Initial Thoughts on Revolut Metal?


#65

Let’s face it. People asking Revolut to offer higher cashback than 0.2/0.3% uncapped are suggesting Revolut should either add hidden fees everywhere, or exploit the poor and share the profit.


#66

I reckon Revolut could do 0.5% cashback, if you think they have 3 million customers, assuming only 2m use it and maybe 150k have metal, they have over 1.8m using the card and each time they use it 0.2% of that is going to Revolut.

Surely that could be used to subsidise it.


#67

Easily said. Not a very comprehensive analysis, though.

Every time someone tops up a Revolut account with a card, Revolut has to pay interchange. And since credit cards can’t have a fee anymore, 0.2% from interchange revenue could theoretically result in - 0.1% loss for every penny one spends. There’s a reason why Monzo said they can’t afford card top ups anymore.

Paybacks are an incentive to spend more with the card. If you’ve got a situation where a 0.5% needs to be subsidized, motivating customers to spend more would result in even higher subsidizations. That results in the opposite effect. It would make card payments more costly instead of generating more income. Think about it. For every cent they make from interchange, they would have to pay out 2.5 cents. Does not sound like a sustainable business plan to me.

There are too many unknowns about account costs and revenue to make a substantiated guess.


#68

Remove card top ups for countries with local account details. Increase the amount of local account details.


#69

This calculation did not take top up costs into account.

What incentive does Revolut have to motivate their Metal customers to spend more with the card when it results in a loss?

And I really hate the idea that a premium cashback program would be cross-subsidized by the “freemium” offer because it is not sustainable on its own. This is wrong on so many levels. The result would be that people with lower income pay more and subsidize a product that is marketed as a premium product. It’s typical for high street banks to have a strategy like this.

The argument often is that with wealthy customers, a bank earns more in interest. That is not the case with Revolut as long as the product is offered under an e-money license.


#70

Did it not?

They just acquired their banking licence and they should be trying to make more money, as a business. What’s wrong with them subsidising their Metal tier (the most expensive one they offer) with users that are on free tiers.

So will Revolut. They acquired a banking licence in Lithuania and will passport all across the EU in time and they’ll be applying for one in the UK.


#71

No, it did not. Simple math:

0.2 x 2.5 = 0.5


#72

Because it does not make much sense. What kind of business plan is it when not even the most expensive price plan can generate income? You avoided so far my question related to this: what incentive does Revolut have to motivate their Metal customers to spend more with the card when it results in a loss?

(It’s probably the other way round. Providing the basic service is only possible because Revolut is offering subscriptions like Premium and Metal. You can search for some of the press coverage around the time when Premium was introduced. The management discussed Revolut’s business plan in interviews and explained their strategy back then.)

It’s true, the situation will be different once they have loans as an additional revenue stream, but we were talking about the current situation and if 0.5 % would be viable now, not in future with hypothetical offerings.

In the current economical climate, banks do not make interest on customer’s funds just sitting there. You might find N26’s financial report for 2017 interesting. They offer overdrafts since they migrated to their banking license. It’s not a major revenue stream. 2017: N26 lent 9,57 Mio. in total, that means the average customer borrowed not even 14 EUR.


#73

I recently signed up to Metal, and loving it so far. I think the card is stunning when you see it in person, and has a really supreme premium feel about it. I’m now putting all my day to day spending through Revolut.

The customer support I can’t fault either and they’ve always been helpful with an extremely quick response time.


#74

Thanks for a great post.

I am well aware of the things you mention but still I feel that there are things that could be better with a premium offering, such as the Revolut Metal card, hence my two cents in the earlier post.


#75

Well, if you are aware of how things work, then maybe you could work that knowledge into your wish list. Realistic improvements are more likely to be implemented. For example, 0.1% cashback really is a joke, but 1% across the board with a card that did away with most hidden fees is simply unrealistic.

I almost wish Revolut had never introduced cashback. Instead they should have negotiated a number of really nice deals with partners who are prepared to bear some of the costs for more/new customers. Cashback, unfortunately, it either a fragile business model when it has to be subsidized, as the more a card is used, the more money they lose. Or it leaves a bad taste in the mouth when people realize that it’s mostly just marketing fluff (the current situation).


#76

I would be fine with 0.5% cashback subsidised from the free and Premium tiers no cashback.

I would also be fine with something like Avios being attached to the account. In fact I’d prefer something like this :thinking:


#77

Exactly. The problem is of course that in order to make their card useful in all countries they’d have to hire local partner managers who use their network and experience to make really valuable deals. But this is not going to happen as in this day and age a business that does not scale infinitely is not considered a good business. So, I fear instead they will hire 1-2 guys in the UK who will make a few phone calls to Poland, Belgium and Italy each year, which will result in: nothing. I hope I’m wrong…


#78

Is this true? The wordage isn’t great if it is then, the Metal site says:

One free LoungeKey Pass

A free Lounge Pass to use at over 1,000 airport lounges worldwide. Just book a pass, present your QR code and you’re in!

So that’s one free per year?? Damn, I read that as you only get one pass per visit, as in, I cannot take a guest in on my card. That is pretty tight, the Amex Gold gives 2 per year (Lounge Club), the N26 Metal also MasterCard includes no free visits.

Looking through the app it does look to be 1 free pass as a credit…

The N26 Metal comes with device protection, the Revolut is an additional fee. I am a new Revolut Metal customer. If I’m honest, if the site was clearer about only 1 included lounge visit per year, I’d still be cheaper using my Lounge Club membership and probably wouldn’t have signed up. Oh well.


#79

Unfortunately it is true, they basically open the door the to the LoungeKey club and the first visit is on them. But if you want to visit a lounge again, then you´ll have to pay.


#80

So what is so wrong with that ?! Your getting one access for FREE. Worldwide lounge access should remain exclusive and fit for purpose, otherwise what is the point.

If Revolut lounge access does not work for you, subscribe to a dedicated lounge access service with the money you save in Revolut exchange rate fees.


#81

This is a fair point.

Do most people even travel more than once or twice a year?


#82

I hear you Sal and respect your opinion.

However, the thread is about people with different opinions, mindsets and previous experience suggesting things that would make Metal worthwhile to them. I love Revolut myself but to me (with the above in mind) there is nothing at the moment (apart from the slick metal card itself) that would make me get Metal over the Premium offering. If Metal would be 25% more expensive a year and offer, say, unlimited lounge access then it would make sense to me.

As previously stated - there are plenty of cards that offer a couple of free visits every year or even full access - at less or similar cost. Will those cards do every single thing Revolut does? No. But we are here to give input and show the folks at Revolut how different people use their cards in real life. If we are all fan boys and say that everything is great and there is NOTHING you can do to make your product better - then this ultimately will hurt their business as they will be challenged by competitors.


#83

Most people typically won´t, no. But the people who would look into Revolut in the first place probably do. Or that is my belief at least.

With airline status memberships also tightening the screws (making it harder to get lounge access unless you fly a lot in premium cabins) there will be a growing number of regular travellers looking for other options (such as LoungeKey and Priority Pass). So the old philosophy of frequent travellers not needing these second rate lounges as they would have status with airlines and prefer access to these better lounges simply doesn´t hold up anymore.


#84

Because it’s not as good as the competition, after your ‘free’ pass, you’re then more expensive to purchase a pass via Revolut than going direct to the lounge.

This is of course my opinion. I get access to most of the same lounges with AMEX, I get 2 free passes and then it’s £15 per pass (Lounge Club), Revolut it’s 1 free pass and £25 per pass after, buying the pass from the lounge is, in my experience, less than £25.

Most, no, but this card isn’t aimed at most people. I usually aim to have at least a European trip every 2-3 months and maybe 1 large trip a year.

It’s worth noting if you travel to the US and use say American Airlines (get the BA Avios points…), even if you travel first class you do not get lounge access domestically, so these perks are even more useful.

As someone who took Metal purely for travel, I was actually going to bin it within the first 14 days, but the amount I would have to pay to downgrade was as much as the annual cost, so I’m keeping it for a year. The trip I just came back from I used my AMEX more in the end which makes it sting a bit more.

But if it’s working out for others, that’s cool too.