Full disclosure before we start on this one. Most of us
here are at Excel Currencies are ‘fans’ in some shape or form of Revolut.
Whether it be the app, the card, the marketing or the suite of offerings.
However, this blog is specifically about large overseas
payments and why Revolut probably isn’t your best choice for
moving large sums abroad.
Who are Revolut?
Simply put, Revolut are the jewel in the UK’s fintech
crown. They are a neobank and finance app like no other in the world and
next year, it’s likely they will reach full UK bank status after waiting
3-years to be awarded a UK banking license by the Bank of England.
Launched in 2015, the ‘unicorn’ firm boasts 1000 staff and
has over 9 million customers in the UK. It is currently valued at a
mind-blowing $45bn and recorded a £344m profit for 2023 with revenues at
£1.8bn. This all comes after only first turning a profit in 2022..
It’s range of products and services include –
·
Banking
·
Cards
·
Currency exchange
·
Budgeting
·
Savings
·
Insurances
·
Stock trading
·
Cryptocurrency
The concerning press coverage
On the surface, things look almost fairytale like for
Revolut. However, there has been a cost to the meteoric rise of the firm and
it’s people that have been made to suffer.
Revolut lead scam complaints
Complaints to the Financial Ombudsmen Service (FOS) about
UK banks are currently at a 10-year high (2023). 27,312 complaints were made
and worryingly, 50% of these complaints were in relation to APP fraud.
(Authorised Push Payment (APP) is a scam in
which people are tricked into authorising payments to a fraudster who is posing
as a genuine payee. This cost the UK consumer nearly £500m in 2023)
From these fraud related complaints, 3,458 were for
Revolut (25% of APP complaints). And this number was more than any other
bank or fintech, even though in terms of customer base, Revolut has less than
half of the major UK banks.
https://www.thebanker.com/Top-of-the-fraud-and-scam-complaints-list-Revolut-1721894444
This is unfortunately not a one-off either. Revolut had 1,930
complaints go to the FOS in 2022, five times that of its next rival
in the overseas payment space (another online DIY firm). And since its
inception in 2015, Revolut has prompted four times the number of complaints as
other FX providers COMBINED.
(Remember, these are complaints that reached the
FOS. These don’t include complaints made to Revolut that were either settled or
not pursued further by customers. We dread to think what this number could be.)
https://www.ft.com/content/da82bae4-5846-499d-9a9e-f6a429fa9528
There are numerous reports of customers not being allowed
to speak to a human when they have been scammed out of their money
(which you can read on review sites like TrustPilot) and the Telegraph reported
earlier in the year that 1,000 people may have lost a huge £34m through
Revolut.
https://www.telegraph.co.uk/money/banking/revolut-fraud-payout-row-leaves-1000-victims-in-limbo/
And if you didn’t know, the average time the
ombudsman takes to resolve a complaint..
A shocking 328 days.
Even Revolut’s own people are not
safe from the firms growth plans..
In 2022, there was a mass exodus of staff and
several key senior personnel resigned without a word as to why. Last year,
there were a string of reports on Revolut’s working environment.
Claims that staff were to achieve ‘perfection’ or get fired
and most were forced to do unpaid work or risk the same fate. A new division
was created at the firm to address criticism over its aggressive corporate
culture.
The wild west
Last year, Revolut failed to submit their accounts
on time for the second consecutive year. In fact, the firm filed 6-months after
deadline. And in 2020, the UK body that regulates auditors deemed the company’s
audit as “inadequate” and highlighted high risk of an undetected material
misstatement.
Finally, in a recent T&C’s email update, Revolut stated
it no longer needs ‘good reason’ to debank customers.
https://www.uktech.news/fintech/revolut-good-reason-debank-20240909
Is using Revolut a risk
worth taking for large overseas payments?
Well, even after reading the bad press we have provided on
this blog, that question is completely up to you to decide. After all, they are
cheap and easy to use. But are these selling points really what you need
anyway when moving large sums abroad? Let’s dive in deeper..
Beware the mistakes
Revolut offers a Do it Yourself (DIY)
service. This means;
·
Inputting the correct currencies you
wish to buy or sell
·
Inputting the correct amount of currency
you want to buy or sell
·
Inputting the correct account details
Excel Currencies does
the above on your behalf. But why does this matter I hear you say?
Well, most people we speak to have never sent a payment
abroad. Some have never sent a payment anywhere near the size they need to make
for the property purchase to anyone else before. There is no doubt it’s a daunting
task for the majority.
Because you are buying live from the market (like the stock
or commodities market), choosing the wrong currency and/or amount will cost
you. These are simple mistakes to make, especially when feeling stress
and pressure of performing the task.
We take these potential mistakes off the table and we
remove the stress and pressure of the task by doing them for you.
By using Revolut, YOU are liable for any
losses you incur from your trade mistakes. Revolut will not pick up any losses,
as it was you that made the mistake on their platform. Reversing your mistake
will take time too because of the lack of human contact support that Revolut
offers.
Revolut are also unable to identify whether or not you have
made a mistake and so it’s down to you to recognise when you have and by that
point, it could be a lot worse than it originally would have been..
Payments, payments, payments
An even bigger fear when making a payment by
yourself, is sending it to the wrong destination. Within the UK, Confirmation
of Payee (CoP) has helped hugely in recent years with fraudulent payments and
as a way of deterring general payment mistakes.
This added security on payments allows customers to match
account details with the right account name and is confirmed by your bank
before you process a payment. However, CoP is not available for overseas
transfers.
At Excel Currencies, we have added security features
that Revolut does not offer on large value transactions overseas, to help
minimise the chance of fraud occurring on your payment.
Also, if using Revolut, you are overseeing the
inputting of account details and Revolut are just processing your request. Here
at Excel Currencies, we have 3 team members that look over every single payment
with collective payments experience of at least 25-years.
If you have given us incorrect account details and we have
passed the added security feature, we can act instantly in recalling the funds.
It will be a ticketing system with Revolut and speed is of the essence
when a payment gets sent to the wrong place.
As-well-as your dedicated account manager, you will also be
assigned a dedicated support team member who will proactively work with
you until the funds have been returned. They will chase the corresponding bank and
update you whenever there is news to tell, in what can be a very unsettling
time.
More importantly, they will be available to speak with on
the phone at any time. Over at Revolut, it will be a mixture of a robot and
human interaction, primarily via their online chat or email. This will
no doubt lead to a slow, unpersonal and frustrating path.
AML & delays
Our industry is very heavily regulated by the FCA
and both Excel Currencies and Revolut are forced to abide by strict Anti-Money
Laundering (AML) procedures.
When it comes to large exchanges, we both must prove
what the transfer is for and what the source of funds are and have
documentation to support.
At Revolut, you will not know what exact documentation
will be required until you have loaded your payment. Compliance will email you usually
within 24-hours asking the necessary questions. Once you have supplied
the relevant documents, it can take up to 5-days for Revolut to give the
greenlight on the payment or not.
At Excel Currencies, we explain what is required as soon as
we have spoken to our customers and guide them through exactly what we need,
when and how to get it. 80% of the time we have the relevant documents
in place before any trade has been placed, to avoid any payment delays. Our way
is instant, painless and proactive.
Excel Currencies has been in business since 2004 and are fully authorised and regulated by the FCA. Customer funds are held in safeguarding accounts with tier 1 banks only. Excel Currencies use sophisticated anti-fraud measures to keep your money safe.
Price v Cost
Have you ever tried to save money by buying the cheaper
version of an item or service?
Did you notice that more often than not, the cheaper item
or service ended up costing you MORE in the long run via replacements,
repairs or add-ons, compared to the more expensive and higher quality item or
service?
To name a handful of things;
·
Clothes, furniture, vehicles, home repairs/improvements
etc
·
Flights, trains, holidays, hotels, solicitors
and so on..
A saying that we love here at Excel Currencies is by an
author named John Ruskin and was written over 150 years ago – “It is unwise
to pay too much, but it is far worse to pay too little”.
We liken this to the banks charging customers too much and Revolut
charging too little. The banks charge between 2%-3% on average to customers
moving large sums overseas, whereas Revolut charge 80% less than that.
Pay cheap, pay twice..
The ‘price v cost’ narrative is saying that something may
be the best price now, but how much will it cost you in the long run?
The cost will come in the form of primarily money
and/or time. Stress, anxiety and frustration etc are all by-products to losing
money and/or time.
Revolut have customers worldwide making transactions of all
sizes, for all kinds of reasons and also offer an overseas spending card (which
is very good). They have a gargantuan number of reviews, but 10% of them
are rated as 1*, most of which have something to do with a large
exchange.
If you think it’s expensive to
hire a professional, wait until you hire an amateur.
£5 trillion is traded daily on the
FX market, it is the biggest market in the world by some distance. This means
it is also very volatile because of the sheer number of players and amounts
involved.
Exchange rates change every 2-seconds with a daily average
swing of 1%. On average, a currency pair will move by 3% during
an overseas property buyers window.
On £200,000 to €, this is a potential profit or loss
situation of £6,000. Money (I’m sure you would agree) you could very
much use by upgrading your bathroom or kitchen, paying for removal and
solicitor fees, installing a swimming pool or even paying for a family holiday.
Choosing to work with Revolut on large exchanges instead of
Excel Currencies, means you are navigating this market alone and this is a
market that sees 81% of FX traders lose money on.
Many of these traders work for hedge funds and investment
banks which use state-of-the-art algorithmic technology and still they
get it wrong. So, what chance do you have really of timing your exchange right?
Minimising your risk.
Without a dedicated account manager at Revolut, how do you
know when is best to exchange your funds or do you just exchange when you are
ready or when the money is needed to be sent? This is risky business..
Also, how much time will you potentially waste
in getting to grips with the FX market, looking for trends, rate watching,
searching for reliable forecasts, hatching a plan etc?
At Excel Currencies, we take all of this away. Your
dedicated account manager will work with you to understand your risk appetite
and help create a plan on what to do within your timeframe based on market
trends, economist forecasts and what others in the industry are doing.
The trader working with you will have at least
15-years’ experience in the FX industry and they will explain the tools
and products available to help minimise your risk on the market. This could
add up to be a significant saving to your pocket.
Remember, exchange rates will likely move around 3%
during the time window of purchasing a property abroad, so risk management
should be the name of the game, and this is something that Revolut does not offer.
If you want to witness how powerful a Forward Contract can be, please use our currency risk calculator for free here -
https://team.excelcurrencies.com/forward-contract
To summarise, Revolut will offer a better exchange rate on the
day (price), but buying SPOT and flying solo is just like rolling
the dice on a large transfer (risky) and if something goes wrong, then
that’s unfortunately on you (transactional relationship).
More importantly, Revolut’s horrendous track record
for complaints, customers being scammed and lack of customer support may be
hard for most to ignore.
Excel Currencies offers a hands-on, proactive approach (human) and consultative service (cost). We specialise in large exchanges and overseas property sales for UK customers (experience). Plus, finding any bad press on us will be very hard to come by..
Find out how we can help you with a Forward Contract by calling us on 01322 221 121 or email us at info@excelcurrencies.com.
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