An application and a mastercard – that's all the German startup N26 needs for banking. The Berlin-based fintech company, which announces the abolition of hidden fees, has announced the entry into the Swiss market for 2019. This reports the Basler Zeitung.
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The N26's offer is likely to interest young people who travel a lot, suspected Sandro Graf, professor of Customer Experience Management at the University of Applied Sciences in Zurich. The affinity for such new offers presupposes a similar willingness to take risks, similar to mobile payments, which is found particularly with young men with good education and above average income. "If you've saved half a million, you probably will not want to go into an account with a starting bank," says Graf to 20 minutes.
If the N26 will change the offer in Switzerland, the company does not respond to a request for 20 minutes. In these points the existing offer of the Handy Bank in particular stands out:
The bank is almost completely in the application. From the opening to the network everything is aimed at the smartphone. "New banks like the N26 have the advantage of designing the application and the online appearance from scratch," Graf says in 20 minutes. In contrast, the application interface of many established providers is outdated. With the opening of the account you can feel the advantage of the N26: It happens directly in the application or in the browser and lasts around two minutes, if you already know the conditions of use. Although you can also open an account with the large Swiss banks via application or browser. But the process is usually a little more complicated than with the N26. At Credit Suisse and UBS, for example, you need to verify yourself by email or SMS while the account is being opened. Such an interruption does not exist with the N26.
According to N26, customers can pay for free with the Mastercard – in any currency. This is rare in the financial world: most banks charge a premium if a customer wants to pay in foreign currencies. According to the UBS price list, for transactions below 100,000 francs, this rate ranges from 1.7 to 3.6%, depending on the currency. For example, if you need $ 500, you will have to pay about 8.45 more francs.
Another rate that the N26 loses compared to many traditional banks is that when withdrawing money into the machine. The bank promises free local currency payments to all ATMs that accept Mastercard. With the exception of the UK, the currency is the euro in all countries where the N26 is currently active. However, if Swiss customers could get only free francs instead of euros, the benefits would be quite small: most ATMs abroad do not spend Swiss francs anyway. And domestically, Mastercard purchases are generally free at established banks.
According to Graf, the N26 has the advantage of offering a new experience in the banking sector. For many consumers, this may be a reason to try the offer – especially since it costs nothing. However, established institutions do not have to worry about this: "Most consumers usually stick to what they know a long time ago," says Graf. In the medium term, however, traditional banks would have to think about how to make their offer interesting to clients hungry for innovation.
The bank's basic offer is free and already includes the N26 MasterCard. But the company also offers a payment model called N26 Black. The cost in Europe is currently 9.90 euros and allows free withdrawals around the world, regardless of the currency. There is also an Allianz insurance package. Includes travel insurance for medical emergencies and extreme flight delays. A theft insurance up to four hours after withdrawal of cash at the ATM is part of the package. In Germany, the N26 still offers the metal package for 16.90 euros. Also includes personal care and special partner offers.
The bank, founded in 2013, is still young and active only in Europe. However, fintech's company already has a market value of 2.7 billion francs. In comparison, the market capitalization of the Swiss investment bank Vontobel is CHF 3.3 billion. Swiss dog UBS (52 billion Swiss francs) and Credit Suisse (30.9 billion Swiss francs) N26 have not yet been approached.