UK fintech Revolut brings new money app down under

UK fintech Revolut brings new money app down under

UK-based Revolut has rolled out a money app in the growing Australian fintech market, which brings together budget management and fee-free money transfers in one app.

The mobile wallet, dubbed as a “financial super app”, allows users to manage their funds digitally, as well as send and spend money around the world.

The fintech company, which has a waitlist of 30,000 Australians, has been active down under since mid-2019 through a beta trial among limited customers. 

Revolut secured an Australian Financial Services Licence in late April from the Australian Securities and Investments Commission, but it is technically not a bank, which means any funds deposited with Revolut won’t accrue interest.

Anyone can sign up to Revolut for free through a standard plan, but extra features and perks will be available for those on premium and “metal” plans, which will set customers back a monthly fee of $11 and $30 respectively.

Some of the main things the Revolut app can do include:

  • Store, transfer and exchange money to and from overseas in 27 currencies fee-free.
  • Transfer money and split bills with friends and family instantly, locally and internationally.
  • Set budgets and track spending with in-app analytics.
  • Create “vaults”, which users can contribute to individually or with friends and family. Users can also round up spare change from what they spent on their Revolut card into their vaults.
  • Set up one-use Visa virtual cards for online shopping, which generate new details each time a transaction is made online for extra security.
  • Withdraw cash from ATMs fee-free (monthly limits apply).
  • Supports Apple and Google Pay.
  • For “metal” users – up to 1% cashback outside Australia and 0.1% cashback within Australia on card payments.

What money management could look like in the future 

Revolut Australia’s chief executive officer Matt Baxby said it makes sense for most Australians, particularly millennials, to manage their finances using their mobile phones.

“Revolut is building towards a financial SuperApp that enables Australians to truly take control of their finances in one place,” he said.

He pointed out that Aussies shouldn’t have to pay unnecessary fees to send money abroad.

“When it comes to exchanging and sending money around the world, Australians have drawn the short straw for far too long and pay some of the world’s highest fees for sending money overseas. As the world becomes more connected, there’s no reason our money shouldn’t be too.”

Mr Baxby added that more features are on the cards for the Revolut app.

“Our plan is to rapidly introduce a range of new features, such as simple access to holding and exchanging cryptocurrencies, commodities and fractional ownership of US stocks, as well as a rewards program to save money on day-to-day purchases, and ways for customers to easily give back to their communities,” he said.

Innovation is “good news” for the banking and finance sector

Sally Tindall, research director at RateCity, said competition from fintech in general could be beneficial for the banking and finance sector.

“Fintechs like Revolut will help drive innovation in a sector traditionally dominated by big banks with lethargic legacy systems. It’s good news for the sector and good news for consumers who will ultimately benefit from greater innovation in finance,” she said.

Ms Tindall noted that the digital wallet app is “limited” in what it can do at this stage.

“Revolut hasn’t got all pistons firing yet. It will need a banking licence in order to properly compete in this market, and ideally a competitive savings rate, especially if it’s looking to be a one-stop-shop for young Australians,” she said.

While Revolut is largely being marketed to mobile-savvy millenials, Ms Tindall believed it was unlikely that the fintech would be able to gain significant market share from the big banks.

“Revolut is targeting younger Australians who want to manage their money entirely from their mobile phones, quickly, simply, and from the one app,” she said.

“It’s hard to see fintechs like Revolut turfing the entrenched incumbents any time soon, but it is likely to catch the attention of younger generations, especially if it can continue to expand its service offering.

“The success of the platform over in the UK gives it credibility, however it will probably have to tough it out through COVID before making inroads in the Australian market.”

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Learn more about bank accounts

Can a debt collector garnish my bank account?

A debt collector can garnish your bank account, but only with a court order. This drastic action is usually taken only if you’ve ignored several notices asking you to pay the debt.

If this happens, there is nothing you can do to stop it other than immediately pay back your what you owe in full or make arrangements to pay it off in installments.

Once a garnishee order is issued, your bank will put a freeze on your account as it processes the order. This usually takes two to three days and you won’t be able to access any of your money during this time.

If you have Centrelink payments, they may be protected, depending on what the court order says.

How do you open a bank account in Australia?

Opening a bank account in Australia is usually a straightforward process. Some banks give you the option of opening an account online, while others require you to visit a branch.

Different bank accounts offer different features, so it’s best to compare your options to find one that suits you.

All banks require you to pass an identity check to open a bank account. Australia uses the 100-point identification system, which means you’ll need to show a number of forms of ID that, together, add up to 100 points.

Common ID types include a driver’s licence, passport, Australian visa in a foreign passport, and Australian Medicare card. You’ll find out what types of ID are accepted when you go through the sign-up process online or at a branch.

Once your account is open, you’ll be given or sent a debit card that you can use to make purchases and withdraw money from your account.

Can Centrelink access your bank account?

Yes, Centrelink can access your bank account, but only if you give them a reason to. Centrelink uses data-matching software with other federal government agencies to help it crack down on welfare cheats.

This is why it’s important to give true and matching information to all government agencies.

For example, if you report to Centrelink your annual income is $25,000, but at tax time you report your income as $50,000 with the ATO, it’s likely you’ll be ‘red flagged’.

At this point, Centrelink can legally request that your bank hand over your personal bank account details, to review your finances.

In most cases, Centrelink does not have the authority to take money out of your account. You will usually be given written notice to repay the debt.

However, Centrelink can also reduce your benefits until you’ve paid back what you owe. In extreme cases, Centrelink can garnish your wages and assets (including money in your bank account) until your debt is repaid.

Can the government take your money from your bank account?

There are some instances when the government can take money from your bank account. This generally occurs in situations where you have an outstanding government debt.

Before it can take money from your bank account, the government authority owed money would first need to issue a garnishee notice. 

A garnishee notice is issued by the government agency (such as Centrelink or the ATO) to a third party that holds money for you or owes you money.

To take money from your bank account, your bank would be issued with the garnishee notice requiring it to pay ‘your money’ to the requesting agency to satisfy the debt.

Are bank accounts frozen when someone dies?

Yes, Australian bank accounts are frozen when someone dies. If you want to close the account of somebody who has died, you might have to provide proof of death and a copy of the will. You might also have to prove your relationship to the deceased person.

If you have a joint bank account with somebody who has died, you will generally be entitled to all the money in the account. Again, you might have to provide proof of death if you want to change the bank account from a joint account to a one-person account.

Which bank is best for business accounts?

Unfortunately, there’s no definitive answer to the question of which bank is best for business accounts. That’s because ‘best’ will differ from customer to customer, depending on their unique circumstances. These include not only your company’s financial position, but also its size, its age and the sector in which it operates. Another factor to consider is what features you want in a bank account. Your business may require different features than another business; and your business may require different features tomorrow than it does today.

The best thing to do is to thoroughly research the market before opening a business account. And when you do open an account, you should reassess your options every year or two, because the market moves quickly. A particular bank might offer the best account today, but be surpassed by one or several rivals tomorrow.

Can I close a bank account with pending transactions?

You can close a bank account with pending transactions. But after the account is closed, any incoming transactions will be declined by your (old) bank.

The best way to ensure this doesn’t occur is to either wait to close your account until all pending transactions are complete, or contact the creditor and supply them with alternate bank details.

If you’re unsure whether you have any scheduled transactions, you can speak to a banking representative over the phone or via online support.

In most cases, your bank withholds the amount owing for pending transactions (such as online purchases).

Because the pending amount is deducted from your bank balance, you can close your bank account and the purchase will be honoured.

Can I open bank accounts for my children?

A common question for new parents is, ‘Can I open a bank account for my child?’

The short answer is yes – as a parent you can open a bank account for your child.

Once you’ve compared your options and found a bank account that suits your needs, the process is relatively simple.

As the bank account is for your child, you’ll need to provide some documentation such as proof of ID, including your tax file number.

You will also need a copy of your child’s birth certificate, and in some cases you may also need to sign a guarantee of indemnity.

Depending on the bank and whether you’re an existing customer, you may be able to open a bank account for your child online. However, you may still need to go into a branch to prove your identity.

Can I close my bank account over the phone?

In most cases, you can close a personal or business bank account over the phone. In fact, this is the best way to ensure you’ve closed an account properly.

By speaking to a banking representative, you can capture and close out any pending transactions, or interest owing/payable on the account being closed.

In the instance where the account is a joint account, or you have multiple bank accounts you want to close, your bank may send you a form that you need to fill out and return.

Either way, you would be advised over the phone of the steps you need to take. Calling your bank ahead of closing an account is often a smart course of action.

Can I find my bank account number online?

Yes, you can find your bank account number by logging into your online banking and clicking on the relevant account.

Can I link a bank account to Paypal?

Paypal is a safe and convenient way to pay online without the need to share your financial details. You can send and receive money or accept credit and debit cards as a seller using Paypal.

It’s easy to link your bank account to a Paypal account and start making transactions within minutes.

To start, you first need a Paypal account (it’s free to join). When setting up your Paypal account, you will be prompted to link a credit card or bank account (or both if you wish).

PayPal works without a balance; you can use Paypal to shop or send money when your balance is zero.

When your Paypal balance is zero, Paypal will ask you to choose your preferred payment method at the checkout.

This could be either your linked bank account or credit card. Your bank details can be updated if you change banks or credit cards.

Can debt collectors take money out of your bank account?

Many people find themselves struggling to cope with debt at one time or another. In these cases, a debt collector could contact you to demand payment for a debt, to explain the consequences of you failing to pay a debt, or to organise alternative payment arrangements.

If you’re contacted by a debt collector, you may be wondering what their rights are and whether they can take money out of your bank account.

Creditors cannot access money in your bank account unless a court order (also known as a ‘garnishee order’) is made to allow creditors to recover debt by taking money from your bank account or salary.

If this happens, the creditor can take money out of your bank account unless you pay the debt in full or make an alternative payment arrangement such as paying in instalments through the court.

Can you deposit money into somebody else's bank account?

One of the easiest banking tasks in the world is depositing money. You can even deposit money into someone else’s bank account if you wish.

The basic information you need to deposit money into a third-party bank account is:

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