Revolut: Currency App Reviewed 2017-03-13 17:15:00 2018-06-17 15:49:48
Pilot George
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https://www.pilotgeorge.co.uk/blog/post/revolut-usd-and-nzd-currency-exchange-app-review/

Revolut: Currency App Reviewed

13 March 2017

Perhaps the best exchange rate out there...

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When it comes to travelling outside of your own nation, there's always one question which will either make or break your day.

How much money will I get for my pound? 

Now, I don't know about anyone else but I often find I fall in to the latter category, as let's be honest the high street rates come in WAY less than those Google tells us about!


High Street Example...

Let's use the time of writing as our example and compare an exchange of one thousand 'Great British Pounds' in to 'United States Dollars' or 'New Zealand Dollars' respectively. Google's rate is included for comparison purposes only as they do not offer currency services directly and simply look up the 'live' interbank rate.

  USD NZD
Google $1.22 $1.765
M&S Money $1.198 (best) $1.669
TESCO $1.196 $1.694
Lloyds Bank $1.155 $1.604
ASDA $1.196 $1.694
Thomas Cook Store $1.196 $1.660
Post Office $1.193 $1.694
TravelEx $1.192 $1.698 (best)
Thomson Store $1.174 $1.644
MoneyCorp $1.160 $1.667

When comparing these rates it's clear to see there's quite a difference between the best and worst and whilst we're only talking in the decimal places, that soon adds up over a £1000 transaction. For example, opting to exchange USD at Lloyds Bank compared with M&S Money would see you $43 worse off. The same can be said for New Zealand where you'd lose out on $94 between the best and worst bureau. All in all, what seems like a small difference will eventually add up.


Revolut Example...

Launched in 2015, Revolut's mission is to eliminate fees for using money abroad. Revolut provides its end customer (that's you and me) with the exchange rate given to them by their own wholesaler, which happens to be the same rate employed by the big banks themselves - which they seldom pass on to us (how rude!). So let's take a look:

  USD NZD
Google $1.22 $1.765
Revolut $1.22 $1.770

What's perhaps immediately evident is that Revolut's rate is identical to that given by Google. This means that there are absolutely zero 'hidden' commission charges - as let's be honest, despite every bureaus' claim they still manage to sneak them inside the rate they provide us at the counter. With this in mind, if I want £1000 worth of USD or NZD, I will be pretty much guaranteed to get the interbank rate in my own exchange and receive $1222 or $1770 respectively. Win Win!


How does Revolut work?

Getting Started..

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On the face of it Revolut is no different to your typical currency provider in that they can offer you a currency to spend abroad, however, when you explore their service in more depth you soon learn it's much more than. In fact, I would say that Revolut is more of a bank without branches, managed from your phone. Offering an incredibly friendly user interface on both their Apple and Android smartphone applications, I was impressed with how straight forward it was to setup and get going. 

Revolut Touch ID

When you open the app for the first time you're prompted to provide a few basic details required by any service, such as as your name, date of birth etc and at first I thought the details required were quite lacking, but later discovered that Revolut ask for photo ID and account verification later down the line should you wish to use the app's full potential. Common with most banking applications these days you're also asked to set-up Touch ID, or Android equivalent and a four digit pin to gain access to your account. Once all of that's out of the way you're presented with your account page and can get going!

IMG 4735

Topping Up

The account page displays three separate balances in GBP, EUR and USD and it is from these 'base currencies' that Revolut carry out payment instructions, be those in-app or via a prepaid Mastercard (more on that in a bit). The benefit to this is Revolut is allowing people from France, Spain, USA etc whom hold both a GBP and EUR/US bank account to top up their accounts from both sources and not suffer any exchange rate fees by your bank first converting to GBP. 

I was quite skeptical of parting with my money at first, so read some more in to Revolut as a company. I learnt that any balance deposited is ring-fenced by Barclays and safe guarded by Mastercard, so your money will always be your money in the event of something happening to Revolut as a company. 

Topping up my account was as simple as it was to set up in the first place. I simply selected the base currency of my bank account (GBP) and then tapped 'Top Up' from my account screen. I was then offered Card, Bank Transfer or Apple Pay. At first I only topped up a small amount so used Apple Pay which was as straight-forward as any typical Apple Pay transaction. Interestingly, you were able to top-up with Credit Card via Apple Pay although a £1 surcharge was added so you could earn some nice Avios points there if you have such a card!

The Card option limited your initial top up and thus I loaded £200. In order to lift this limit I had to find the four digit reference entered on to my statement by Revolut and enter this into the app to confirm I owned the card thereby lifting the restriction. I made a second £800 deposit and you'll be pleased to hear both went through smoothly.

The Bank Transfer option was quite interesting. As mentioned above, Revolut is ring-fenced by Barclays and as such each member gets their own Barclays UK account number and sort-code making topping up as simple as any other UK inter-bank transfer. The balance cleared within 2 hours. EUR and USD transfers are also possible and bank details are also given, however, it's not a dedicated account so you have to be very careful to match the payment reference with what Revolut give you in order they can match the payment to you!

Spending / Accessing Money
IMG 4736When it comes to spending Revolut funds there are many ways you can do this and I mentioned earlier that Revolut could be considered a branchless bank. They're not a real bank i'll stress, but consider themselves an alternative. As such, you can transfer Revolut funds out to 'real' bank accounts, transfer funds to a Revolut friend using their mobile number or the most useful of the lot: a debit card. The beauty to all of the aforementioned options is that all currency exchange is carried out by Revolut before anything happens and I'll come to that in a bit. 

Where cards are concerned though, you're provided with two options as below:

  1. Physical Card
    Costing £5 and a further £5 for standard or £12 for express shipping, all of which is deducted from your balance, Revolut will produce a physical prepaid Mastercard and deliver it to the address on file. The card looks a bit similar to that in the above screenshot and can be used anywhere Mastercard is accepted. This includes online, in-store and at ATMs for cash withdrawals. Mastercard is also accepted globally. While you wait for the postman to deliver the card, it's digits are available in the app immediately after ordering which means you can still spend online should you wish. The setting of the cards pin number is just as straight-forward and completed with a few taps.

  2. Virtual Card
    Costing the same as a physical card, you are still offered the same Revolut card services just without the physical card. This is ideal if you plan to spend something online whilst abroad or need to provide card details to an international vendor for day-trips etc.

I ordered two cards to retain access to my funds should I lose the first one.

Currency Exchange (Where Revolut Wins)

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Earlier in this post I discussed how Revolut beat pretty much every high street exchange outlet and they do this by passing the wholesale currency rate on to their members. Yet, unlike a traditional travel card you get in the Post Office or Thomas Cook the currency is not converted to that of your destination before you travel. Instead, it occurs at the point of the transaction (unless of course you are to require EUR or USD in which case you can simply do a simple one off exchange from one base currency in to another). For example, if I use my Revolut card in the UK then no conversion occurs should i hold a GBP base currency balance. However, should I spend $50 NZD on a food shop, Revolut will convert the appropriate amount of currency at that time using the live rate.

I suppose you could say this has it's negatives, especially at a time when the GBP is quite volatile due to Brexit, although you can also spin this around to use Revolut's rates in a one-time transaction too. For example, many cadets training in the US or NZ open local bank accounts and then make an international bank transfer in to it. If you were to use Revolut as the middleman to make this exchange for you then you would save the following charges from your home bank account and newly opened international bank account:

  • International Bank Transfer Fee
  • Lost Currency from 'hidden' commission within the banks exchange rate
  • Potential incoming charges if your home bank account hasn't converted the currency first

IMG 4737

Using the fees from the screenshot above, depositing £1000 to Revolut and then transferring it out to my newly opened New Zealand bank account would see me receive $1764 NZD compared to $1604 NZD using my banks rate from the same day - before any fees are even considered! That's quite a considerable difference and sees you gain at least $160 NZD. So whether you're using the Revolut app day to day, or using it for a one-off transfer it is quite clearly a leader in currency exchange and has even been voted so by Money Saving Expert


But wait, there's always a catch or two. So what are they?

Ah, you got me! Sadly, there are a couple of tiny catches which are a little bit frustrating really but then again, isn't the whole of the foreign exchange industry?

Prisoner to the Economy

Whilst an annoyance I wouldn't exactly pin this negative on Revolut themselves, as it's more down to the ever-changing financial markets. As Revolut always uses the most up-to-date exchange rate you are somewhat prisoner to the economies of your local base currency. This is especially concerning at a time when the GBP is rather volatile during the U.K's Brexit negotiations, so to get around it I have transferred half of my currency to a New Zealand bank account at a frozen rate and left the rest in my Revolut account. Fingers crossed the GBP doesn't get any worse than it already has because it's already at an all time low. 

Revolut's Sneaky Weekend Commission

The organisation Revolut sources its' currency rates from doesn't provide 'live' services over the weekend due to market closure. So, Between 23:59 on Fridays and 23:59 on Sundays Revolut adds between 0.5% and 1.5% markup on Friday nights rate dependant on the currency used. It would appear that whilst we spend the currency on a Saturday or Sunday, Revolut themselves are not charged the conversion until the Monday and this little fee somewhat safeguards themselves from any significant losses when the market re-opens.

An annoyance with pre-paid debit cards

Again, this one isn't really Revoluts fault as it's more the way the industry carries out transactions. Nevertheless, if you use a Revolut card at pay-at-pump petrol station, toll-booth or anything which 'authorises' a card for a set amount of spend first, $99 in the case of the petrol pump, your balance may well be deducted by the 'authorisation' amount at the point of sale. Even if you only fill up by $20 it can take up to 10 days for the difference to be refunded back in to your account. What's more, the initial deduction and eventual reimbursement may well occur at different exchange rates too so you could lose the odd cent or two. Therefore, in situations like this it's always best to go in and pay via the standard card machine at the till point so you're only ever charged the correct amount!

Other charges, somewhat avoidable with common sense...

  • Local ATMs
    Watch out for ATM charges imposed by the ATMs themselves! You know, like those in service stations? grr... If prompted, like in the USA, always tell the ATM that the account you are using is a 'savings' or 'checking' or 'current' account. Also, never use an ATM which advertises the ability to withdraw foreign currency as it will use its own rates so, if prompted, select 'without conversion' and Revolut will do the rest at the interbank rate.

  • Revolut ATM fee
    The first £200 of ATM withdrawals each month or equivalent in local currency is fee free, thereafter a fee of 2% is applied. You can avoid this fee by avoiding cash altogether and paying by card instead. Only withdraw cash if it is absolutely essential. Remember, your Revolut card works wherever Mastercard is accepted and that's quite a lot of places!

  • Monthly Exchange Limit
    The first £5000 of exchange per month is free, thereafter 0.5% is charged.

Conclusion...

Make of this little review what you will, however having travelled abroad before using similar travel cards the Revolut offering beats the likes of CaxtonFX and the Post Office hands down. What's more, it's ability to split bills between fellow Revolut members and the particularly useful addition of a UK bank account quickly contributes towards Revolut being a strong player. I think it's certainly something to consider if you're wanting to exchange money for a long trip such as mine, or even a holiday to the USA or Europe. In the case of the latter, you can actually benefit from a one-time conversion as Euros and USD are actually Revolut base currencies so you wouldn't suffer the issues listed above with regards to exchange occurring at the point of sale.

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