N26 raises $160M from Tencent and Allianz
techcrunch.com
techcrunch.com
My main wishlist for them:
- Allow access to more "raw" data (eg. log of failed payment attempts and why they failed, etc)
- Move support back into the mobile app. It used to be there, now it's a pain to find a phone/email to contact. (The web UI still has live chat)
- Don't expire fingerprint auth after 30 days if I'm actively using it.
- Clarify the differences between the business and personal accounts. It's in a weird state right now.
- More default categories, better tagging, etc. The aspect of tagging your transactions is super cool, it's just a bit hard to use right now.
I'm a huge fan though and 100% recommend it to anyone living in Europe. If someone wants an affiliate invite, shoot me an email (profile).
I would not recommend them to anyone, especially not as the main bank. Some issues I personally experienced:
- Double transaction entries (making monthly reports, subtotals, etc wrong).
- Failing to execute standing orders (not acceptable).
- Atrocious 9-5 support.
- Broken fingerprint login on certain android devices.
- Abysmal security [0]
- Couldn't log in few times (outside support hours), app/website unusable.
- A lot of other less severe bugs (categories being wrong in web and reports for example).
I've closed my account with then in October 2017, here's what happened since:
- I still get monthly reports about my closed accounts.
- I get various summaries e.g. the "Your 2017 with N26"
- They reported to SCHUFA (German credit rating agency) a month AFTER my account was closed that I opened an account with them (again).
- After I contact their legal department about a week ago and I demanded my data in accordance with German data protection laws, they started to apparently do something with my account, since now I get emails like that my phone has been unpaired and so on.
- For all the issues I've outlined above after closing my account I've tried contacting support. They ignore me after I clarify that my account should've been deleted.
This is just what I remember from the top of my head. I also paid for their premium N26 Black subscription.
[0]: https://media.ccc.de/v/33c3-7969-shut_up_and_take_my_money
At 24:57 in the talk, there is a specific section about "disclosure and conclusion", where the talker points out that N26 acted very professionally and that all issues have been solved. You can hardly say so about regular banks, which usually just ignore you or send you canned responses (I know, I tried to report some issues to two banks of mine, still unsolved after 3 years).
> In November 2016 customers were asked to transfer their accounts to N26 Bank's infrastructure. As a result, they would have to get a new account IBAN number, while the previous accounts held by Wirecard would be terminated.
The glorifying interview with the CTO about there rockstar techstack makes this all kind of silly https://community.risingstack.com/how-n26-built-a-modern-ban...
They go on about idempotency etc. but everyone complains about double or non-existing transactions.
For a startup that wants to disrupt banking, they have horrible UX (one example, when it was time to change creditcards because they changed the backend bank. A new card was sent and then the App asked for a 8 digit number on the card. I spent 2 days until I figured out, they want the number from the OLD card).
The advertise that everyone gets a small creditline with them (1000 eur, or so), but when I applied for that after 3 years being a customer I was denied completely (just wanted 200 Eur) for 3 Months or so.
The other points like security are already mentioned by the parent post.
Number26 was unable to provide actual, immutable account statements. They generated some PDFs for every month but they were often retroactively changed on certain events (e.g. if a merchant cleared a transaction more than seven days later). I was unable to get someone there to even recognize the problem.
Their terms of services stated that foreign currency transactions were converted using a data source made available to both parties. Naturally I asked for access to that data source. The one linked in the FAQ didn't match my actual transactions and was missing some currencies I used completely. Once again, support was unable to understand the problem at all and repeatly said that Number26 doesn't have access to the fx rates they use either. So much for the contract they themselve drafted.
I then closed my account shortly before the switchover to their own bank. The new terms said that transactions might not be processed on certain days announced on a paper at their Berlin HQ which I found pretty amusing (and have never seen in other terms). Hopefully that has changed now as well.
I don't use N26 because they don't have business accounts, but I would if they did.
Isn't Revolut a pre-paid debit card though? N26, in contrast, is a bank.
EDIT: oh, I see that "On 8 February 2017, Revolut launched UK current accounts, enabling its customers to get a personal IBAN" on their Wikipedia article.
- There is a standardized API for interfacing with banks, HBCI, which almost every other bank supports. Except N26, who stated that they have no plans to do so.
- Their app (which is the only real way to interact with the account - there's a web interface but it's clear that the app is meant to be the main way) used to be really bad. They gradually improved, to the point that I wasn't able to get an error message by just opening it, but the fact that that was a pleasant surprise is not a good sign.
- They repeatedly made misleading statements about the acceptance of their credit card (meaning that I'd be stranded at an airport had I not had another card), their support was generally slow.
- They lured users in with great conditions, then made them progressively worse.
The instant credit card usage notifications work well though, and since it's free... but I don't consider them good enough to use them as my main bank - I expect anything that goes even slightly outside of everyday mainstream transactions to go horribly wrong.
If they manage to gradually fix their issues, they could be great, but as of now, I feel like they're just another startup that wants to "disrupt".
Won’t that change when PSD2 comes into full enforcement?
I couldn’t close the account through their website or app but had to send a paper form to Germany!
I wouldn’t call that an “internet bank”.
This is a side effect of German banking regulation, not a fault of N26 (or any other Internet bank)
I only discovered that support was no longer available in the app when I actually _needed_ support, it was frustrating wasting time trying to find something I was sure I had seen in the app before.
So, I still use my N26 account, and appreciate it in many ways but, if they are capable of making bad decisions like that, there will obviously be more cost-cutting once they have solidified their position in the market. I cannot, in good faith, evangelize a service that may end up being as bad as the traditional banks.
Anyways I tried with two other banks first. One did not answer at all. A second one after 4 weeks or so just answered that they will not open an account for me, with no reason why. With N26 it was really fast and pleasant.
From my Polish bank I have Visa card and at least in Berlin it's not widely accepted. N26 gives Maestro card that is accepted a bit wider. However German EC card is a standard one that will be accepted everywhere where cards are accepted, while it's not the same with Maestro. However there are many many places that require cash. N26 gives 3 free withdrawals. My Polish bank gives me free withdrawals everywhere. That's why I still use it. Even more, in Poland cards are very widely accepted. Lately I could get by with just a phone in my pocket - Android pay is supported.
N26 has quite nice application, but it does not even begin to compare to my Polish bank. In Polish bank when I want to setup a transfer it gives ability to fill out everything based on history. In N26 I have to copy the amount and the message, it's tiresome.
Now I think about account in more traditional bank to get EC card and set up join account with my wife, that's also not possible in N26.
And you can have cheap transfers in EU between EUR accounts, even when the country does not use euro as the currency. It's around 1.something EUR.
They don;t offer EUR accounts, though? So, there is always currency exchange risk, when you travel in Europe?
EDIT: Nevermind, they do offer EUR, USD, CHF and GBP accounts.
I originally couldn't even request postident (verification by Deutsche Post at a local post office for those not familiar) - after an app update the option magically appeared to request postident.
What disappointed me was that I was on the phone with their customer support and apparently even if you have a residence ID (I'm assuming this should be considered a legal document proving your identity to the host nation since it's issued by them) that it would not allow me open an account. I really do hope they accept this legal form of identification for those with less luck.
I wouldn't say it's a racist thing, but it's certainly feels extremely personal when you can't open an account with an organization because of your nationality (or your national documents to be precise).
Other than that, I really like them, and they're very innovative for a bank, but that's a very low bar. Hopefully they'll step up their game with this funding. Revolut, by comparison, is much more usable, although there are things I don't like there as well.
The issue is that they don't have enough premium services to compensate for the "loss leader" like regular banks do. The hope from Tencent and Allianz is that they will add these now, and then move to great unit economics, but for now they are bleeding red ink.
While I don't expect them to sell mortgages anytime soon, they have many other ways to make profits. And if they manage to keep their footprint low compared to the way big traditional banks are moving online, I'm sure they'll be fine.
Or they could end up being acquired. (I hope they're big enough not to, but consolidation is a real issue in retail banking).
Salary etc. or 1000 EUR per month, with some other exceptions. Possibly country-specific.
1) Monitoring spending in real time or on a weekly basis is useful, and this seems to make it easier. But just a tool for downloading, viewing and analyzing the data from a regular credit card site would suffice, and can be self made.
2) It creates competition for the regular banks, so they potentially would stop being hogs about some of the fees.
But what else?
4) Concentrating only on one thing, they tend to get UI and UX much better than old-fashioned banks, who have to still serve clients who are skeptical about online banking and fill in paper-form money transfers and bring them to the bank in person.
2. The partner app you get is easy to use and offers full transparency about how many Euros in the account at that moment in time. This is stark contrast to some Irish banks who can't even give you a Bank statement on your account even if you walk in to the branch that holds your account. Which in this day and age is tantamount to being ridiculous.
3. The cards do look very nice.
4. The on boarding process is smooth and quick. Again in stark contras to some other banks who seem to want to stop you creating an account.
I know this doesn't sound like much of an advantage but it fills me with trust in the system and just feels very modern.
- No transaction fees and fair exchange rates as far as I know - Free - The instant (really instant, <5 sec) push notifications are nice
Over here I get notifications before I even pull the card out of the reader, and sometimes even before the PIN terminal itself displays "payment accepted".
Also, getting notifications for SEPA transfers that turn out to proceed timely is kind of refreshing when you come from traditional banks with which you feel the cogs of a 20th century mainframe mindset that refreshes accounts (on workdays only FFS!) by performing nightly COBOL/RPG-processed EDI between AS400-or-something machines.
Also also, authenticating using a password of arbitrary complexity of my choosing to log in to my bank instead of an incremental account number and stupid 6 digit PIN that I have to type on a "randomized virtual pinpad" both vulnerable to shoulder surfing and a disaster of accessibility.
Also also also, why the hell can old banks only show me the last month or three of transactions is beyond me in the day and age.
> Can someone list the advantages of using this
That's why I'll skip over the direct advantages and go straight to the indirect one being that N26 & al. may make old banks move their collective ass that is hopelessly stuck in the '90s.
Having said that, the limited monthly access to ATMs and their bad history (closing multiple peoples accounts with no warning) makes me hesitant to recommend them. I use them as a tool for online purchases and little more.
If you are in the US, the instant notification of credit card swiping is mostly useless in restaurants, since it doesn't show the tip until the transaction is actually processed a long time later. A few restaurants ask you to go in the back with them to type your pin, because they have a chip reader, but they don't yet have the wireless "gameboy" (it just occurred to me that pin+tip might be a tall order, the pin protects the amount too).
Where I live, the card machines show you the total and ask you to type in the final amount (including tip) before you enter your pin.
https://disruptive.asia/researcher-n26-security-gaps/
Their security seemed a bit lax back then
Maybe now that N26 is going to become a real bank supporting Apple Pay will become a possibility?
I don't want something with a high interest rate, or stock picker, just a way of putting a firewall between the cards and my cash.
Living and working in Asia for many years, I always sympathized with the difficulties my American expat friends had in trying to open any sort of local bank account at all, even a current account. Most banks say no the minute they hear you're a US citizen.
Not being able to open a bank account in the country in which you live has serious knock-on effects in terms of getting paid, or renting a home. I am eternally amazed that American citizens, who supposedly value personal freedom, put up with having one of the world's most aggressive tax regimes.
One reason I would never move my primary banking to a startup is customer service. There's absolutely no way that a startup is going to have 24/7 online/phone support like the big banks do.
All other banks require either > 30€/year fee for the card, or > X€/month income, or > X€/month spending.
Even the Amazon credit card has a 60€/year fee.
EDIT: Regarding the comments suggesting dozens of banks – they all have some conditions. You can’t open an account that only holds a balance for a few days per year, and is only ever used to pay e.g. Namecheap or the Google Play developer fee. Most people don’t want or need a CC in daily life, only to interact with shitty startups or US companies that assume everyone has a CC.
I bet they’ll either close your account, or, if you tell them ahead of time, never even allow you to open it in the first place.
And why the heck would you tell them ahead of time? Of course they will consider that then.
I think Cap 1 is completely free with no minimum balance needed.
Probably the best thing about US banks though is the insanely generous credit card bonuses...I've been churning credit cards for years and have taken many free flights including int'l first/biz and free hotel stays solely on bank credit card bonuses.
[0]: https://www.comdirect.de/konto/girokonto.html and https://www.dkb.de/privatkunden/dkb_cash/
I tried with Commerzbank, Comdirekt, Postbank, DKB, ING-Diba, Hanseaticbank, Wüstenrot, and a bunch more.
Every bank required either some income, or that I pay. I’ve been in bank branches or called their sales every time.
You always say "it’s technically possible", but that doesn’t change the fact that these banks all said they couldn’t offer it.
The fact is, N26 is the only bank that agreed to open an account with me, and offer me a CC, where I hold 0.00€ balance and transfer about 25€ via CC per year.
But no bank agrees to open an account if I am not going to hold any balance, and only use it for one or two transactions of a few euros per year.
I only need a CC for a handful of shitty US services (namecheap, Google Play developers, etc) that do not take SEPA payments, everything else, including my servers, I run via SEPA Lastschrift.
If I have to lie to get an account, it’s not without conditions.
You can get the CC for free if you are in high school, but if you’re above 18 it’s 39.90€ per year.
https://www.zellepay.com/participating-banks-and-credit-unio...
Which is the US banks' answer to Venmo, Square Cash, PayPal, etc that have offered such a thing nearly worldwide for 20 years.
I've had no problems. But why do they have the "Statistics" button on their website if I couldn't use it since I registered???