That’s hard to do. As far as I know, Europe has capped the interchange rate to 0.2% by law. For non European countries it varies between 1,5% and 2,0% which is good. I believe this European law is stupid…
American Express isn’t limited to the European interchange fee limit so it can have higher cashbacks but since American Express is closing it’s doors to the European Union… it’s over.
You won’t be seeing higher cashback than 0.3% and even that is too high…
Honestly, neither. If American Express can do 5% I’m sure Revolut could at least do 1% in Europe and 1.5% outside of Europe, with a much larger cap than £72 (or none at all)
AMEX doesn’t offer 5% cashback (it’s a special capped limited promo, pretty disappointing you’re using this as an argument), doesn’t stick with the 0.2/0.3% EU interchange fees, it costs money, it’s not accepted everywhere, it’s an elite card and doesn’t compete with Revolut at all.
Asking for 1% cashback without a cap means asking Revolut to lose even more money. You have no idea how business and interchange fees work.
It’s absolutely unacceptable for a card that’s meant to be so premium to cap things at the same time as offering ‘everything but mediocre’
Please give me an example of a Mastercard/VISA “premium card” which offers unlimited cashback. You’re asking Revolut to give away more than month Metal subscription when you spend 2000£ or more, while Metal money should pay a lot of other things in the plan.
You have no idea what you’re talking about. If you are sure this business can be sustainable, open your no profit company and disrupt the fintech world.
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As others have pointed out, Amex is exempt from the 0.3% (0.2% prepaid) interchange fee cap, so it is completely unfair to compare these. It really doesn’t matter if there’s a 5% promotion and for how long and whether it is capped and whatnot, it is just not applicable to the Revolut case at all.
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It is not stupid at all because online shops started to add the fee at the checkout (higher than the actual amount of course). So you bought something for €50 and they would add €2 credit card fee. Of which you then would get €0.5 - €1 cashback. This is now no longer possible which is great.
I recall it being a free account whereas Metal is paid. I’d be fine with roughly 1%, it was just to illustrate a point.
I also think its a pretty stupid law and I hope they get rid of the cap soon as most of the EU now uses card normally, it’d be hard for businesses to get rid of it.
Why are they closing their doors to one of the biggest markets on the planet?
It’s capped pretty high and for a limited time it is 5%. Granted it goes down after a while but its still higher than the 0.1% that Revolut offers (which isn’t even worth giving, imo)
That’s true, not refutable.
American Express don’t charge money for all cards (they have some credit cards that offer points) including the 5% to 0.5% one.
Most places I spend at accept it, it’ll be hit or miss. Revolut could issue it alongside their current offerings, like Diners Club do.
I would say a card that builds airport lounges into its offering as well as insurance and a concierge is meant to be elite.
With both I spend money, thus I look at what each offers.
They can subsidise it with credit, or they could cap it at over how much metal costs so at the very least the customer feels like they’re getting money out of it (without having to get cover for US healthcare to feel like they actually made their moneys worth)
I do know pretty well actually. In the European Union there is a cap of 0.2% interchange for consumer debit cards, 0.3% for credit cards. This doesn’t apply to Diner’s Club, American Express etc. It does however apply to Mastercard and Visa. Not sure about Maestro but as they’re a sub of Mastercard I imagine it does.
Yes they would lose money, but as they plan to become a bank I’m sure they could subsidise it with overdraft fees, loan fees etc
I’d prefer if you didn’t personally question my knowledge of things when you have no idea of what I do and do not know. Thanks.
Wouldn’t know one off the top of my head, but offering a cap half the price of metal gives one no incentive to pay for it. They can’t just spend a bunch of money and recover even 2/3 of the fee with the proposed cap.
The other things in the plan like what?
They still charge for cash withdrawals past a limit, which are offered for free by Starling and also by N26 (although 4.90£ a month fee)
They still charge 0.5% on weekends, pocketing anything extra, 1.5% on some currencies.
They still do credit of which makes a juicy cut, as credit is always the main money maker of a bank.
They still sell insurance of which they could take money from to subsidise it.
I know what I’m talking about and I’m saying ‘banks make lots of money, to replace banks you need to offer better, as in run on tighter margins (make less profit for the same customers)’
I’m not a former banker with a bunch of VC funds behind me.
It’s illegal to charge for card processing fees now, so it can be changed, no?
That’s interesting, how come this isn’t done in the US too? (Or is it?). Also, wouldn’t it be better to add a law where the online shops couldn’t legally charger more for card transfers?
Also, if I have a US based card that has a chargeback and buy in the EU do I still get the nice chargeback? (I assume not)
There are still processing fees (percentage by the acquirer, and a fixed amount by the PSP). But it is now capped for what are considered ordinary payment methods (Visa, Mastercard).
The idea behind the cap is to make common credit cards no more expensive for merchants than other methods of payment including cash (handling cash is not free, you have to bring it to the bank at the end of the day, need to manage change, security etc.). So, now that cards are no more expensive there is also no reason (and is therefore not allowed) to ask customers for credit card fees during checkout. In other words: these 0.2%/0.3% are not just arbitrary values but are part of consumer protection and are here to stay.
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DeXeD: Why are they closing their doors to one of the biggest markets on the planet?
Something about changing their business plan. My local bank PBZ said that my AMEX card will stop working and that I will receive a VISA replacement one.
Source: ICT Business | American Express Changing Their EU Business Model, Most Famous Cards Go Into History
And the thing is they are gonna pay Apple for every transaction made using Apple Pay some fee (%). So with this european cap I don’t think we will see bigger cashback. It would cost them more money than they get.
I’m owning the Barclays Platinum Double. The fee is 99 € per year, the first year is free.
What I get for my money:
- Travel insurance and medical travel insurance without deductible
- Full Rental car insurance while traveling if paid by the card, no deductible
- 5% cashback if the holiday trip is booked at their partners website
- no extra fees in foreign countries when using ATM or card usage
- no ATM limit at all
- up to 3 extra partner card doubles with all the insurances
- prior customer support
- assistance service
Revolut would cost me 167,88 € per year, but lower conditions. If you provide (nearly) the same like above, I would change for sure.
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You can’t charge the consumer for card processing though, is what I mean. So they wouldn’t be able to say ‘here’s a 2-3£ charge for card’
This is the case in the UK at least, my work used to charge 50p(55€cent or so) for card fees but that’s been removed as a result of the change in law.
As much as I’d like to see Revolut improve the cashback scheme and maybe offer other perks as well (I think the £72/€82 cap is perfectly fine, Metal would then effectively cost €53/year; with Apple Pay support this would be decent value), people should not forget about the exchange rate markup. The rate you get with your card can easily be 1-1.5% higher than Revolut’s, meaning 5’000 spent in foreign currencies adds another 50 - 75. Let’s say 2’000 in Europe and 3’000 overseas → another 30 that you’d lose relatively to the Metal card (current cashback scheme). Revolut Metal costs €135/year by the way. So, the actual costs would be Revolut Metal €105 vs your Baclays > €180.
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That’s what I’m saying. The point is that the “stupid law” (capped fees) is actually good because it also prevents shops from charging you extra. 1% cashback really makes no sense when you have to pay 2% first.
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I think a great addition to Revolut would be possibility of connecting other bank accounts through Open Banking/PSD2 api and having all that data available in Revolut app.
Something similar to budgeting only apps like Bankin’ or Curve.
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What about a free metal plan with or without cashback for people who spend more than 10k€ (or another limit) per year?
Or somethings like miles. More we use the revolut card more we earn advantages.
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That kind of advantages are going to be removed from all banks in EU because of capped interchange fees.
Moreover, if you top-up by card instead of bank transfers, Revolut has to pay more than it gains (pay interchange fees -> gain interchange fees but remove Mastercard fee and payment processor fee)
You’re wrong:
12x 13,99 € is 167,88 €!
Maybe you pay less, but for me it’s 13,99 € per month shown in the app:
revolut|241x500
I didn’t see any 1-1.5 fee when I withdrawal at the atm or paid. I compared it to the interbank rate. And if you need more than 600 €/£ per month, you have to add 2 %
Like I mentioned above, there is 5 % cashback on bookings at the partners website. If you book one trip for 2.000 € you will get 100 € back -> yearly fee is paid
I don’t need too much cash all the time, often just 200 € per month. But some months it can be more than 600 € and then I have to pay 2 % more on metal. I don’t even get it, why Revolut does set a limit. In Germany Revolut and every other bank has to pay for every withdrawal. They would do better to set a limit about the numbers of withdrawal, not the amount.
As you see, it’s dependent what you are using the card for. I was just showing what I get at competitors website and why I have chosen this offer. For me, the free version of Revolut is fine, but metal doesn’t fit to me.
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You’re misunderstanding me, it’s actually against the law to charge fees for card usage. So you could increase it to 5% and they still would either have to lose the revenue or just accept the payment and bite the bullet.
Revolut should adopt something like LinePay so they can up the interchange fees a bit 
Why does many bank char a card fees for stick the card into an ATM?
Its card usage too