Question Wise (Revolut) Whats the benefit/cons? Should I have one?

[theviewer1985]

Hey

So i am seeing so many people on here talking about Wise and Revolut and its making me wonder what their benefits are and if I'm missing a serious trick here.

If you had to pick the top pros and cons, what would they be? For both business accounts and personal accounts

I had a thought yesterday when hearing about moving to Cyprus or Romania - both countries saying I will have problems opening a business bank account due to the income being "OnlyFans". And also getting quotes to open a business account being like 600+ euros. This made me wonder, can't I just open a Wise business account myself? Or am I oversimplifying it?

Plus, i'd get the added benefit of not having my business bank in the same country as the business, which I'm sure comes with some privacy benefits.

Same goes for a personal bank. Can't I just have a wise personal account to live abroad with? Or do VISAs tend to require a local bank...

Cheers

 

[Sols]

If you had to pick the top pros and cons, what would they be? For both business accounts and personal accounts

There is not much difference between them if all you want is multi-currency banking and low cost. You can find complaints about both, for the same things.

Some people prefer Wise because of their greater financial stability, having profitable several years in a row, whereas Revolut has been running at a loss until their latest financial results (which were delayed by months and came with caveats from the auditor) finally showed profit.

I had a thought yesterday when hearing about moving to Cyprus or Romania - both countries saying I will have problems opening a business bank account due to the income being "OnlyFans". And also getting quotes to open a business account being like 600+ euros. This made me wonder, can't I just open a Wise business account myself? Or am I oversimplifying it?

Wise and Revolut don't accept account holders that receive payments from OnlyFans, for example.

One of the reasons Wise and Revolut are so cheap, so popular, and so good is that they have a low risk appetite. That makes it safe and easy for other financial institutions to offer their services to Wise and Revolut, and do so at competitive rates.

Plus, i'd get the added benefit of not having my business bank in the same country as the business, which I'm sure comes with some privacy benefits.

Not really. CRS will eventually catch up to Revolut and Wise worldwide.

Same goes for a personal bank. Can't I just have a wise personal account to live abroad with? Or do VISAs tend to require a local bank...

With limitations. Wise and Revolut aren't available in every country, and services offered may vary depending on where you live.

 

[12345]

My experience with business account - For US LLC Wise is much easier to onboard with compared to revolut
Revolut has a bank license while Wise doesn't so if you are hoping for non CRS it's better to choose Wise
From my experience Wise should ask for docs less often than Revolut
In general I much prefer Wise thanks

 

[Forester]

There is not much difference between them if all you want is multi-currency banking and low cost. You can find complaints about both, for the same things.

With all due respect, @Sols, I see the fact that Revolut possess a banking licence whereas Wise does not as a remarkable difference.
Having said that: I consider Revolut as well as Wise usable/recommendable only for a really limited set of use-cases. Both are known to have one pitfall: Closing the (especially business) accounts without any warning or notice, without any reasonable explanation and freezing the cash for undefined time. There is really a very remarkable number of cases where their AI machine just makes a false deduction / misinterprets data (or/and some poorly paid trained monkey at the first line of compliance departement does the same); and the dispute takes eons. Yes, AFAIK, nobody lost the money, finally they return it to the owner but even freezing your cash for some months can ruin your life and/or business perfectly. Of course, it can happen with another EMI, too; but with Revolut/Wise it is IMO quite frequent. (Yes, I understand that a big, even perhaps major part of horror stories that you can read here and elsewhere is de facto concerning an account misuse or abuse but it is not always so.)
I guess that the core problem there is that they are
– too big (and probably underpowered in resources) to handle all the agenda properly;
– too known not to attract very different people, sometimes definitely with really shady intentions...
As a result, you can simply have a bad luck quite often...
OK, they are not second to evil but definitely not sufficiently reliable – and there is a lot of another (better) EMIs or neobanks...
Perhaps the only acceptable use-cases for Revolut/Wise are if you work as a porter, pay for your groceries and from time to time send some amount to your parents somewhere, or if you have a grocery shop and pay to local farmers.

Otherwise I agree with all the rest of @Sols's post...

 

[Sols]

With all due respect, @Sols, I see the fact that Revolut possess a banking licence whereas Wise does not as a remarkable difference.

What's the advantage of a banking license over an EMI license? Are you going to get a mortgage or invest in a pension fund with Revolut?

 

[Forester]

What's the advantage of a banking license over an EMI license? Are you going to get a mortgage or invest in a pension fund with Revolut?

Of course not – and I guess nobody is.
Nevertheless
– from what I heard (just rumours, I did not checked it as it was of no interest for me), Revolut really prepares (have prepared?) some small personal loans, that can be interesting for someone.
[ @Sols: I guess that all below is well known to you. So just to answer the question ]
– In some coutries there are better options for an ADR/settlement with banks; banks underlie to a special institution whereas EMIs just under an institution for general consumer protection that has not so big power.
– Similarly, in many countries the regulatory supervision over banks is remarkably more tough than over EMIs. It has both pros and cons (e.g a hypothetical greater security against more annoying KYC/AML procedures...)
– In many countries (not everywhere) the bank deposits are guaranteed (usually by the state) to some extent, EMI deposits are not. It is true that EMIs are forced to keep the clients' money at segregated accounts with custodian banks so it seems even more safe; but it is not to overlook that if the custodian bank fails, EMI's clients have a bad luck (Yes, I know that e.g. in LT the custodian bank is central bank, perhaps in the UK too – at least in some cases – but it is not valid universally.) And for some people it is mainly psychologically important.
– With a bank you can be sure that you are automagically CRS-reported (if in an AEOI/CRS country), with an EMI not necessarilly (of course it will not last long and nobody should rely on it).

Having said all of the above: I am personally using (reasonable) EMIs with a peace in mind, for some purposes exclusively. But I am convinced that it is simply “good to know“

 

[Sols]

– In some coutries there are better options for an ADR/settlement with banks; banks underlie to a special institution whereas EMIs just under an institution for general consumer protection that has not so big power.

I haven't seen that but I don't doubt it's the case in some countries. There is a longer history of suing banks than suing EMIs. Do you have some examples?

– Similarly, in many countries the regulatory supervision over banks is remarkably more tough than over EMIs. It has both pros and cons (e.g a hypothetical greater security against more annoying KYC/AML procedures...)

Strictly speaking, this shouldn't be the case since banks and EMIs are subject to the same KYC/AML regulations. But you'd be right that some regulators have perceived EMIs as lower risk entities (only taking EU/EEA resident clients, for example) than banks and let EMIs get away with slightly more lenient KYC. Every EU/EEA regulator I've worked with in the last few years looks at all financial institutions the same now, though, especially since EU 4AMLD.

– In many countries (not everywhere) the bank deposits are guaranteed (usually by the state) to some extent, EMI deposits are not. It is true that EMIs are forced to keep the clients' money at segregated accounts with custodian banks so it seems even more safe; but it is not to overlook that if the custodian bank fails, EMI's clients have a bad luck (Yes, I know that e.g. in LT the custodian bank is central bank, perhaps in the UK too – at least in some cases – but it is not valid universally.) And for some people it is mainly psychologically important.

If a custodian bank fails, creditors cannot touch money held in ring-fenced accounts. They are kept separate from other deposits. That's one of the reasons EMIs struggle to find banking, and why Lithuania's central bank has become so attractive for holding client funds.

Some EMIs have direct access to currencies and for example have TARGET2 accounts directly. IIRC, both Revolut and Wise hold GBP directly with the Bank of England. I guess if ECB and Bank of England fail and your EMI has money there, you may lose money. But I think there are other things to worry about then, such as hoarding canned food and learning how to melt the cans down to make bullets.

 

[Forester]

I haven't seen that but I don't doubt it's the case in some countries. Do you have some examples?

If nothing has changed recently, then e.g. some Central European countries as CZ and SK. Also Canada (altough there is another background making such a difference between bank and EMI).

Nevertheless, as I have written in another thread: it's true that if s**t really hits the fan, the last instance for a client is always the court and there – IMO – does not matter very much whether you are suing a bank or an EMI.

Strictly speaking, this shouldn't be the case since banks and EMIs are subject to the same KYC/AML regulations. But you'd be right that some regulators have perceived EMIs as lower risk entities (only taking EU/EEA resident clients, for example) than banks and let EMIs get away with slightly more lenient KYC.

Yes; I think it concerns/have concerned more the enforcement than the formal rules. Particularly, I perceived it in Hong Kong and Sweden, for example; heard about it in France and Cyprus.

Every EU/EEA regulator I've worked with in the last few years looks at all financial institutions the same now, though, especially since EU 4AMLD.

Well, yes, generally I am under impression that EMIs and banks (generally) are going to behave identically especially re: AML and CRS...

If a custodian bank fails, creditors cannot touch money held in ring-fenced accounts. They are kept separate from other deposits.

I must admit that this information is new to me; and a little bit surprising (but I believe you ). And it changes the game, of course.

why Lithuania's central bank has become so attractive for holding client funds.

I am not sure whether I deeply understand – would you mind to elaborate more? (Until now I was under impression that Lithuania's central bank served just LT EMIs and I guessed – no investigation as it was not so attractive for me – that it was simply some local regulation...)

I guess if ECB and Bank of England fail and your EMI has money there, you may lose money. But I think there are other things to worry about then, such as hoarding canned food and learning how to melt the cans down to make bullets.

Very true

 

[Sols]

I am not sure whether I deeply understand – would you mind to elaborate more? (Until now I was under impression that Lithuania's central bank served just LT EMIs and I guessed – no investigation as it was not so attractive for me – that it was simply some local regulation...)

Centrolink (https://www.lb.lt/en/centrolink) is open to any regulated financial service provider in the EU/EEA.

 

[Forester]

Centrolink (https://www.lb.lt/en/centrolink) is open to any regulated financial service provider in the EU/EEA.

Oh well. Interesting.

BTW, the news links on the Centrolink page – namely this https://www.lb.lt/en/news/electroni...tor-strong-growth-calls-for-better-compliance and this https://www.lb.lt/uploads/documents/files/Elektronine_MI_EPI_2022_EN_1.jpg – are IMO worth attention, too.
Thanks.

 

[Dexur]

Romania requires a local bank for paying taxes. No clue about Cyprus. I have both Wise and Revolut for business and private stuff. But I'm also trying to open a bank account in a local bank at the moment.

 

[MiltonStone]

Wise and Revolut are both good if you can't get an business account anywhere else.