Accessing money when travelling - 'Smart Wallets' - Monzo vs Revolut
Money is always a knotty problem when one is travelling and is completely contextual to where you go and for how long. Bryony and I, as you might have gathered, are going for rather a long time and so we needed to figure out some way to access a large amount of money (relatively) without looking like Saudi princes. Partly, this is for practicality but mostly for safety, no further explanation needed.
So we looked around. Most banks will allow international withdrawals, but make sure you tell them first or your account may be blocked! The issue with using ones normal current account is that there are fees associated with foreign atm withdrawals and card use. The fees and exchange rates are dependent on the bank, but generally they are quite steep. Anyone who has used an atm with a £1.99 charge will know, no one wants to pay to access their own money.
For the previous generation the obvious choice has been travelers cheques. These are prepaid fixed amounts of money that will not bounce when attempting withdraw as they have already been paid. In their time they had many advantages. However, since the 90s travelers cheques have been in decline and even less places use them. Similarly, they are a physical piece of paper that can be lost or destroyed pretty easily.
Most travelers now use a prepaid travel card or current account. Both types of card are available from a variety of providers such as the Post Office and Mastercard. The advantages are that set up cost is normally cheap, they can easily be topped up from your debit account and they normally have an app interface.
Bryony and I boiled it down to a choice of two: Revolut or Monzo.
Revolut is a type of prepaid travel card or digital wallet that offers free international atm withdrawals up to £200 a month, free international card use and transactions. Monzo, up until 4th January, has been almost identical. However, Monzo has now become a current account and independent bank. I believe Revolut is now also applying for the same European bank status. As businesses, Monzo and Revolut are expanding their repertoire of offers. Revolut has recently created a cryptocurrency feature. Personally, as a traveler this doesn't sway my decision, I also don't know enough about cryptocurrency. It always seems a little suspicious to me the zealotry that schemes such as Bitcoin create, like a sort of pyramid scheme. What I do know is that there is no such thing as a free cryptolunch, but I digress. Furthermore, Revolut also has credit card type loans and a premium account service which I will explore later. On the flipside, Monzo plans to introduce overdrafts, investment features and savings accounts which will generate an incomer for Monzo as at the moment they are still making a loss of around £50 per customer. I am no expert, but they must seem pretty viable as Monzo managed to get their banking license.
The three big differences I see, that will affect travelers are: The exchange rates, customer service/premium charges and budgeting. Firstly exchange rates, this is a subject I am least comfortable with as I am no economist and have never chased rates when going on holiday. The difference is that Revolut uses the interbank rate and Monzo uses a straight Mastercard exchange rate. The interbank exchange rate is meant to be slightly better, but not necessarily by much. Revolut explains more about their interbank policies here, however I am not sure how much of a difference will be made in the long run.
I think that the ability to budget and control spending is more important for travelers. Both apps give a detailed and accessible breakdown of when and where money was spent. Monzo also has an innovative way to store money away from normal spending which they call pots. Pots are like a digital piggy bank where money can be ring fenced for an activity and then accessed when it is needed. I really like this idea as it protects you from overspending on things like eating out which in extreme cases could cut your trip short.
The last difference between Revolut and Monzo that is important to point out is customer service and premium charges. As of writing this Monzo has no premium charges for any services and has a good customer service record mostly mediated through a messenger app that typically replies within 20min for which I can personally vouch. On the other hand, Revolut has a very bad record for service sending people through to automated AIs and takes a long time to solve problems (mileage may vary). Furthermore, in order to have Revolut's 24/7 customer service you must pay for the premium service at £6.99 per month. In fact almost all extras cost under Revolut. For some these are worth it, such as upping free atm withdrawals to £400 a month and health insurance. Read more about specific premium information here. Personally, customer support when dealing with my finances is paramount. It is stressful enough when things go wrong, but then to have to deal with a robot for hours before talking to someone does not sound fun whilst in another country trying to enjoy myself. As I have said before, most of the products do not interest me, except maybe Monzo's savings account features that may be rolled out this year (2018).
As a warning, this sort of banking is not necessarily foolproof, for instance if you lose both phone and card there is no PC interface to transfer the money or block your card. There is an emergency number on the card. However, this is not much use when you need to access your money. I would advise that a normal current account card (enabled for international use) is also kept with you separately, along with several stores of emergency cash. Common sense stuff.
As may be obvious at this point, Bryony and I decided to go with Monzo mostly because of the customer service which I have now used a few times and got great results.
To conclude, both Monzo and Revolut offer a unique and safe way to access money abroad that will have positives and negatives for different people. I hope that this breakdown will help travelers and maybe others looking into this system. As eluded to above the 'smart' banking app-only systems are all in a state of expansion so I am sure this review will be out of date pretty soon. Therefore, I will hopefully post another blog to expand on how Monzo is working for me and any features that change my and Bryony's experience.
Please comment with your experiences of these or any other 'smart' wallet services,
Bryony and I are now 10 days away from leaving on our big adventure to Central America. Subscribe, follow and share to follow join in with the action.
Greg
@GregWilgar
So we looked around. Most banks will allow international withdrawals, but make sure you tell them first or your account may be blocked! The issue with using ones normal current account is that there are fees associated with foreign atm withdrawals and card use. The fees and exchange rates are dependent on the bank, but generally they are quite steep. Anyone who has used an atm with a £1.99 charge will know, no one wants to pay to access their own money.
For the previous generation the obvious choice has been travelers cheques. These are prepaid fixed amounts of money that will not bounce when attempting withdraw as they have already been paid. In their time they had many advantages. However, since the 90s travelers cheques have been in decline and even less places use them. Similarly, they are a physical piece of paper that can be lost or destroyed pretty easily.
Most travelers now use a prepaid travel card or current account. Both types of card are available from a variety of providers such as the Post Office and Mastercard. The advantages are that set up cost is normally cheap, they can easily be topped up from your debit account and they normally have an app interface.
Bryony and I boiled it down to a choice of two: Revolut or Monzo.
Revolut is a type of prepaid travel card or digital wallet that offers free international atm withdrawals up to £200 a month, free international card use and transactions. Monzo, up until 4th January, has been almost identical. However, Monzo has now become a current account and independent bank. I believe Revolut is now also applying for the same European bank status. As businesses, Monzo and Revolut are expanding their repertoire of offers. Revolut has recently created a cryptocurrency feature. Personally, as a traveler this doesn't sway my decision, I also don't know enough about cryptocurrency. It always seems a little suspicious to me the zealotry that schemes such as Bitcoin create, like a sort of pyramid scheme. What I do know is that there is no such thing as a free cryptolunch, but I digress. Furthermore, Revolut also has credit card type loans and a premium account service which I will explore later. On the flipside, Monzo plans to introduce overdrafts, investment features and savings accounts which will generate an incomer for Monzo as at the moment they are still making a loss of around £50 per customer. I am no expert, but they must seem pretty viable as Monzo managed to get their banking license.
The three big differences I see, that will affect travelers are: The exchange rates, customer service/premium charges and budgeting. Firstly exchange rates, this is a subject I am least comfortable with as I am no economist and have never chased rates when going on holiday. The difference is that Revolut uses the interbank rate and Monzo uses a straight Mastercard exchange rate. The interbank exchange rate is meant to be slightly better, but not necessarily by much. Revolut explains more about their interbank policies here, however I am not sure how much of a difference will be made in the long run.
I think that the ability to budget and control spending is more important for travelers. Both apps give a detailed and accessible breakdown of when and where money was spent. Monzo also has an innovative way to store money away from normal spending which they call pots. Pots are like a digital piggy bank where money can be ring fenced for an activity and then accessed when it is needed. I really like this idea as it protects you from overspending on things like eating out which in extreme cases could cut your trip short.
The last difference between Revolut and Monzo that is important to point out is customer service and premium charges. As of writing this Monzo has no premium charges for any services and has a good customer service record mostly mediated through a messenger app that typically replies within 20min for which I can personally vouch. On the other hand, Revolut has a very bad record for service sending people through to automated AIs and takes a long time to solve problems (mileage may vary). Furthermore, in order to have Revolut's 24/7 customer service you must pay for the premium service at £6.99 per month. In fact almost all extras cost under Revolut. For some these are worth it, such as upping free atm withdrawals to £400 a month and health insurance. Read more about specific premium information here. Personally, customer support when dealing with my finances is paramount. It is stressful enough when things go wrong, but then to have to deal with a robot for hours before talking to someone does not sound fun whilst in another country trying to enjoy myself. As I have said before, most of the products do not interest me, except maybe Monzo's savings account features that may be rolled out this year (2018).
As a warning, this sort of banking is not necessarily foolproof, for instance if you lose both phone and card there is no PC interface to transfer the money or block your card. There is an emergency number on the card. However, this is not much use when you need to access your money. I would advise that a normal current account card (enabled for international use) is also kept with you separately, along with several stores of emergency cash. Common sense stuff.
As may be obvious at this point, Bryony and I decided to go with Monzo mostly because of the customer service which I have now used a few times and got great results.
To conclude, both Monzo and Revolut offer a unique and safe way to access money abroad that will have positives and negatives for different people. I hope that this breakdown will help travelers and maybe others looking into this system. As eluded to above the 'smart' banking app-only systems are all in a state of expansion so I am sure this review will be out of date pretty soon. Therefore, I will hopefully post another blog to expand on how Monzo is working for me and any features that change my and Bryony's experience.
Please comment with your experiences of these or any other 'smart' wallet services,
Bryony and I are now 10 days away from leaving on our big adventure to Central America. Subscribe, follow and share to follow join in with the action.
Greg
@GregWilgar
Hello! I hope all it's going well and I look forward to reading through this blog! How has Monzo been working for you? I, and most British travelers I have met, use Revolut. The only problem I have had is some countries (Nicaragua if I remember correctly) use mainly Visa and so the MasterCard based revolut is often not accepted. I would advice any traveller to hold a back up visa card or vice versa. Specific ATM frees can also be a big annoyance. However, Chile is the only country, out of 12 in Latin America I have been to, that I couldn't find at least one ATM that did not charge (being charge almost $7 every time you take out money really kills your budget!). If you are having problems with this I suggest googling or reading through Monzo / revolut forums. As for customer support I once got charged twice for flights due to the internet cutting out during my payment. Revolut refunded the second payment without me even asking. I also had one ATM not give me any cash but the money looked as if it had been deducted from my revolut account. It was easy enough to get in contact through the support chat on the app and all was quickly sorted. I should note that particular transaction had not actually gone through.
ReplyDeleteAnyhow hope you are having a great adventure! If you need any help/advice with anything give me a shout :)
Molly