Set your fees as you please but making it sound as if not getting by on €200 per month were somehow “unfair” (to whom? Revolut? other customers? children starving in Japan?) is biting the hand that feeds you and hardly the way to go linguistically.
The more I withdraw, the more you get paid, so why do you have to make me feel I am breaking some sort of “policy?”
Perhaps the name made more sense originally when the amount was higher but it no longer does, so how about just calling it what it is, e.g. “free withdrawal limit”, “cash allowance” or some other neutral name: practically anything would be better than the current “fair usage.”
“Fair usage” originates from telco-speak, where it was coined as a passive-agressive weapon against customers who had the temerity to actually use their “unlimited” data services as advertised.
It’s a fundamentally duplicitous term but at least in its original context it can be claimed that excess usage by some customers negatively impacts others, which is hardly the situation here. When I keep making further withdrawals and paying the 2% commission for this privilege, it does not impact anyone except perhaps other prospective users of the same ATM should it run out of cash, while Revolut actually benefits.
ATM fees have to be paid by the retail banks who issue the credit/debit cards when you withdraw from the ATM.
The retail banks only get a fee when you use the card in a transaction at a payment terminal.
Fair usage implies that it is a reasonable limit, in the sense that the retail bank will have to bear the cost of a customer using the ATM. An excessive amount of withdrawing would lead to disproportionate costs.
The main reason why the main retail banks (at least in the UK) appear to not have this limit, is because they either own the ATM machines themselves, or they subsidise the current account and recoup this via higher fees for currency accounts (Poor FX rate+commission) and other retail financial products.
@capital I am not saying ATM withdrawals should be free, only that the free withdrawal limit should not be called “fair usage,” which it is not. It is essentially a linguistic argument.
In the above sentence I am referring to a situation in which the free withdrawal allowance of €200 has been exceeded. Revolut gets paid 2% of what I withdraw, which covers any expenses they incur and most likely provides some surplus. If it were not obvious in the original context I hope it is now.
What you wrote is essentially correct. I do not disagree. But what does it have to do with what I wrote?
The post seems to be a slight overreaction to the labelling.
‘Fair usage’ seems to be an appropriate label for this usage restriction.
It is fair, in the sense that the retail bank is subsidising the fee incurred when a customer uses the ATM, and therefore the usage should not be disproportionate (and this is in addition to other services, such as FX conversions.).
If a single user is using the ATM facility excessively, then it’ll reduce the ability of Revolut (or any other tech retail challenger bank.) to serve the other customers due to the high costs involved. Revolut would have to postpone investment plans for new features, or the maintenance of existing functions, in order to cater to the ‘high usage’ users. Therefore, it seems suitable to use the label of ‘fair’, since the monthly limit is to make it fair for every customer.
It’s exaggerated for the purpose of illustration. In the interest of full disclosure, “children starving in Japan” is not a reference to any actually observed phenomenon either.
This phrase does not belong here at all, in the context of a business transaction both parties have elected to enter. Taking advantage of an offer voluntarily extended by the other party to its fullest cannot be construed as “unfair.” It follows from the very fact the offer has been made in the first place that the offeror views it as beneficial to their business, and thus, “fair.”
As I am not a Revolut shareholder, whatever they choose to subsidize or not is none of my concern, although I would be inclined to give them the benefit of the doubt and assume they know what they’re doing.
I evaluate the offer that has been extended to me and decide whether to take it or leave it, and the only thing that could be deemed not “fair” here is if the terms of the said offer are being changed unilaterally and without notice, which, as a matter of fact, seems to be happening now, but I digress.
On the other hand, nobody would apply for and keep topping up a card that could not be used to withdraw cash, especially if said card had an upfront fee of €6/€20.
Neither of us has any deep insight into Revolut’s business model, so we can only speculate but let’s not perpetuate the myth of poor Revolut and evil customers looking to impoverish it further through the means of incessant, “unfair” ATM withdrawals.
The 2% commission on ATM withdrawals is likely rounded up very generously so as to cover the cost of even the most expensive ATM operators worldwide. It can be reasonably assumed that at least 50% of all ATM withdrawals cost Revolut less than 1% while the other 1% is a pure profit. Revolut is also free to negotiate better deals with any ATM networks where it sees significant usage and/or where the costs soar.
The purpose of the ATM fee might actually be to incentivize users towards cashless purchases, where Revolut gets up to ca. 3% of the amount of every transaction.
Besides, growing the user base is the only way to go for a start-up company, even if it initially incurs some losses. Amazon did not grow to its current size by charging 2% for shipping (and a further 1.5% on the weekends).
At the same time, the money deposits serve as a perpetual, interest-free loan to the company, while the endgame is most likely to monetize the financial data collected from users, at which point, with enough momentum, Revolut could become nominally “free” like Gmail.
Meanwhile, if profitability were an issue, there are lots of other options on the table, such as relocating the headquarters from central London, for instance. But realistically, I don’t think there’s a problem here. If Revolut fails it will not be due to excessive ATM usage but arrogance towards the users.
Overreaction, in relation to the actual raising of the issue (Feeling slighted due to the labelling of the monthly usage cap as ‘fair’.), and not your examples.
In both commercial and business-to-consumer relations, the contract will typically set out the extent of the obligations and services proffered.
The zero-fee cap for ATM withdrawals has been set out, and any further withdrawals beyond that is subject to fees.
‘Fair usage’ is used to designate the zero-fee cap, but it does not necessarily mean that any further withdrawals is ‘unfair’.
It would be fair therefore to pass on the fees in the case of further withdrawals (due to the cost of providing ATM withdrawal services due to the fees charged by the ATM providers.).
They choose to subsidise it because it is a relatively essential feature for any retail bank. But at the same time, caps have to be made (and fees will have to be passed on for any excessive use.) in order to allow the business to maintain an adequate level of service for every customer.
Terms and conditions for contractual relations are altered from time to time. e.g. The pop-up in the iOS App Store requesting your agreement to the latest T&Cs.
ATM withdrawal is not a card that ‘could not be used to withdraw cash’. There are monthly usage limits, but it would be a significant exaggeration to categorise a card that cannot be used with the ATM.
A business is not a charity. Much like how it is within the customer’s power to move providers, a business is not mandated by any regulatory authority or the state to provide services at a significant loss.
Revolut appears to have deemed ATM withdrawal an essential feature, but at the same time, to prevent excessive costs spiraling, a cap has been instated for zero-fee withdrawals.
Further withdrawals is possible, but it will be attached to the requisite fee.
If you look at the terms & conditions of every major successful consumer-facing enterprise, there will tend to be limitations on what a customer can and cannot do.
Such limitations will include excessive usage that may lead to significant costs or damage to the network.
OneDrive’s a fun example. A small demographic using 75 TB of storage.
There is a difference between smart losses, and unwise losses. The former as investment or for marketing purposes, and the latter, causing damage to the financial position of the company.
Offering unlimited usage with no limitations, in any business, is not a good idea in any industry.
A section of users overutilising a capital intensive part of the business would prevent the business from making further investments or spending money on marketing and expansion.
Amazon was public when they were able to offer programmes such as Prime, which significantly subsidises the cost of shipping.
Bezos made a decent amount of money whilst at D. E. Shaw, but I’m sceptical that he would have fancied utilising all his capital for a small section of his customers (rather than reaching a significantly larger user base.).
Whilst we’re on Amazon, even at Amazon, ‘unlimited’ is not without restrictions.
Revolut is not a traditional (UK) retail bank, where they are allowed to use customer money and allocate that for business loans.
This is analogous of a trust law relationship, rather than a principal–agent relationship.
The aim is to prevent costs spinning out of control due to excessive usage of a capital intensive feature.
The zero-fee monthly cap is a balancing act: On the one hand, the ATM service can be used by customers. On the other hand, to ensure that this service provision does not result in a black hole in the balance sheet, any further usage above the cap will lead to a fee being passed on.
The global financial regulation regime does not see too kindly to banks selling the data and details of customers to third-parties.
Location of a financial services business in London is an advantage, mainly due to the advantages of London. As one of the three international financial capitals of the world, the surrounding ecosystem (Corporate lawyers, accounting firms, management consultants, other financial services institutions, close proximity to the regulators, …) is advantageous.
Even then, the ‘saved’ money on rent from decamping to Durham still would not cover the unlimited provisions of fee-free ATM withdrawals to every single user.