Some days you really do learn something new.
The other day, I got the latest bill for some work being done to my elderly and ailing Land Rover Defender. As is the nature of anything to do with Land Rovers, the work is being done in a very out-of-the-way place, in the wilds of County Donegal.
And of course, the man understandably wants paid in euros.
Up until now, I have used PayPal, which saves a bit on fees but (again) as is the nature of anything to do with Land Rovers, the sums are not insignificant, so I started to look around.
One of our clients (you know who you are, thank you!) had mentioned Transferwise to me a month or previously, and so, at 8 o’clock one night, within half an hour I was able to set up accounts in sterling, euros and US dollars at Transferwise, send some money to the sterling account from my usual bank account, and pay the man his euros. All after normal banking hours.
And – this is the good bit – between the fees (pence rather than tens of pounds) and the exchange rate (mid-market) my sterling cost for the transaction was reduced by about 5%.
You can even get a debit card for the account.
The other card I have been using for purchases while abroad (or purchases online in foreign currencies) is Monzo. This gives the same mid-market rate for currency transactions, and comes with a Mastercard debit card and an app.
The app not only gives you instant notification of the sterling amount you have paid, but also tracks and categorises your spending – at the end of the month you can see at a glance how much you spent on eating out, holidays, fuel, etc, etc. I only use it for foreign currency transactions, but I have a friend who uses it all the time to track his spending and he swears by it.
I am not endorsing these accounts – you would need to check out which one suits you. I understand Revolut does something similar to Monzo, and also has a business version, which I’m going to investigate. But you might want to have a look, especially if you travel a lot, or send largish sums abroad from time to time. I’ll need to look into it a bit more, but I think Transferwise is more suited to bigger international transfers, with Monzo or Revolut being more for day-to-day smaller transactions that you might otherwise stick on a Visa or Amex card. Please note that these are all accounts with debit cards attached, not credit cards (although Monzo does give you an automatic £1,000 overdraft, which I am not suggesting you use!)
Finally, I think the “normal” banks and financial institutions need to sit up and take notice. As already noted, it took me half an hour, out of normal banking hours and without a visit to a physical bank, to set up an account at Transferwise. Monzo was much the same. This is much, much more customer-friendly than having to make an appointment, take time out of your life, provide two forms of ID, fill forms, give your inside-leg measurement… you get the picture and you’ve been there.
To traditional banks, insurers, etc, I say: Wise up and get into the real world, otherwise these new guys are going to eat you for breakfast.
PS Since you ask, she is a 1993 200TDi 110 County SW, and she’s doing much better, thank you. Hoping to have her back in March.
David Crozier CFP
Chartered Financial Planner