Revolut Bank has launched in Ireland. Customers can now ‘upgrade’ to an account free of charge which offers access to deposit guarantee protection, as well as Revolut’s personal loans and future financial products.
Revolut has officially launched as a bank in Ireland offering deposit accounts to customers.
Existing customers who upgrade their account to ‘Revolut Bank’ will have their deposits protected up to a value of €100,000.
Last month the fintech was officially awarded a specialised European banking licence by the European Central Bank and its approval now means customer deposits are protected by the Lithuanian deposit guarantee scheme.
Following the approval of its European licence, customers now officially have access to more financial services, including the ability to take out a personal loan with rates from 5.99% APR. But more on this shortly.
However, customers must first sign up to a bank account with Revolut Bank to be eligible for deposit protection as well as to have access to its new financial services.
Here’s what this means.
How does it work?
At the moment customers who are with Revolut have an e-money account provided by Revolut Payments. Revolut is using an e-money licence that it has passported from Lithuania to operate these accounts. And it still is.
Customer e-money accounts are protected by what’s called ‘safeguarding’. It effectively means that Revolut deposits your money into a client money bank account. The main client money bank account is currently JP Morgan, previously Lloyds in the UK before Brexit.
However, because the fintech was granted a specialised licence by the ECB, it has now opened ‘Revolut Bank’ where customers can create their own deposit account.
This account will integrate seamlessly with your existing e-money account and will be protected by the Lithuanian deposit guarantee scheme.
By ‘upgrading’, customers will effectively be creating two separate but linked accounts.
Do existing customers have to upgrade?
In short, no. If you already have a Revolut account you don’t have to do anything. However, if you want deposit protection and access to personal loans (and more financial services in the future), you will need to open a Revolut Bank account.
If you choose not to upgrade, your standard e-money account will still be provided by Revolut Payments.
However, if you upgrade, both accounts will work side by side. Revolut has said that both accounts integrate seamlessly and you can continue to use both your accounts as you normally do.
In short, if you choose to upgrade, your money will be kept at Revolut Bank and automatically transferred to and from Revolut Payments when you make a payment.
Is there a cost to upgrading?
Upgrading your e-money account by opening a new Revolut Bank account is free and customers will not be charged to do so. And it only takes seconds.
How to sign up to Revolut Bank
Customers can upgrade to a bank account for free from within the Revolut app.
You can do so by clicking ‘join Revolut Bank’ and confirming a number of details including your email address, for one.
Customers will also be required to agree to the new terms and conditions.
Are plans changing in price?
No, there will be no change to the price of Revolut’s accounts.
Speaking about the launch of Revolut Bank, Chief Executive Officer of Revolut Bank, Joe Heneghan, said:
Revolut is one of the fastest-growing fintech companies in Europe because we put the customer at the heart of everything that we do. Our customer experience is second to none, we have no hidden fees, and we are constantly building new and innovative financial products.
Launching the bank in Ireland will provide a greater level of security and confidence for our customers, and will enable us to launch a host of new products and services in the future.
Revolut Bank customers can now also apply for a personal loan through the app - another step in the right direction for Revolut being recognised as a fully-fledged bank and current account provider.
What’s more, the fintech is offering some enticing personal loan rates too which will doubtless stir up some much needed competition in the market.
Revolut is offering competitive rates starting at 5.99% APR.
Take for example a car loan for €3,000 over 12 months. At the time of writing, Revolut is offering a monthly repayment of €257.95, or a total cost of credit of €95.40.
If you look at the most competitive rate in the market from existing lenders for the same loan however, AIB is offering a monthly repayment of €258.54, or a total cost of credit of €102.53
Appetite for online banking
Online banking in Ireland has well and truly taken off. Since the onset of the pandemic, and even before, banking customers here have quickly adopted means of online banking. From contactless payments to opening a current account online, many prefer it for its ease, especially for more menial tasks and transactions.
So, it’s no surprise then that Revolut is so popular in Ireland, steadily growing its customer base since it launched. For context, it now has more than 1.7 million customers here.
The move to launch Revolut Bank in Ireland is aptly timed too, with both Ulster Bank and KBC set to leave the Irish market before the end of the year. So Revolut is firmly positioning itself as the go-to online-ready bank for all those who no longer need or want a brick and mortar branch.
What’s more, Revolut is making no bones about vying for this business, saying it is “confident that deposit accounts, alongside Revolut’s wide range of other products and services, will provide customers in Ireland with more control, value and security than traditional banks.”
Potential IBAN trouble
The launch of Revolut Bank and its increased protections for consumers is obviously great news, and alongside its personal loans, Revolut is well on the way to convincing the most sceptical of consumers that it is a stand-up alternative to the likes of Ulster Bank, KBC, or even AIB or Permanent TSB.
However, Revolut Bank accounts will still have a Lithuanian IBAN for the near future. And while under SEPA, everyone should accept this, IBAN discrimination can still occur. This can be especially true for certain outdated payroll systems. So, if you are considering making Revolut your main current account, it's best to double check with your employer first to make sure no issues might arise.
Revolut has intimated that it will make Irish IBANs available to customers here sometime in 2022, however no specific timeframe has yet been announced.
According to a survey carried out recently by Revolut, 41% of Irish customers said they would deposit their salary into their Revolut account. But what's holding them back?
On the other hand, 70% of customers said they would spend more via the app if they had their deposits insured, which is now the case.
It will certainly be interesting to see whether more and more begin using Revolut as their main current account in the future.
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Let us know what you think
What do you think of this news? Are you considering making Revolut your main current account provider? Do you still have any reservations?