Store or Google Play Store and register by entering some personal details.
You will be asked to verify your identity by taking a picture of both yourself and a valid ID document, but won’t need a proof of address and there are no credit checks.
After signing up, you can request a contactless Revolut card, which should arrive in three to five working days. The app itself is streamlined and easy to navigate.
Is it safe?
Revolut is a legitimate company and a secure option to send money abroad. It is is authorised by the Financial Conduct Authority (FCA). However, it is not covered by the Financial Services Compensation Scheme, which safeguards up to £85,000 your money in the event that your bank fails.
Sustainable option
Revolut doesn’t shout sustainability. While it doesn’t have the fossil fuel investment legacy of traditional banks, it also doesn’t make it clear what it IS doing on the sustainability front.
It has been given the worst rating for Climate Change by Ethical Consumer magazine, for failing to publicly provide any information on what it is doing to tackle climate change. It also received the worst rating for Environmental Reporting for failing to provide any environmental policy on its website.
While Revolut doesn’t have publicly available policies on sustainability (we did ask), it isn’t to say that it doesn’t have any. In March, it joined a group of UK fintechs including Starling and Wise to form a new ‘Tech Zero’ taskforce to tackle climate change.
However, the firm has come under fire for the way it treats its staff – in June 2020, several of its employees claimed they were pressured into working extra hours for free, leaving their jobs or taking salary cuts as part of cost-saving measures.
And in March 2019, it was the subject of regulatory probes in the UK and Europe following allegations of negligence regarding money laundering and fraud, which it denied.
Unique selling points
- You can open an account with Revolut in minutes
- It offers accounts that handle both British pounds and Euros
- You can transfer money abroad in 30+ currencies, commission-free, at the cheapest exchange rate you’ll get
- Revolut makes it easy to buy, hold, or exchange cryptocurrencies
The plus points
- Revolut offers a flexibility that you can’t get with traditional banks
- It offers global spending and international money transfers without any hidden fees. It relies on the “real exchange rate”, meaning its customers can save as much as eight percent
- Payment notifications help you track your spending and easy-to-understand analytics mean you can categorise transactions and stick to budgets
Any drawbacks?
- As an app-based bank, Revolut is only available on a phone, tablet or smartwatch so you will need to feel comfortable managing your finances in this way
- It wouldn’t be first choice for a sustainable or ethical bank account (given the reasons above)
Cost of use
With standard accounts, customers get a free UK current account and a free euro IBAN account. There are no fees on exchanging in 24 currencies, up to £5,000 a month, and you can withdraw up to £200 a month from cash machines.
Revolut also offers monthly subscription plans with higher thresholds for no fees, as well as instant access to crypto-currencies, cash back, and a travel concierge service.
Revolut offers free ATM withdrawals of up to £200 per month with a two per cent fee after this. However you can choose to pay a fee each month (£6.99 or £12.99) for additional benefits including unlimited free cash withdrawals. It doesn’t have an overdraft facility so if a purchase exceeds your available funds the transaction will be declined.
How do these costs compare to competitors?
Revolut’s closest competitor Starling Bank offers arranged overdrafts with interest charged at 15 per cent, 25 per cent or 35 per cent EAR (variable) based on the customer’s credit score. Its limit for cash withdrawals outside the EEA is £300. It also offers free cash deposits for personal current account holders at the post office.
Digital bank Monzo is (almost) completely free to use both in the UK and abroad. Card payments are free in the UK and abroad, as are UK cash machine withdrawals up to £400 a day and £5,500 a month. Foreign ATM withdrawals are free up to £200 a month, with a three per cent fee after that. You can put cash into your account at all PayPoints, with a £1 fee per transaction. You can deposit up to £300 a day and up to £1,000 every six months.
Other options
Similar digital banks worth considering are:
Top-rated ethical current account providers
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