Tag: Banks

Country You Go, Banking You Find

If you have been following this blog for a long enough time, you probably know I “enjoy” writing about banks, or at least I end up doing that quite a lot, whether I enjoy it or not. Part of that it’s because I still find myself reason about money the way I did when I had my own company, and part of that because, well, I have opinions of what good banking looks like to me. Part of the reason why I have that opinion, is that I have seen a lot of what good banking is not, and it gives me material to keep writing.

Of course, I’m also lucky because I have at this point seen how banking works (or fails to) in multiple countries, and I can at least compare the point of view of an user in those contexts. I don’t have any idea how this works from the other side of the fence of course, as I have (thankfully) never worked for a financial institution. Not that I haven’t considered that (hey, I live in London after all), but then I remember that I would probably be finding that things are even more screwed up than I can see from the outside, and decide to put my savings into gold bullions — as it stands, I just keep getting depressed by everything tech, and been considering turning to opening a coffee store and bakery.

And I do mean it, when I say that different countries have… pretty much nothing in common when it comes to banks and banking — costs, services, expected behaviour and contacts. Some of it appears to be so entrenched culturally, that suggesting changing something would be probably considered heresy.

Italy

In Italy it is (or at least was) common for current accounts to have a monthly fee, although somewhat nominal, and this usually doesn’t include much more than a bank card. I used to have a cheques book — but only because at the time, my family used to use those for a lot of things. I think I only ever used once, and I’m not remembering what for.

Outbound wires were expensive back when I was using them, raising in price over time, and differed whether I would be wiring to the same bank or to a different one. Cashing in cheques was free, as long as they were in the same currency, while receiving inbound wires depended on both currency and source of the wire — when I was a contractor working for Google on ChromeOS, the invoice payments arrived in dollars, but from within Europe, and they didn’t cost me enough “to notice”; when I received the payments from another customer, they dropped hundreds of euro on the bank’s coffers — which is why I am happy that TransferWise exists now.

While Italy had early federated ATMs that allows you to access your money at any time, there is one thing that I have noticed is not common elsewhere: accessing ATMs outside of your bank’s own is generally a paid option. And I don’t mean that in the USA sense (that I’ll get to later) of ATMs that charge you a fee to use them — I mean that the bank will charge you a fee to use an ATM of a competitor. This got to the ironic part where, when visiting Italy after moving to Dublin, it was cheaper for me to use an Irish debit card to get some cash out of a machine, because my Italian bank didn’t have any ATM in an easily-reachable place for me to use. This might be annoying to me, but it’s a significant pain for people like my mother who don’t drive, and that need to be driven to another town to find a free machine.

Another interesting note about Italian bank cards is that, up until very recently, were not usable online. I think nowadays most banks have at least a paid option to give you a normal Visa or MasterCard debit card, but for a long time you ended up with cards that couldn’t be used online at all — even when they had 19 digits on them for the Maestro circuit. Indeed, back when I hit these issues I did ask whether I should have gotten a VPay (Visa’s answer to Maestro, before Visa Debit), but I was told that that would have been less accepted in Italy itself.

Credit cards are still uncommon — before bank cards could be used online, the vast majority of people I knew who made purchases on eBay would be using pre-paid cards (Visa Electron or MasterCard Debit), that you topped up for a fee. The most common one at least back then was issued by the Italian post (Poste Italiane), under the name PostePay — it was also one of the biggest scam targets for many, as many eBay sellers would pretend that the PostePay logo appearing on the announcements meant that they would pay directly to a pre-paid card, rather than through PayPal – a great scam, since eBay can’t see the money changing hands, and won’t protect you from fraudsters. At least they seem to have abandoned chip’n’sign.

On the other hand, direct debits have been a thing for a long while… although that became an issue when SEPA Direct Debit became a thing. Indeed, the old Italian direct debit system was advanced enough (and similar enough to the SEPA DD Core specifications) that it appears most banks and operators just re-used the same infrastructure, just changing the size of the fields used as parameters. This worked well as long as you were not trying something as silly as direct-debiting an Italian utility to an Irish bank account or vice-versa. And I know that because I tried.

To be honest, though, not everyone is using direct debits still. Before my parents split up and I started being the one paying for the bills, my father insisted on not using direct debits at all, and instead paid the bills at the post office — and since a number of times the bills arrived past due, we ended up paying quite a lot of money in interests. The pay-to-the-post-office thing is also a fairly standard concept of Italian culture, at least up to the ’90s. I don’t think any of my age-peers are doing that anymore, particularly because post offices are pain to get to: in many town you can only get to them in the morning, and not over the weekend.

Indeed we got to the point that a lot of banks offer (or at least used to offer) a postal payment service so you could put in your request for a postal payment online… and then receive the paper receipt by snail mail, because what they pretty much did was forwarding the request to a local post office, with batch-printed money order forms!

Ireland

Given the fact that Ireland is part of the EU, and thus SEPA, you may think that things are mostly the same between Ireland and Italy. You would be wrong.

First of all, bank accounts in Ireland are a mess to choose from, because none provides any decent service. The one account I was given when I landed, through Google on AIB, was one of the most commonly used one, and required €2500 in the account at every single day of the quarter, or otherwise it would charge you for each operation you took… including received wires. Note that this is a daily minimum and not an average-over-the-quarter, like the equivalent would be in Italy. And goes without saying that it’s a no-interests account, so you need to put some money “to sleep” to avoid being charged through the nose.

The last account I settled on was an Ulster Bank premium service account at €36/month. It actually paid for itself in terms of a lot less time spent dealing with straightening things out (after a horrible situation with KBC, I really wanted someone that could do that stuff for me). And it came with a secondary Sterling account (via Ulster Bank Northern Ireland — I still have that account!), as well as a savings account and credit card.

Thankfully, Ireland abandoned the country-limited bank card system called Laser before I immigrated, in favour of using more standard Visa Debit cards. With the exception of KBC that, as far as I know, was the only issuer of MasterCard Debit bank cards. A number of other non-bank services issued MasterCard Debit cards: Revolut, Curve, and An Post’s money exchange services — the latter being ironic given that An Post was the only place I knew of that did not accept MasterCard Debit cards, only Visa Debit.

As far as I know, none of the big banks issue bank cards that have fees to take money out of a non-bank-owned ATM, to the point that I never bothered to go anywhere else but the two Spar supermarkets around my place, when I needed cash.

Direct debit is the norm, although some system of postal payment is still present, and a number of bills would have the details printed on the bottom. Ironically, it’s because of that, that once I leaked my own credit card number. Overall, the Irish banking system appears to me fairly straightforward, with most payment being executed electronically, and widespread card acceptance.

An interesting note about direct debits is that, despite nominally being part of the SEPA Direct Debit Core system, they appear to be vastly region-locked. I had to threaten Tesco Bank (before they sold their business to AvantCard) to bring it up with the regulator when they refused to let me direct debit an account with a non-Irish IBAN, and Ulster Bank (Ireland) didn’t budge even then. A few of the utilities, also, appear to still be unable to change the direct debit dynamicall: you instead choose how much you want to pay, and then they will issue you a statement to show how much in credit/debit you are.

What I would say is still Ireland’s biggest problem when it comes to banking is the lack of competition. It’s the reason why Revolut actually works well there: there is no high-street competition and those who are used to different level of service will go straight to FinTech offers. My impression is that the reason for the lack of competition is that it relates to the way folks stick to the bank their parents used, something that I have encountered in Italy a lot as well.

England

I nearly titled this section United Kingdom, but then I realized that there are a few things that don’t quite work the same way throughout the country. Which is something that became very apparent when I transfered from Dublin to London: in the Workday interface, when it asked me for a “UK bank account”, I provided an Ulster Bank (NI) account number, and that had me wait for another two weeks (with a roundtrip to payroll to change my account on file), because Northern Irish bank accounts are not compatible with most English payment systems, it appears.

On the bright side, the competition between banks is fierce, although there are a number of “branded” accounts that consumers don’t always notice are operated by the same institution. There are also free-by-mandate bank accounts made available by a number of well-known banks, although that is becoming an increasingly limited space.

In my experience, this is one of the most consumer-friendly banking system, with payments between accounts, whether private or business, being free or nearly free, and direct debits being ubiquitous. The best of all is that so-called “Faster Payments” transfers appear on the credited accounts nearly instantaneously, in a matter of minutes if not seconds, without any surcharge. Italy does have similar fast payments, but in their case, it usually comes at an additional cost.

Otherwise, the English system looks a lot like the Irish one, at least for now. Bank cards are issued usually on the VISA network, although I know of at least one bank issuing Mastercard debit cards. More recent ones stopped providing the embossed digits for the fully-offline usage, which is fair as the only place that I saw using those in the past few years has been a hotel in Tokyo.

Credit cards are an intersting story here. They are not expensive, honestly, but they are very, shall we say, selective. If you just moved into the country, you’re not going to get a credit card for a number of months, which is again similar to Ireland, although I did manage to get one relatively fast with American Express (which, of course, is not cheap by itself). Once you’re allowed to get a card, the price of it is usually recovered by cashback. Or you may choose to get one of the cards that cost nothing but don’t get a cashback at all. Personally, I decided to get two cards: Santander’s with generic cashback, and Amazon’s (by NewDay) with Amazon-only, points-based cashback; the former is paid back by the regular payments we have on it, and the latter was free, and adds up a few scores of pounds a year.

Compared to the time I spent there, the one thing that England appears to have that Ireland missed (and, as far as I know, so does Northern Ireland), is the concept of “retailer offers”. For those unaware of these, many banks include “selected offers” with their bank accounts or credit cards, which you usually need to explicitly opt into. The way you do that, is usually through their normal mobile banking app (or website), although I think a couple of banks have separate apps for those.

These offers are usually in the form of anything between 2% and 10% cashback for purchases over a certain amount up to a maximum. Depending on the bank, these are offered either in actual cash, additional “points”, or separate “rewards balance”. This is where things get interesting and complicated, because you end up having to keep in mind which card/account has a certain offer, and you end up then deciding which one to use to pay at a certain place depending on that.

To make the calculation more complicated, the rules are also different between these. My bank (Santander) has a single set of offers on the account, which applies to debit and credit cards alike. And if the offer is for “one-time”, it is consumed as soon as either me or my wife use the card for an eligible transaction. On the other hand, American Express applies the offers on the card, so both of us need to check our app for valid offers, and one-time offers can be used once per card (very useful for offers that instead of a percentage, give you back a fixed amount, like the yearly “Shop Small” week — fun fact: in the beforetimes, it confused a lot of waiters when we would decide to split the bill, particularly when our wedding rings are clearly visible). But at the same time, the banks’ offers can be combined with Airtime Rewards, so you win some, lose some.

Direct debits are another area that includes some calculation space, and some similarities with Ireland. The number of utilities using fixed direct debits is significantly lower, but it’s not entirely uncommon either. On the other hand, a few banks (including Santander) do apply cashback to (certain) direct debits. Or they may decide to give you perks as long as you have direct debits set up. This provides a gameable system: particularly when accounts suggest you can get perks as long as you have two direct debits, you can take a look at your periodic payments and, if they do allow PayPal, you can use then turn a periodic payment into a direct debit. For instance, you may have Spotify and Netflix as those direct debits.

My short version of an impression of the English banking system is of one that is perfect if you are a fan of strategy games or RPGs where you can spend a day just calculating the possible weapon/armor/enhancement combos. You can then decide to squeeze all possible combining offers, get the best exchange rate for each purchase, and so on. If you are not into these trickeries and calculations, well, you can still get a pretty much no frills account and be happy knowing that they are not really mugging you of a lot of money.

What is possibly the most annoying thing, is that the security of logging into the online banking options is fairly horrible. England (and Ireland too) is the home of “Please give us your 3rd, 7th, 38th character of your password” requests, which are horrible security theatre, and add nothing in terms of security, since transparent phishing proxies are not uncommon at all.

United States

For this country, I only have a passing knowledge of the banking system, since I have never lived there proper, but I do have a bank account, so I have experienced some of the workflows, and I can compare notes with a few people I know that have lived there.

The first thing everybody will tell you about US banking system, is that it still heavily relies on paper cheques. Yes, the same cheques that had the main spotlight in movies such as Catch Me If You Can (which in my opinion is a great movie, by the way). What has changed since the time of that movie is that there’s a lot of “virtual process” around cheques in the USA, something that I don’t think other countries have done, for good or bad.

So for instance, I have received myself a few US cheques (mostly as rebates for goods I bought in the USA); to cash them I didn’t have to wait for my next trip to the country: my bank (Chase) allows me to scan the cheques front and back with their mobile phone app and they consider that good enough that I don’t have to present the original to any one at all. I could literally take the cheques and frame them, if they had an emotional meaning for me (they don’t, and I didn’t). And I’m told that on the other hand, you can ask your bank to print out a cheque for you via their online banking, and they will post it out for you just fine. I’m sometimes scared by this strange paradox of still using cheques, but beside being reminded of the William Gibson quote («The future is already here, it’s just not very evenly distributed»), I can only shake my head and thank the luck that “my” banking system doesn’t require me to deal with this.

Electronic payment in stores appear to be also unevenly distributed. While I had no issue with paying by card in most places I’ve been to, in either California, Pittsburgh, or New York, there appears to be still a lot of services that are cash only. One of them, ironically, in Mountain View: Dana Street Coffee Roaster serves really good coffee, but I don’t usually keep cash at hand (except if I’m going to The New Mongolian Barbeque), which is why I usually just hang out at Red Rock unless I’m with a local.

There is also the elephant in the room, that only recently the United States have introduced chip-and-pin for points of sale around the country, and the last time I was there, a lot of them still didn’t support it. The reason for that appears to be related to the way point of sale devices are handled in the USA, where a lot of vendors actually bought the terminals, rather than renting them from a bank or payment processor. This is unlike Europe, where as far as I know, most banks will sign you up as a customers and provide you a leased terminal, which they take responsibility for updating and replacing as needed, which allowed the deployment of new technologies such as chip cards (with either PIN or signature) and NFC payments in a much shorter order than across the pond.

Payments, particularly consumer to consumer, are a mess. The whole concept of direct bank transfers is not something you can consider in the USA, with wire transfers costing $25 at both ends of the transaction (depending on banks and other rules). This may give a bit of context on why Silicon Valley appears to want to reinvent payments every year, with new methods to “attach money” through all kind of messaging platforms, and why people still attach themselves at the idea of bitcoin solving problems related to instantaneous transfers among peers.

On the other hand, online banking systems appear to be a lot more sensible when it comes to login security than European banks. Chase even supports proper password managers in their login both on the website and on the mobile app, which is unheard of in the countries I lived in here in Europe. And they even will use email for OTP rather than the silly SMS. It also appears that retailer offers exist in the USA as well. Chase is always trying to sell me a Dropbox subscription, with a 15% off (and TurboTax, although I don’t actually owe taxes in the US so that would not be particularly useful).

Conclusions

This is by no means a complete and detailed comparisons of all these banking systems. It is most definitely biased and partial, particularly given, as I said, I have not lived in the United States, but only experience it as a passerby.

I have not covered the different credit score systems of these countries (among other things because I do not have a credit score in the USA at all), nor I have talked about how to get loan or mortgages (the latter of which, I never tried getting anyway). All of these are extremely important components of a banking system and they, more than the services to consumers, should be considered when debating its health.

I just find this particular field interesting, and I think that reading more about other countries banking systems might get people to pay more attention to the horrible technological solutions they come up with. Nobody cares about cryptocurrencies for money transmission in Europe because SEPA means you can transfer money for fees that are pretty much nothing by comparison with your average crypto transaction. Noone had more than a passing interest in “attaching money to Gmail” outside of the USA.

I honestly open that in the future I’ll get to know more banking systems. It would mean indeed moving again, but I think it would be interesting to see different parts of the world, too.

Moving Notes #3: Paperwork, Service Providers, Xenophobia

This is part 3 of a series of posts talking about moving apartments, after me and my wife moved, the past October.

So, in spite of most agents we worked with, and in spite of Rightmove letting them lie out of their teeth on their pages, we eventually found a place we liked, and that we could actually rent. To be honest, we were a bit scared because we ended up renting on the higher end of our budget despite finding only a two bedroom flat, but it gave us a good impression, and in particular it didn’t involve dealing with a property management agency.

Unfortunately, it still required dealing with the real estate agency to make sure the paperwork was taken care of: referencing, credit check, and finally rental agreement. Even more so because our actual landlord is once again overseas, and they instead rely on a family member to look after the apartment.

Tenancy Agreements

As I already noted previously, this agency required us to pay a deposit when making an offer — the only one that we have found doing that. This deposit would have been refundable if our offer was not accepted, or if they proven to be “unreasonable” in their demands during the rental negotiations. If we decided to withdraw the offer, then we would have lost the deposit. But if the offer was accepted, and we completed the paperwork, that deposit would add up to the normal rental hold.

As we completed the offer, and the landlord had been reasonable throughout, we had no problem with this particular hold. It also seemed to give the whole process a bit more “propriety”, although obviously it’s also a privilege to be able to just provide the hold deposit on the spot without knowing that beforehand.

But of course, it wouldn’t just go completely smooth. After the offer was accepted we had two main objectives: completing the referencing process, and signing the contract. Neither was successful on the first try.

The Referencing Process

The referencing process was something that we partially feared, due both to our previous experience with Dexters, and because of at least one of the previous agents saying that me being on probation at work would be an issue. Unsurprising, given the current situation between lockdowns and Brexit, my wife had been left without a job at the time, and we were wondering how that would fly through — as it turns out, that was not an issue, possibly because we have been married for nearly a year already when we started the process.

What turned out to be a problem there was our “old friend” institutional xenophobia. The referencing process needs to be started directly by the agency, who types in your name, and the system does not let you amend it, but rather just note additional names you may be known by. Turns out that English agents are not very good at either typing, or splitting in different components, foreign names. Not that it it is a surprise, and that’s not something I would call xenophobia in and by itself, but you can see how it becomes an extra burden, after receiving a half filled-in form, having to go back and say “Yeah, no, that’s not my name, please write such-and-such into it.”

Where I do apply the label of xenophobia is the service provider not even considering this option, and not allowing for the referenced person to correct the spelling of their name, despite requesting them to swear they are providing truthful information. And just like I said previously about the three years of addresses in the energy supply switch group, that’s not to say that it would have been a problem for me to fill it in as “Diego Pettenò” instead of “Diego Elio Pettenò” – half of everything appears to know me as the former, and that sweet tech bubble job insulates me from most of those problems – but there will be people who get in trouble for silly stuff like that.

Thankfully, of the two sets of referencing issues, only mine had further problems, and for once they had nothing to do with my nationality — just my place of work. When they asked me to provide the address of my employer, it was through a postcode lookup…

Let me explain postcode lookup for those who are not aware of this works in the UK, as it’s not common in many other countries. Postcodes in the UK designate a very limited space — a handful of buildings in most cases. In other cases, they may designate a single building, or – like is the case for my employer’s London HQ – a single address. Which means it’s not uncommon for services to ask you for your postcode first, then show you the list of addresses that correspond to that postcode. In our flat’s case, this means around eighty different addresses for the 80 flats in the building.

… and, since the postcode in my contract only has one valid address, that should have been easy. Except, when I tried submitting that, the second postcode field – not the one for the search, but the one in the actual address – complained that it was not valid. Well, turns out that the reason is that the postcode was a non-geographical postcode, because the office used to be the Royal Mail’s headquarters, and so it was issued a custom postcode to replace their original W1A 1HQ special one.

Quite a few back-and-forth with the agency later we managed to get all of the paperwork through and we got our references, so it was time to look into signing the tenancy agreements.

Tenancy Agreement Templates

So it turns out most tenancy agreements are based on some kind of standard template, which is not surprising. Even in Ireland, the Private Rental Tenancy Board (PRTB) provides a base template for the landlords to use. But here, it looks like different agencies use significantly different templates with similar, but not identical terms.

Most of these templates have a specified section for an “additional schedule”, which include additional requests from the offer – e.g. we wanted a couple of rooms emptied out, a new mattress, and authorization for a few changes – but what is not obvious to many is that additional clauses can also be waived if you agree to it. And indeed, on the original tenancy agreement when I moved to London, the consultancy company that was helping me asked a number of clauses to be explicitly voided, including all of those that wouldn’t apply anyway, such as talking about gardens.

So when I received the agreement draft, I went through with the fine comb to figure out if any of the clauses would make sense to remove. And I did find a few interesting ones. For instance, the tenancy agreement required us to be cleaning internal and external windows every month. We live on the twelfth floor of a high raiser — there is no way for us to clean the external windows and even if there was it wouldn’t make sense for us to be responsible for that. I got the clause removed, together with a number of other ones.

Most importantly, I was looking for references to the headlease. And this is yet another thing that appears to be very UK specific and not sure if I have all the context to explain. You see, in the UK most flats are not outright owned by the landlords who rent them out, but they are on a so-called “leasehold” for often hundreds of years. Add to that a complex system of shell companies in partnership between the leaseholder of the land, the development company, the management company, and the whole set of leaseholders of the flats in the building, and in addition to the tenancy agreement you’re subject to the terms of the headlease between the … nebulous set of shell companies and your landlord.

I found this out by chance, by the way. When I moved, the consultancy company didn’t say much about it. When Dexters then eventually sent me a hot water charge bill, and I fell of the sky without having heard about anything like that before, I was informed that most likely that bill was referenced in the headlease, and as a tenant it was my right to request a copy of it, to verify it. I did request the copy — Dexters sent me a scanned PDF, except that whoever scanned it put it through the machine in the wrong angle, so it was showing a “landscape” page on screen, with only two thirds of the page visible, while the right side was blank. They had to get a new copy for it — they didn’t even check before mailing it out.

So of course the tenancy agreement had a clause that said “If this tenancy agreement is subordinated to a headlease, you will find this attached” (phrasing to the best of my knowledge). Except that no headlease was attached, so I asked for it, only to be told that no headlease was involved in the agreement. That would be surprising! Buying out a leasehold into a “freehold” is expensive, and not usually done for flats in high-raisers. But so be it, I asked then, if they are absolutely certain that no headlease would be involved, to remove the clause… which they did!

But here’s a trick a former colleague (Andrew) told me about: in the UK, you can find information about leases via the HM Land Registry, for a nominal fee (of £3 when I used this). With that, you can find out who holds the chain of lease of an apartment. While this did not answer the question of “is a headlease involved?” it did make it make clear that it was not a freehold, and at that point the agency was convinced to ask the landlord whether a headlease was involved, received it, and forwarded it over. The clause in the tenancy agreement was not re-established, though — they had already sent the lease to sign, and they didn’t want to wait the turnaround of re-signing the contract.

And just to make this clear, that doesn’t mean that we want to ignore the headlease — we just wanted to make sure we wouldn’t be surprised if requests came through that we were not aware of. Your mileage is likely to vary, but I hope that this kind of information might help someone else in the future. It’s not all of my own invention — it’s applying the lessons from Getting More: I did my homework and showed it to the agency, and instead of circling around whether something was immutable or not, we made it business.

Suppliers, Addresses, Banks

Once we signed the agreement, it was time to sort out the various bills, addresses, and stuff like that. These mainly fell into three categories: utilities, banks, and stores. There’s a few other cases beside those, but those are the big ones. The ease of updating addresses between these ranged… drastically.

When it comes to utilities in particular, it’s important to know the start and end date for the services, and most of the providers that supply a flat will handle overlaps in the supply, with more or less care.

So Energy (affiliate link because I like them, and recommend them for a simple and ease to use interface) requires at least six weeks notice to the start of the new furniture, allows overlap and will roll-up the due on the old account into the new one, but it required all the interaction to happen with a person, rather than through any automated system. This was not terrible — once I gave them enough notice and the address of the new supply, they didn’t have any hurry in providing the remaining details, since they were just accounting issues. Also they preferred email over phone, which as a millennial, is always a plus.

Thames Water also supported overlapping supply, but in their case the start date had to be no more than four weeks in the future, when requesting the move. And while the process can be kicked off from their website, their website is prone to crashing. Like So Energy, Thames Water creates different “accounts” per supply – even if you only have one online account – but unlike the other supplier, they don’t carry over the amount due, and indeed require a different direct debit to be set up, which I nearly missed.

Hyperoptic, which is an awesome Internet provider, doesn’t support overlapping supply. But on the other hand they did switch the supply from one port to the other while on the phone. Yeah the irony of the Internet provider being the one requiring me to stay on the phone is not lost on me. But the whole thing took less than half an hour start to finish. Except for one issue with the MAC address.

Indeed, the MAC address of my UniFi Security Gateway appears not to work to connect to their network — I solved the problem by changing the address on the gateway. I actually have been convinced there might have been some MAC filtering going on, though Hyperoptic has repeatedly told me they have none… until the last time I rebooted the gateway and realized it’s not that it needs the MAC that they used to have over here — it just doesn’t work with the MAC of the gateway itself. I now start wondering if it might be a routing table cache somewhere.

Most banks (and yes, between the two of us that’s… a few of them, because it’s not usually worth closing old accounts) were not eventful at all. Except for two, in both direction. M&S Bank, which is operated by HSBC, was the only bank that allowed you to provide a date from when to change the address on file. I wish I had noticed that earlier, because then I would have put it on in time to get at least one starting proof of address.

The other case was the Metro Bank, and this is worth talking a moment about. All of the other banks we had to update the account on allowed us to request the change online. Except Metro Bank. Their solution involved either going into one of their “stores” (branches), or calling them on the phone. Given that I’m still avoiding going out, I opted to call them. Unfortunately when you call, they need to confirm your identity with a bunch of questions followed by an SMS OTP. The SMS didn’t arrive within their expected timeframe, and they pretty much just said goodbye and told me to show up in store.

I’m not sure if the problem was due to coverage, or if the 4G/LTE support on my phone means I can’t receive SMS while on the phone (I heard rumors of that, but it’s outside the area of my expertise). But the end result was that the messages only reached me the moment I disconnected the call. So I had a decision to make — clearly, with the current pandemic, going to a branch to fix the address wouldn’t be a good idea.

I could have ignored the address change until the pandemic situation improved, since most of the mail would be forwarded by Royal Mail at least for the next year. But then I looked around, and found that at that point NatWest had a £125-one-off offer for new customers (even those with other NatWest group accounts, like me — I still have my Northern Irish Ulster Bank account), when requesting a current account switch (which implies, closing an old account).

And yes, I managed to open a new account – a joint account while we were at it – with NatWest without having to talk with anyone on the phone. It did take a lot longer than a simple address update would have taken, and now we have two more of the annoying EMV-CAP devices, but it also meant that the new account paid itself for the time taken — and it didn’t require us to leave the flat, or even speak with anyone on the phone.

Oh Yeah, The Stores

So I said above that we had to make sure to update the addresses for stores as well (and a few other things). Well, that’s not the hardest problem of course — most of the communication we get is electronic, very few of the stores will send us mail. So instead of proactively going out of our way to update stuff, we did what everyone does: we procrastinated. With exceptions. I wrote down on a piece of paper all of the sources of mail that sent us something in the last month at our old address, and those, together with whatever would be forwarded to the new address, would get their address updated immediately.

I say immediately of course, but it still takes time. My wife’s membership of Cats Protection was updated fairly quickly on their backend, but the mail merge source they use to send the membership letters out takes a few weeks to update. So we received a few of those letters addressed to the old place. The only annoying part is the waste of purrfectly lovely return address labels that are for the wrong address now.

After those are tackled, there’s the matter of the mail arriving for the previous occupants of the flat, who did not set up Royal Mail redirection. As it turns out, we didn’t have to do much work for that — they have a friend living in the same building (just as we have in the old building), so we were just asked to drop it off on the other mailbox. But we noticed that we kept receiving, every fortnight or so, the Harrods catalogue.

So here’s another trick for those who might not be aware: if you moved into a flat, and the previous occupier keeps receiving subscriptions, offers, discount, and similar things, it’s perfectly reasonable to contact the senders and ask them to cancel those mail. Most will ask you to prove you have access to the mail (not your proof of address, but the proof of having the other person’s mail) and will then remove the address from the file. Turning this around, if there’s something you really care about and don’t want someone else to unsubscribe you from, make sure not to throw away the address label in one piece. If you don’t have a shredder at home, at least make sure to tear up the address in half.

And to finish off the post with a note of levity, in December I also received a surprising letter from Amazon, to our old address. I say surprising, because we made a number of purchases to the new flat (even the week before moving into it), and so there’s no reason for them to reach at the old address. Even the credit card I got from them just before Prime Day had its address updated on file very quickly after receiving it.

Well, it turned out to be addressed to me, but not quite to the old address. It was addressed to the address I used on AliExpress — slightly different formatting. It was addressed to the Diego Elio Pettenò who has an account to leave review of terrible, cheap products, as part of the usual brushing scam. Once again, Amazon is unable to deactivate the account created in bad faith that happen to use my name (and possibly my profile picture, I cannot tell).

More British cashback: Airtime Rewards

You could say that one of this blog’s “side hustles” is talking about cashback offers. I think it all started with the idea of describing how privacy compromises work, but more recently focused on just one fintech’s free money distribution. This time I have something to talk about that again touches on both points.

Airtime Rewards is a cashback program that was advertised to me by my mobile phone provider, and it is indeed a bit different from other programs I’ve seen, because the cashback can only be redeemed as credit to your (or someone else’s) mobile phone bill — thus the Airtime part of the name I guess.

The way it works is pretty much reminiscent of the US-only “Rewards Club Dining”: you sign up for an account, and you give them your payment cards’ details — PAN (the 16-digit number), CVV and expiration date. They don’t charge you, instead they set up a “trap” on those cards, so that they are notified when you spend on them.

And this is honestly borderline even for me, as a privacy invasion. I haven’t worked deep enough in payment systems to actually know how those traps are implemented, but it sounds like the companies like Airtime Rewards are getting pretty much a huge feed of your spend, not just related to the vendors they offer cashback for. But don’t quote me on that because I don’t actually know how they implemented it, it might be totally benign.

Now let’s preface this with one important bit of information: only Visa and MasterCard cards are usable for either of these two options. American Express is, once again, a walled garden — they are effectively the iPhone of payment cards, for good and bad (including costs). Just like they don’t allow vendors to scam people via DCC, they don’t seem to allow traps of cards for payment.

So how does this program fare, and why do I even bother talking about it? Well first of all, if you’re the type of person who don’t like leaving money on the table at any chance, it’s actually pretty good, as long as you visit the stores involved. I signed up for this just before Christmas shopping, because I knew we were going to spend a bit of money at Debenhams, and they had a nice 5% cashback, but even just the couple of orders from Waitrose, and the usual stock-up at Boots were enough to get back ~£30 in a couple of months. It’s not going to pay for the phone bill constantly, but it does pay for a few vanity domain names, at the end of the year.

The cashback offers from various retailers are there to make customers chose them over alternatives. This has worked a tiny little bit with Airtime Rewards, in the sense that I factored in the cashback offer when choosing between ordering from Morrisons, Waitrose or Ocado — because sometimes the cheaper is actually winning due to cashback offers, either Airtime Rewards, or Santander. For the most part, a number of our usual destinations are part of the program, so Boots, Pizza Express, Ryman, or (more recently) Uniqlo are nice to see. For a while, Morrisons was also part of the program, but that has not been the case for very long — it appears there’s some variability on which retailers sign up, that suggests there may be a middleman company handling the retailers connections.

Speaking of Santander cashback, because Airtime Rewards attaches to the card number itself, it is possible to combine the two offers, making it closer to (sometimes) 10% cashback than 5%. The same is true with Curve, although note that you can’t stack Curve and banks’ offers, as the latter only see the charge coming directly from Curve.

One very annoying thing with the way Airtime Rewards work, compared to offers by banks, Curve, and American Express, is that they only hand you the cashback credit after a “confirmation period” by the retailer — namely it seems to be matching the various retailers’ return policies. Which means it’s taking 90 days to confirm a Morrisons transaction, despite Morrisons not being in the program anymore. It feels very strange for restaurants (like Pizza Express) needing 35 days to confirm a transaction though — I don’t think I would be able to return my lunch there.

One important thing to note is that the offers are also not quite uniform: while most of the offers are valid for both MasterCard and Visa, some are only available on one or the other circuit. It’s not a big deal for me, as I always preferred having one card on each, but it’s something to keep in mind. Not all the offers are available online, either – again the Morrisons offer I referred to above was only available in store, which excluded home delivery – and then there’s the catch with Google Pay and Apple Pay.

You see, when you pay with Google Pay or Apple Pay, you’re using a “virtual card” — the PAN of the card reported to the merchant does not match the one printed (or embedded) in the card that you connected. This has been described as a privacy-preserving feature by many, although I can’t find any obvious official documentation of this. The idea being, if you pay alternatively with your phone (or different phones) and your physical card, the merchants shouldn’t be able to tell you’re the same customer (but the bank, obviously, can). Turns out this is also not true, because indeed you can attach the PAN of a physical card to Airtime Rewards, and you get your cashback when you pay with Google Pay (connected to that particular card) at some of the retailers.

I say some, not just because Airtime Rewards explicitly only marks some offers as compatible with Google Pay, but also because experimentally I can tell you that even some of the offers that are marked as Google Pay compatible don’t actually work when paying with Google Pay. That was the case, for instance, of Carluccio’s: the only time the cashback got registered was the one time I paid explicitly with my physical card.

What this does mean, though, is that there’s a way for third parties (beside you, your bank, and Google/Apple) to connect payments by virtual cards with the corresponding physical card. And honestly, that’s the scariest part of this whole program.

So, at the end of the day, what if you’re interested in signing up for this? You can sign up here, and use code P7YR6TPE to get £1.5 bonus for you (and a matching one for me). Or maybe you can check with your mobile provider, that might have an even better sign-up offer, honestly.

Curve is giving “free” money away, again.

About a year and a half ago, I reviewed the Curve debit card, and I went back talking about it when talking about foreign transaction fees. If you don’t want to go back and read the whole set of text, I’ll give a very brief description: Curve is a proxy-card, that allows you to connect a bunch of other debit and credit cards, and to decide when you pay (or, critically, shortly after) which card you want to charge your expense to. It includes a few features such as some amount of free (or cheaper) transaction fee spend, but the “proxy” nature of the card is the selling (or not-really-selling as I’ll explain later) point.

In my previous posts, I have made two main points about Curve: the first is that they give away for free most of the useful features of the service, and the other that they make no real sense in the UK, as one of the possibly biggest selling points (the foreign transaction free nullification) is vastly irrelevant: most high street banks have some offering with no foreign transaction fee, and I still venture that Santander is the best UK offering for globetrotters who need to use their card in many different currencies. Despite my fairy pessimistic view of Curve’s business plans, it seems like the management is taking a different view — even FT Alphaville wrote about their marketing campaign.

Speaking of pessimistic view — I am a bit skeptical about their marketing of “100 Cards in One”. While it would be a great feature a few years ago, in 2019 most of my spending goes through my phone, with Google Pay. While I have half a dozen separate cards, most of them are compatible with Google Pay, so I don’t carry them with me. The ironic exception being my company card. As it turns out, this is something that Curve can help with: it now supports Google Pay, and on a business trip I can proxy my expenses to the company card.

Now, one claim on their website that appears to mostly hold true is «Your gateway to money for nothing.» Because they do appear to run lots of promotions that give you free money. Indeed, in the past week I received two email from Curve: one to announce that they would give me £5 if I just used my card at all (which I did, just to see if they pay up), and another to tell me that they are giving a “Christmas gift” for all their users to select three new retailers to get their 1% cashback from. All of this for a “Curve Blue”, which is their totally free tier.

Speaking of the 1% cashback, when I signed up last year, Amazon was not one of the options, or I would have taken it. It was this time, so I did that, under the impression that one way or another I do end up buying stuff off them often enough, and in the next three months I may get some value out of it. Despite this, their paid offer is still pointless: they charge you £9.99 a month, and to cover that on cashback alone you would have to spend £1000 a month from those three retailers. And no, I don’t think the Travel/Gadget insurances that they peddle with the offer mean anything else — there’s a doubling of how much free cash you can get from ATMs, but they appear to have closed the loophole that allowed you to withdraw cash and get loyalty points, or cashback, from a credit card, without incurring in cash handling fees.

So yeah, it looks like they do give money for nothing. Well, for some profiling data I guess. The obvious question is where that money comes from, given that the free offering is just compelling enough, and their paid offering are… in one word, overpriced. As I said in the previous post on foreign transaction fees, Santander offers their All in One Credit Card for £3 a month, and is also 0% foreign transaction fees and comes with a 0.5% cashback on all purchases; recovering that monthly fee requires “only” £600/month spend across any vendor (and not just three), and if you spend more you can probably pay for the travel/gadget insurance separately. And since it’s issued as a World MasterCard (rather than a Debit MasterCard), it also allows you to use some of the available perks worldwide, including some airports’ priority lane at security (as it turns out, that includes Venice Airport, which is very handy since that’s where we fly in and out for to see my family.)

And if you want to compare with the Curve Metal offering at £14.99 a month, well, Santander offers a World Elite Mastercard at the same price point, which comes with the same 0.5% cashback (although capped to nullify the monthly fee.) Despite not coming with the insurances (which again I don’t find particularly compelling, it does have a discount for Santander’s own offering. And it provides LoungeKey access just as well, except that you don’t have to pay the £20 per person entry fee. Being a World Elite card, it also comes with a bunch of other perks, including a Boingo subscription (not particularly compelling to me either, but worth noting.)

Anyway, if you are yet to make your Christmas purchases, and are interested in getting some more extra cashback with Curve, you can download the app from their website and if you want you can sign up with the code BG2G3 to get another £5 out of the magic free money card (and give me the same.)

Revolut, as of October 2019

A few months ago I wrote a not-so-short comparison of a few FinTech services with offerings from high street banks in the UK — and I would note again, that the comparison does not hold up in Ireland, so it’s definitely biased, but I would uphold it for good reason. I think it might be time to do a bit more dusting over it.

The first service I should get back to talk about is Revolut, which I first praised and more recently complained about. As I said in a number of previous posts, my reasons to keep using Revolut for day-to-day transactions have pretty much disappeared: my Santander credit card gives me 0.5% cashback on all transactions, and no foreign transaction fee, why would I use Revolut? Virtual cards, and rotating-number cards are interesting and have their use, but honestly, I can’t be bothered unless it’s for very shady operations where I don’t trust giving my credit card, but those are pretty much corner cases.

Revolut has been running multiple advertising campaign throughout the London Tube, the most recent one promising three Tube trips free if you pay with Revolut. I could probably do that, next week, maybe, if I paid enough attention — I don’t use monthly tickets, so I can change card any Monday as long as I use it until the same until Sunday to cover the 7-day cap. But I had bad history with using Revolut on the TfL network before, although admittedly that was when I was landing from Dublin, and the location-based security tripped.

Update 2019-10-07: turns out I cannot actually use their TfL offer because it relies on Google Pay (which with Revolut I found already too unreliable to use for commuting) and only works if you have a Visa-issued card. My card is MasterCard-issued still.

If you check the news, the FT reported just this week how Revolut expects to reach “viability” despite continuing to lose money. This is likely because, as I pointed in my complain-post, Revolut makes perfect sense as long as you’re not paying anything for it. The only reason to sign up for any Premium or Metal tier in London (where most of their advertising budget appears to be spent, from what I read from news) is if you don’t understand the services available from the high street, or if you want to subsidize the free tier for everyone else. Funnily enough, FT Alphaville reported on the same day of the staff cashing it in.

I had to use Revolut only once in the past few months, and that was a couple of days ago. My sister asked me if I could send her some money for her to use the card, as her debit cards expired and she was trying to buy something — remember Italy does not have “faster payments” so inter-bank transfers are not instantaneous. It should be a simple operation: top-up £50, send £50 to my sister, she can convert to € and spend it.

Topping up worked like a charm. But sending the money didn’t: in addition to confirming my fingerprint, the app said it would send me an email, and to check the email from the same device to confirm the operation. The email can be re-sent only after one minute, but (as often) it recommends you to check your Junk or Spam folder too. The email never arrived. I don’t mean within a minute. I mean that this is two days later, the email has still not arrived yet.

No the mail server was not having a hiccup. Yes I did try resending it five minutes later. Yes I did check the Spam folder. No it’s not graylisting. My email address is served by G Suite, which means it’s more reliable than a normal Gmail address. Revolut can’t seem to be able to send email to Gmail. And it’s not just me. The same problem with email not arriving happened a number of months ago to my girlfriend, while sending money to my Revolut account! Anyway the answer is that I now have £50 that I can’t seem to be able to send to my sister, she ended up asking our mum for the transfer instead, and I have even less trust in the service.

I complained on Twitter about this, but without tagging in the Revolut account. When this happened to my girlfriend, and I ranted at them about it, they kept insisting to “check [my] spam folder”, which of course we did. If I asked now, I’m expecting to hear that “PSD2 made them do it”.

It’s sad, but I can’t really expect much better from a service that, despite a lot of nice ideas at the start, appear to have found a business model only to augment banks in places where high street has no offering (Ireland), or for people who can’t seem to know better (the whole Bitcoin/cryptocurrency part, that appears to be the sole attraction for Premium/Metal for quite a few people).

PSD2 Made Me Do It

The European “Revised Directive on Payment Services” (usually just called PSD2) has recently enter into to legislation in many countries, including the UK — despite the current political turmoil. In addition to requirements around data access and APIs, and additional limitations for financial service providers, it includes the requirement for financial institutions to provide what is called “Strong Customer Authentication”.

The idea is to provide a stronger guarantee that it is indeed the customer accessing their balance or executing a financial operation. None of this should feel particularly sophisticated, given that banks have provided multi-factor authentication options for many years before this. But if you have read my blog before, you probably know my opinion on banks’ security theatre features.

Indeed, UK – and Irish – banks still appear to believe that asking only a subset over characters of a password, or of digits of a pin, is a good security practice, despite this been easily debunked by any web engineer with a bit of sense.

My job has nothing to do with financial services or PSD2, which means I have a very basic understanding of its intricacies. On the other hand, I’m able to observe how various companies are receiving the directive and implementing it for their customers. Take for example American Express, who sent reminders to their customers to keep their Android app up to date, as they are preparing to send SafeKey notifications – their “2FA” authentication similar to Verified by Visa and MasterCard SecureCode – directly to the customers’ phones. Similarly, Santander recently sent me a contract update that, among other things, gives them permission to send notification via app or email, rather than just SMS. Pretty much the same story applies to the Italian UniCredit, which also replaced their physical password cards (yes, they still had some) and RSA tokens with app notifications.

This is not rocket science or anything particularly new. Even my American bank, Chase, send similar notifications to either SMS, or email, whether it is while logging in, or executing a transaction — and American banks are not particularly well known for their innovative ideas. Indeed, Chase has been doing this for the past three years, without any directive requiring it, and with a fairly low bullshit level. And it even supports OAuth2 delegation for transfers, which TransferWise uses. I guess we’re now seeing European banks catching up to be fairly low bar.

On the other hand of this we have Fineco, now no longer part of UniCredit. Their “strong customer authentication” appears to be an additional 7 digits PIN called “mobile code.” How and where this is going to be used is not particularly clear — the announcement says it’ll be used to hide your balance, but that does not appear to be the case right now. You need to set it in the mobile app, and once done, you’re proposed to link it to your fingerprint. The interesting part is that you already need an additional code to execute operations, and you needed it for the past two years. You also have a separate “client services” PIN, and both of those are 8-digits. And the “web password” is itself only 8 characters. You would think that instead of four “memorables”, having one that can be longer than 20 characters would work better.

Settings banks and financial institutions aside I think nothing can top the original email sent by John Lewis, the British department store (that also operates the Waitrose supermarkets). On September 2nd, they sent an email titled Important information about payment changes, which effectively introduced PSD2 and SCA to their customers. In the email, there was this gem:

SHOPPING IN STORE
You’ll notice changes when making contactless payments in our shops, including when using Apple Pay, Samsung Pay and payments via wearable technology such as smart watches. You may be asked to insert your card and key in your PIN. Chip and PIN payments will continue to work as normal.

WHAT YOU NEED TO DO
As the checks are random, you won’t know in advance whether validation is required, and neither will our Partners. So if you plan to use contactless payment, make sure you have the relevant card with you, or an alternative method to use, so you can continue with your purchase.

my John Lewis email, 2019-09-02

I took it to Twitter then to rant about the insanity of suggesting customers to insert a card when using a mobile-based payment system. Not just because there may not be a card to insert (Revolut allows connecting a virtual card to Google Pay, so there’s no matching physical card for it), not because there shouldn’t be a way for merchant to link the Google Pay/Apple Pay to the original card you connected, but most importantly because the authentication provided by an unlocked phone is stronger than that of a Chip’n’Pin card.

But they went even worse with “What you need to do”, because they are explicitly saying that they were introducing random checks, not risk-based checks which PSD2 and SCA are usually suggesting. And let’s ignore again the note of “relevant” card that may not exist. It makes it a lottery to figure out if you can pay for the groceries you’re buying, and honestly I don’t want to have an awkward moment when their till system decide to quiz me on a card I might not have to begin with.

I don’t know if anyone at the store chain noticed my tweet rant, but two days later, they sent another email, titled An update on Strong Customer Authentication.

At John Lewis & Partners, we are committed to ensuring you have a safe and secure experience when shopping with us. On Monday 2 September we sent you an email about Strong Customer Authentication (SCA) and the importance of your card issuer having your most up-to-date contact information.
We incorrectly suggested that you may be asked to insert your card and key in your PIN when using Apple Pay and Samsung Pay. We are pleased to tell you that you are not required to present your card or enter your PIN when using these payment methods, and you can continue to use Apple Pay and Samsung Pay as normal.

my John Lewis Email, 2019-09-04

I don’t know if this is a change of plan, where someone pointed out that implementing it that way was silly, or just a communication error in the first place. But it definitely shows how careless the communication around this was from John Lewis. I somehow expect that other companies are on the same boat, and I just haven’t noticed because I’m not their customer.

Speaking of Twitter, I saw at least two people recently complaining that their banks refuse connection from IP addresses from countries outside their operation area. While this does not seem to be announced as part of SCA, I have a certain feeling that this is becoming more popular because of it. It’s the same kind of risk analysis that forces me to use TunnelBear to connect to my GP’s online services to order my medical supplies if I’m traveling, as their app is rejecting any request coming from a non-UK address.

I’m afraid that as usual, with bank security, we’re not talking about rational solutions. We’re instead looking at solutions that consultant can sell to banks, and that bank management can feel confident enough to defend in court. And maybe confuse their customers over the fact that they may be making their life miserable, but they do so for security.

It effectively reminded me of Andrea’s work on chip-and-pin implementations, now nearly eight years ago:

Andrea Barisani and Daniele Bianco talking about Chip&PIN.

Honestly, I wish banks took their ideas from TransferWise, which, among all of my bank accounts, is the only one implementing 2FA as push notifications with the app they have on my phone.

Opinion: FinTech vs High Street

If you’re a regular reader of this blog, you may have noticed that I have strong opinions regarding consumer financial services, particularly when it comes to Revolut, which I wrote about a lot by now.

I didn’t start writing about these services because of a professional interest, but rather because when I moved from Italy to Dublin (via Los Angeles), I felt like I stepped back ten or more years with the banking system. And while this improved significantly when I moved to London, there are still a few things baffling me from time to time.

But as I discussed in one of my recent Revolut-bashing posts, compared to Ireland the high street banking options in London are so much more interesting that I’ve effectively ditched Revolut for day-to-day payments. So why would anyone care about FinTech products?

I have been thinking this for a while, not just as a customer, but with an awareness that, if I decided to change my perspective in life and go for a riskier professional position, from my rather cushy one, FinTech appears to be the place to be right now. Particularly given the unfortunate experience I have gained in this field by now.

One of the issues appears to be one of branding, and trust. Quite a few people appear to have a dislike for high street banks because of their association with previous scandals or news. And that’s what makes it funny to see how high street banks appear to just want to enter the market with new brands.

Another thing that Monzo appears to capitalize on, in their tube advertisements, is the ability to receive instant notification of the money spent. And that’s something that I deifnitely can relate to. This is particularly important when you get to more shady stores, or to coffee stores with untrained staff, that may suggest that a transaction didn’t really go through, and suggest you to pay cash instead, charging you twice.

Indeed, this was one of the biggest advantages of using Revolut for me in Ireland. The “famous” Tesco Bank credit card didn’t really have even an online banking platform, and the only way for me to confirm whether a transaction went through was by looking at my Tesco points statements. But this is not something revolutionary: I had notifications of all online transactions, and card-present transactions over €50, on my Italian pre-paid card in 2006 (via SMS, not via app at the time, of course.)

While I feel Monzo is right to take a swing to most high street banks for not implementing these notifications, even in 2019 London it’s not true that you need to “go FinTech” to have this level of support. My American Express does the same, and you cannot say that AmEx is a new player on the market!

And it doesn’t stop at just sending me notifications for the charges: American Express goes one step further, and integrates with Google Pay so that you get the notifications even without having the American Express application installed.

Indeed, I have a feeling that, for the most part, customers would be happy if the level of support in high street banking was on par with American Express:

  • Their website lets you log in with a simple username/password combination, rather than the silly security theatre of “Give me the 1st, 2nd, 123th character of your password, and 1st, 5th and 6th digit of your PIN” (seriously, setting aside the random index selection, why on Earth do you need two equivalent factors?)
  • New charges on the card are notified immediately, either through app or through Google Pay (I don’t know about Apple Pay but I assume that’s the case there as well).
  • You can get your card’s PIN online, which is usually verified by a text message OTP.

One of the things that AmEx does not do, that I think all of the FinTech players appear to do, is freezing/unfreezing the card on the fly. A feature that Barclays has been advertising all over as if they had invented it.

It is pretty much possible, or certain, that some UK high street banks already started providing all of these options, maybe in different combinations. As I said, Barclays does appear to have the ability to freeze/unfreeze the card. Fineco does not mail out the PIN but rather has you requesting it online and delivers it as text message. And as I made as a point before, Santander has a credit card with no foreign transaction fees.

Many of the articles I read over the importance to FinTech startups imply that the main reason why big banks can’t be this flexible or “innovative” is that they have old, heavy and difficult to manage backends. From second hand discussions, I can believe that the backends are indeed as heavy and clunky as they are purported to be, but it does seem to me that many of the features involved can’t be that tied to the backends, given that most of the banks can provide those features already.

A number of features that I see being deployed throughout different banks is the ability to “budget” expenses. While they sound particularly interesting, this appears to be mostly a “frontend” feature. Santander has this feature, but somehow they decided to implement this on a separate Android app only, which I gave up on. Indeed, it does not allow you to correct their classification of expenses, which makes it pretty much useless, not just because some vendors are classified completely wrong, but also because sometimes the same vendor might be used for different reasons (Boots, CVS, Walgreens, and similar all provide both medicines and groceries; how you categorize their spend depends on what you bought!)

While Santander have already won me over as a bank customer, I do feel that they would win over more of my credit card expenses from American Express if they implemented “this one weird trick” of informing me of charges as they happen. Because small things like that are one of the reasons I use my AmEx quite a lot in the UK, even after I reach the needed spend to upgrade my Marriott membership to gold.

So yeah, my hope is that high street banks will finally see the competition from FinTech as a list of features that they should, opportunistically, implement, rather than an excuse for the branding and marketing departments to come up with new ideas to be “hip”.

Speaking of Foreign Transaction Fees

In the previous post about Revolut, I have left open a topic that I wanted to move to its own post: foreign transaction fees.

For those who are not acquainted with the terminology here, with foreign transaction fee I’m referring to the additional fee levied by banks and payment card companies when you incur expenses in a different currency than the one the card was issued for. Sometimes (particularly in UK and Ireland) this is referred to as an “overseas transaction fee” — which is confusing, particularly for Ireland, where the fee is applied for expenses in GBP (which is not overseas, but rather “up the road”), but not in EUR (which is mostly oversea).

This is a different cost incurred than the possible bad exchange rate that the financial institution may be applying, and it has nothing to do with the various DCC scams that you may run into when going to touristy destinations with a non-local card, although there is a link there: even online, services may suggest you to apply the charge in your local currency to avoid foreign transaction fees — as you can see in the linked post, that’s rarely a good idea, with a few exceptions (e.g. PayPal actually applies sane conversion fees in my experience, even if not the best ever).

These foreign transaction fees are set by the card issuers, and vary widely. I have seen cards with up to 6% “fex fees”, but that was back in Italy (why I say that will be clearer in a moment). In Ireland, with the exception of various fintech companies, the typical fex fees were of 2-3% — I was very happy with Tesco Banks‘s 1.75% fex fee (Tesco Bank no longer operates in Ireland.) In the UK, it appears most cards either have 0% fex fee, or 2.99% fex fee; there are a few divergences, but those two appear to be the most common options.

The reason why I am specifying this information with a country attached is that, in addition to telling you what the currency is, the mix of local-vs-foreign spend for the average person is also connected to the country. For instance, for my friends and family living in Italy, foreign transaction fees only exist when buying from foreign websites (or eBay), or when going on a “far” trip — Croatia and Switzerland being the closest countries that incur the fex fee. On the other hand, if you live in Ireland, you’ll probably have at least one recurring expense in GBP — depending on how Brexit is going to go this may change.

Indeed, for electronics you often need to look at the UK, rather than the continent — because of plugs, regulations, availability, etc. And quite a few eShops with presence both in the continent and the UK used to refuse you service from the European website, referring you to the UK one instead — this is another thing that may change after Brexit. There is a reason why, when discussing markets, most companies call it “UKI”.

I’m told that a similar situation exists for those living in Switzerland, and I can imagine this goes similar in the Nordics, given that Denmark, Sweden, and Norway have their own currencies as well, and likely a lot of services overlap.

In the UK (and again this may change after Brexit), you may very well never spend money outside of GBP because all the services exist within the country. Unless you’re an expat, in which case you’re probably still visiting the continent (Eurozone or not) fairly often, or may be paying for ongoing services (such as cellphone contracts) in that currency. This probably explains why the two sets of fex fee groups: if you’re part of the first group, you probably don’t need a card with no foreign transaction fees — while you really do in the latter case.

In my case, I have two credit cards: one from Santander, which I spoke of last time, with no foreign transaction fee, and an American Express with a 2.99% foreign transaction fee. I effectively spread the expenses on the two cards, depending on where I am — namely I try to use the Amex in the UK, and the Santander anywhere the other does not work. I could give up on the Amex, as the Santander is strictly a superset usage, but the perks provided by Amex are worth having. And that’s the most important thing: cards have perks, so you should probably consider those as well.

Thus the utility of fintech services like Revolut and Curve depend on the country you live in not just because it sets the band for foreign transaction fees, but also because they set the tone of foreign currency usage. In the UK, with the wide availability of debit and credit cards with no foreign transaction fees, their services are likely less useful than in other countries — except when it comes to perks. Indeed in the case of Curve, you would be able to keep most of the perks of a credit card, such as cashback, even if the card comes with a hefty foreign transaction fee. Except for Amex of course.

But is it convenient for you to pay for such a service? That’s another very good question. And to answer it, I’ll try to forget about the UK and go back to Ireland — mainly because here, as I now repeated a number of times, cards with no foreign transaction fee exists and you can just use one of those. Metro Bank has free current accounts with cards that come with cards without foreign transaction fees in Europe. Santander has a £3/month credit card with no foreign transaction fees, and 0.5% cashback. Halifax has a Clarity MasterCard that comes with no monthly fee, no foreign transaction fees (and of course no perks.)

But let’s go back to Ireland and take a look at the options. As I said the usual foreign transaction fee in the country was between 2% and 3%. In the case of Ulster Bank, the card I used to have had 2.75% foreign transaction fee. At which point would it have been cheaper for me to subscribe to Curve Black, at €9.99/month, rather than give Ulster Bank their fees? (And for simplicity here, I’m not talking about exchange rates; the exchange rate for their MasterCard is network-provided so it’s not at all bad, and in fact it’s comparable to Revolut’s.)

As most services would require a yearly commitment, we should consider the spend on an yearly basis too. This makes the cost €119.88, but we’ll call it €120 to make it easier to run umbers on them. Let’s just call the twelve cents a rounding error. If we’re ignoring the cashback options (as in Ireland there were none, beside Tesco Bank), the amount of foreign expenses you’d need to break even on Curve black with the foreign transaction fee noted above is about €4364 (divide the yearly cost by the foreign transaction fee). That’s the cost of fairly big vacation for a family (note that you can’t include flights in the vacation cost, as those would be billed by the currency of the country of origin, which is likely local).

If you have a card that provides cashback, then things become more complicated, because you’d have to include the cashback in the calculation. If you’re curious the following formula will give you the number, making S the yearly subscription cost of the service, F the foreign transaction fee percentage, and C the cashback percentage:

(S + (S/F) * C) / F

For Revolut Metal, with their variable cashback, figuring out the number is a bit more annoying. But we’re also talking about 1% in the best case scenario (all non-European spend). So the basic number (€5673) only goes down to €5616. The 0.1% cashback option of all European spend is so minimal that it’s not worth calculating exactly.

So what should you do if you don’t usually spend that kind of money on foreign transactions? You can still use the Revolut and Curve and other fintech services without paying for them, and grab the best deal you can until they go bust. Or if you don’t want to bother, you can just spend on your normal cards, get your usual perks and ignore the need for no foreign transaction fees.

Indeed, if your options are spending on Curve attached to a debit card with no cashback and no perks, or spend on an American Express Platinum Cashback Credit Card, you would need to spend more than £5330 a year in foreign transactions for it to be worth it — and that’s assuming you don’t qualify for the higher tier. And this is probably the worst case scenario for the UK, for a non-zero foreign transaction fee card.

Is Revolut Still a Good Thing?

You may remember that a few years ago I wrote a positive review of Revolut, the fintech startup that provides payment cards with stored value and no foreign transaction fees. I have been using it for a long time by now, and had mostly stood by that review, until the second half of last year, where things started to appear more complicated. Given the current flurry of stories on the company, from silly advertising shenanigans to uncovering of poisonous working conditions, I thought it would be a good time to write some more up to date words, as I don’t think I can recommend Revolut as much as I did before anymore.

First of all, I started feeling uneasy recommending Revolut since they started down the path of selling cryptocurrencies as an added-value feature. I hold a personal belief that participating in the trading of Bitcoin and other similar “currencies” is unethical (see Thomas’s rant on the topic), and I don’t like being associated with companies focusing on them. I have looked the other way for a while, though, because I knew that using the words “cryptocurrency” and “blockchain” make money appear out of nowhere for most startups, even when there’s no rhyme or reason for it. I just had a bad taste in my mouth for this.

The problem is that Revolut, even when I had the Premium version, built something very cool, but a bit rough around the edges. And as a customer, it is annoying to see them jumping the shark onto cryptocurrencies, instead of making location-based security actually reliable, implementing 3DSecure/VBV integrations, or finding a way to get a proper banking license and FSCS insurance (all of which would be requirements for me and most people to use Revolut as a replacement for high-street banking).

Instead, what we see is that Revolut is adding “features” trying to upsell you into their premium services. This is not entirely bad, because you need paying customers to run a business. Unfortunately my impression is that they offered and offer so much on their free tier, that they are tackling on random stuff that has nothing to do with banking itself, just to get people to sign up for their Premium and Metal tiers.

As an aside, I still don’t understand this trend of providing heavy (“18g” as they boast some companies) metal cards. The last thing I want from a credit card is to be heavy, as I barely even want to have to take it out. I’m all in favour of the trend of not embossing the name and number, preferring to print it on the back, but it does not need to be metal for it. Indeed, Curve (that I’ll get again in a moment) did exactly that.

We’ve just come back from a trip to the Continent, and what we did notice that Revolut tried to upsell us medical and travel insurance at every change of country (even when we just connected flights through third countries). This is not just annoying as we’re not interested in it (we’re European citizens, visiting European countries, and work provides both of us with a basic travel insurance), but it’s also annoying because it makes use of the location information, which I provide for the security feature, for marketing. Similarly, I recently had more notifications about them trying to upsell me Metal than actual transactions.

For a while, I actually did pay for the Premium service. Mostly under the idea of “putting my money where my mouth is”, that is to make sure that the company could keep operating a service I loved. Unfortunately it turned out a bad idea: not just because Revolut cannot replace a high street bank in the UK (no FSCS to protect your account, no BACS direct debits, etc), but also because the Premium “perks” were not something I cared about, and the dedicated service team was still useless when it came to even telling me the top-up limits when I changed the card I used for top-up.

If you already have two physical cards (and paid for it), you need to pay to replace one of them with a Premium card, if you so wish (but it gains nothing but a different colour, so I never did that). The unlimited exchange is not particularly useful when you already don’t reach the free tier’s spend, and the ATM limits is only useful if you plan to actually use cash, which I really try not to. The one interesting feature that is advertised for Premium customers, but as far as I can tell is also present as a one-off charge for non-Premium one, is the disposable virtual card, that changes PAN every time you use it. But even that is not as secure as it looks, as I’m told that vendors are still able to charge again a disposable card that already changed number.

Okay admittedly there’s the travel and medical insurance, but as I said earlier, I get a better travel medical insurance from work (and probably there’ s better out there) and a credit card such as American Express would provide a better baggage/flight insurance. This is very subjective of course, it’s well possible that for other people, with other employers, and in other countries, these insurances are actually worth it.

Speaking of circumstances, I think I might not have felt so strongly against Revolut if I was still in Ireland. Not just because they seem to have implemented SEPA DD Core support, so you can actually use it to pay your bills there, but also because the alternatives of high street banking there are significantly worse than here.

In London, I now settled on Santander as my primary bank, both for the current account and for a 0% foreign transaction fee credit card, their All-in-One Credit Card. These come to £5 per month for the account, and another £3 per month for the credit card (compare against Revolut’s premium at £6.99 and Metal tier at £12.99), and while the free foreign ATMs withdrawal are limited to Santander’s own network (limiting the countries you can use them on), this is a full-featured, FSCS-insured account, with cashback, retailer offers, and active interest on the current account’s deposit. If you don’t want (or can’t afford) a credit card, Metro Bank offers 0% foreign transaction fee for European transactions on their free accounts’ debit cards. And I’m sure that other banks have similar arrangements all over the place. Basically, the UK has a significantly wider range of offers, that make Revolut less necessary than in Ireland.

But even for Ireland, and for other countries that do not have such a selection of high-street banks, Curve – that I complained about before – decided to change their target marketing a bit, now offering a “front” for any Visa and MasterCard card to provide 0% foreign transaction fee, with their premium option existing to raise the limit of monthly transactions. That would have been something awesome to have when I lived in Dublin, to keep getting Tesco points, while not paying the 1.75% of foreign transaction fee on their credit card. (If you are interested to try that, my referral code is BG2G3).

Both Curve and Revolut have a Metal card with which they provide cashback. In the case of the former, these are retailers-limited, and I can only assume they are based on some third party’s selection of perks, as the retailers are pretty much the same that Santander and Lloyd’s provide retailers offers for. Revolut instead provides cashback on all spend, 0.1% on European spend, and 1% for non-European spend (although there does not seem to be an obvious definition of Europe on their marketing material, I assume it’s deep into the terms of service).

While cashback is always a nice bonus, it only makes sense if you can break even on the cost of one’s service by spending. With Revolut Metal, that would be an astounding £13k (thirteen thousands pound) per month in European spend, or £1299 of non-European spend. I do know some extremely frequent travellers to the States or Asia that would be able to spend the latter, but that’s more of an exception than a rule. And if you can spend the former, you probably can get more than that in interest by keeping the money in an active-interest current account, and paying with a normal credit card.

For comparison, Santander’s card I linked above costs £3/month (you don’t even need their bank account). It has 0% foreign transaction fee on all spend. And a cashback of 0.5% (five times Revolut’s European cashback) on all spend. It takes only £600 a month to break even, and that’s without counting additional retailer offers, or additional perks from their current accounts.

And even if you look at American Express (which is never considered a cheap option) and their cashback options, the numbers are significantly different. Their Platinum cashsback card is £25 per year, and includes a better travel insurance, 1% cashback on all spend to £10k and 1.25% over that. Plus retailers offers and supplementary cards for the family. Although be warned if you want to go down that road, that American Express charges you 2.99% foreign transaction fees, for every single one of their cards in the UK.

I was going to take a detour talking about foreign transaction fees, but I will leave it for another post, because it’s a lot of content, and a lot of explanation to be done there.

So the final words of this post are: I’m not sure I trust Revolut anymore. They seem to be taking “marketing risks” to get people to pay for services, but at the same time there’s very little value in their paid services. I don’t think that the company will be able to sustain the current trajectory without venture capital money, and I find scary the idea of relying on a VC-funded pseudo-bank for my own money.

Update (2019-03-27): just a few days after I wrote this blog post, I received two email from Revolut, with widely different content, that I think merit a bit of description, thus why this update.

The latest email is an announcement of new details (new sort code and account number) for their GBP accounts. This is effectively a change in intermediary bank that maintains the GBP account proxies for Revolut. Nothing particularly eventful in by itself, but there are a few notable things. The announcement is declared “great news” for their customers, but it also highlight yet another feature that high street banking would have, and Revolut lacks: redirections.

When you switch bank account with a high street bank, the bank will take care of moving standing orders, direct debits, automatic salary payments, and redirect any transfer to the old bank account to the new one. Revolut is instead telling all the customers that they have to deal with all the required changes of both payment and transfer. Not just that, but they don’t appear to guarantee any specific grace period in which both accounts would exist: they say that the new details will appear in the app before May 22nd, which is when the old account will stop working:

⚠️ Your old account details will stop working from the 22nd May 2019. 

Salaries and standing orders 

If you receive your salary into your Revolut account, you’ll need to send your new account details to your employer before the 22nd May. Again, we’ll let you know as soon as they arrive. 


For standing orders from your external bank to your Revolut account, you’ll need to update your bank with your new details before 22nd May. For recurring payments set up from your Revolut account to another bank, you don’t need to do anything. 

Revolut email arrived on 2019-03-27

To give you an idea of time frame involved, the company I work for freezes the salary payment details around the 5th of the month for payments on the 25th. This means that if the new details arrive after 5th of May, and you’re paid monthly, you may be unable to receive the salary. Hopefully, the old accounts would just reject the transfer, but even in that case, retrieving the missing salary can easily take two weeks, which for a number of people would be a significant risk.

For comparison, the previous email I received just twenty hours before, also from Revolut, had as subject «👕Should we release Revolut merch?». This is a company that just before announcing a significant disruption of service, that a high street bank would never subject their customers to, asks whether you would like to wear their brand around, making yourself not just a product, but a walking billboard.

Update 2019-01-04: see also the October update.

UK Banking, Attempt 3: Tesco Bank (and the Irish credit card)

It feels like most of what I end up writing nowadays is my misadventures across a wide range of financial service companies. But here we go (I promise I’ll go back writing about reverse engineering Really Soon Now™).

The last post on this topic was my rant, about how Fineco lacks some basic tools to be used as sole, or primary bank account in the UK. Hopefully they will address this soon, and a sane bank will be available in this country, but for now I had to find alternatives.

Since the various Fintech companies also don’t provide the features I needed, I found myself having to find a “high street bank”. And since my experience up to this point both with Barclays and NatWest was not particularly positive, I decided to look for a different option. Since I have been a mostly-happy customer of Tesco Bank for nearly four years, I decided to give their UK service a try.

At first it appeared to have an online sign-up flow that looked sweet for this kind of problem… except at the end of it, they told me to wait for them to ask me for paperwork to send them through. Turns out the request was for proof of identity (which needs to be certified) and proof of address (which needs to be in original) — the letter and form I could swear is the same that they sent me when I applied for the Irish credit card, except the information is now correct (in Ireland, the Garda will not certify a passport copy, though it appears the UK police forces would).

Let’s ignore the fact that by mailing me at that address, Tesco Bank provided their own proof of address, and let’s focus instead on the fact that they do not accept online print outs, despite almost every service (and, as I found out now, themselves) defaulting to paperless bills and statements. I actually have had a number of bills being mailed to me, including from Hounslow Council, so I have a wide range of choices of what to provide them, but as it turns out, I like a challenge and having some fun with corner cases (particularly as I already solved the immediate need for a bank account by the time I looked into this, but that’s a story for another day).

Here is a part of the story I have not told yet. When I moved to the UK I expected to have to close every account I had still in Ireland, both because Ulster Bank Private is a bloody expensive service, and because at least in Italy I was told I was not entitled to keep credit cards open after I left the country. So as soon as I was in working order over here, I switched over all the billings to Revolut. Unfortunately I couldn’t do that for at least three services (Online.net, Vodafone Italy and Wind/3 Italy) — in two cases because they insist they do not accept anything but Italian cards, while somehow still accepting Tesco Ireland cards.

While trying to figure out an ad-interim solution I got to find out that Tesco Bank has no problem with me still having the “Irish” credit card, and they even allowed me to change the address (and phone number) on file to my new London one. We had some snag regarding the SEPA direct debit, but once I pointed out that they were suggesting breaching the SEPA directives, all was good and indeed the card is debited to the EUR Fineco account.

This also means i get that card’s statements to my London address. So of course I ended up sending, to Tesco Bank, as proof of address… a Tesco Bank Ireland credit card statement. As a way of saying “Do you feel silly enough, now?” to whoever had to manually verify my address and send the paperwork back to me. Turns out it worked just fine, and I got not even a passive aggressive note about it.

Now let’s put aside the registration and let’s take a look at the services provided. Because if I have to rant, I would like at least to rant with some information to others to make up their own mind.

First off, as I said, the first part of the registration is online, after which they get in touch with you to send them the proofs they need. It’s very nice that during the whole time, they “keep in touch” by SMS: they remind you to send the paperwork back, they tell you that the account was open before you receive the snail mail, and so on.

I got a lot of correspondence from Tesco Bank: in addition to the request of proofs, and the proofs being mailed back, I received a notification about the account being opened, the debit card PIN, and a “temporary access number” to sign up online. The debit card arrived separately and through a signature-required delivery. This is a first for me in the UK, as most other cards just got sent through normal mail — except for Fineco, as they used Fedex, and they let me receive it directly at the office, despite it not being the proof of address I sent them.

Once signing up for the online banking, they ask you for an 8-digits security code, a long(er) password, and a selection of verbal question/answers, that are the usual terrible security (so as usual I’ve answered them at random and noted down what I told them the answers were). They allow you to choose your username, but they suggest it to stay the email address on file.

The login for the first time from a different computer is extremely awkward: it starts with two digits of the security code, followed by a SMS second factor authentication, followed by the password (not a subset thereof, so you can use a password manager easily for this one), all through different forms. The same happens for the Mobile Banking application (which is at least linked directly from their website, and very easy to install). The mobile banking login appears to work fairly reliably (and you’ll see on the next post why I call this out explicitly).

I set up the rent standing order on this account, and it was a straightforward and painless process, which is the same as a one-time transaction, except for saying “I want to repeat this every month” checkbox. All in all, it looks to me like it’s a saner UI than Barclays, and proper enough for the needs I have. I will report back if there is anything particularly different from this that I find over time, of course.