Banking In Italy: Revolut on IBANs, FX, And Skipping The Branch

Luca: Good morning, everyone, and welcome back to another episode of the Magic Towns Italy podcast. I'm Luca. I'm here with Anna. One of the questions that we get the most, and we definitely see the most in expat forums and retiree forums, people looking at moving to Italy or Europe, is around banking. Banking is very different in Europe from how it is in the US and other parts of the world.

That's a sometimes steep learning curve. But the good news is that I think banking in Europe actually works better than many other parts of the world. But still, people have questions like how do I open a bank account in Italy? How do I transfer money internationally? How do I make sure that I pay as little as I can in foreign exchange fees? And a lot of people they've never really made international payments like that. This week, we have a very special guest, straight from Revolut, the banking app that has been taking over Europe for the past ten years, Jeffrey Chanseau.

We have asked [00:01:00] Jeffrey to talk to us about how to open bank accounts in few minutes, how to make sure you save money on foreign exchange fees. And just so we're clear, in the classic Magic Towns Italy spirit, we are not paid for this. No one's paying anyone. He's a guest, and we thought that would provide a good service to our listeners by giving it to you straight, from one of Europe's leading banking apps.

So in Jeffrey's words, twenty minutes banking in Italy and Europe. Enjoy the listen.

Jeffrey: I actually come from Tahiti, French Polynesia, which is on the other part of the world. However, I've always been passionate about tech and the value it delivers. I've seen through an internship that I did in banking, that processes were heavy. It took so much time to do [00:02:00] simple things. And that's how I came to Revolut, because it was interesting. They brought that tech approach to banking, to kind of, facilitate the user experience for the processes to go fast, and bringing autonomy to the users. Cutting as well inefficient or useless costs that users pay. So that's why I'm here, basically.

Luca: So just for people that don't know this, and our podcast has a lot of American listeners, so I say this without any rancor, but, you know, having lived in the US for many years, it's 15, 20 years behind.

Revolut is a bank with no branches. It lives in an app. It has, of course, people that you can talk to if you need help. But there's no walking in and paying with a check. It's all digital, it's all electronic, and it was born, in my recollection, very much as a movement of people that were talking to each other. I [00:03:00] remember people with the first Revolut cards going to each other and like, "Oh, this is so cool. Like, I can open an account in five minutes, and, you know, the fees are so low." So that's how it was all born. Would you say that that's still how it works, Jeffrey?

Jeffrey: Yeah, now I would say that it's evolved, in a much more complete suite of solutions, and now we cover other parts as well. We're not focused solely on B2C, but also on B2B, helping companies, in other segments such as, FX forwards, covering risks, acquiring as well. We have a whole module to accept payments, and we have an open API as well for more tech-savvy companies that want to automate some processes. So yeah, compared to what we were before, just the fintech specialized on card payments abroad for retail users, now we're a whole complete bank covering as well B2B and all the [00:04:00] segments, and we evolved into a whole I would say, financial super app.

Concerning the fact that we don't have any offices or places for the clients to go to, I think it was really born from a pirate point of view, where we noticed that most of the time you have a bank to go to, but you go there once a year if not less.

Luca: But you don't like it. No one likes going to the bank.

Jeffrey: Yes, yes. And at the end of the month in legacy banks, you still pay for the bank to rent that place to go to and you don't even use it as a client. So, it's a huge opportunity to cut the cost for us while still in the B2B segment, having a point of contact, which you can reach out to via modern channels such as emails or phone calls or Google Meets.

Luca: So you're saying Revolut has evolved a lot over the past few years. We've all seen [00:05:00] that. And right now, I believe last time I checked, it was the most downloaded financial app in Italy. Do you think that this kind of adoption is still from mostly people having Revolut as a second account for, like, travel and to, you know, to exchange foreign currency? Or do you think Revolut is genuinely becoming the primary banking method for a lot of Italians?

Jeffrey: Yeah. So for the past few years, we have been really aggressive on acquisition, and people saw us as a secondary bank, just that useful app that you use just to travel. Right now it's starting to change because, the app itself is easy to use. We're securing multiple banking license to protect the funds of our clients, and we're really gaining legitimacy over our clients. And we're having financing solutions as well that are coming in, so we're really completing what we can offer [00:06:00] to the client, and that would allow our clients to use only Revolut compared to the positioning we had the past few years.

Luca: People have been asking for a very long time for Revolut to offer an Italian IBAN. For our American friends, that's a bank account number in Italy. A lot of people from outside Europe, don't understand that Europe very much shares a banking system and therefore you can easily use a Lithuanian bank account, which was the original license for Revolut in Italy, to pay your utilities and do everything and no one can say no to you. It's called IBAN discrimination when the bank says: "No, I'm not gonna, you know, I'm gonna let… I'm not gonna let you pay your electricity bill because you have a non-Italian bank account."

So Revolut was always able to be used on a standing basis, but people still wanted the Italian bank account starting with IT. You guys rolled that out in Italy I think last year to consumers. When [00:07:00] are you planning to provide this to businesses as well?

Jeffrey: From my position, I'm not able to give you any ETA, but, I know that it's in the roadmap. It's a priority.

Luca: So you're working on it …

Jeffrey: It's one of the priorities. Yes. I assume because, it's a feedback that we have from a lot of clients. It has been a deal breaker for us on some clients. So obviously, it's way better for the user to have an IT IBAN and we're working on it.

Luca: And there's a lot of features that you guys now offer to businesses.. like the small loans that you can get as a business in Italy. There's of course instant payments, a lot of operations with sending and receiving currency. There's still a little bit of a gap when it comes to, for instance, tax payments, sending electronic invoices, and so on and so forth.

I know that you guys rolled out last week to Italian consumers the ability to pay their taxes via Revolut. Do you have any plans, to extend this to businesses anytime soon?

Jeffrey: [00:08:00] There's always a lag obviously, between what we offer to retail users and what we offer to, to business, clients for compliance reasons, security reasons, stuff like that.

Obviously what's better for the client, which is the ability to do that, we're working on it, to have the most, useful accounts with the most useful features. I cannot guarantee that it's going to come and give you an ETA, on when it's going to come, but I'm sure they're working on it, and that is going to come soon enough.

Luca: Good. And we would love to see that. It will save us some trips to the bank. A lot of expats in Italy are digital nomads, they start small businesses. What would you say Revolut solves for them that a regular Italian bank does not?

Jeffrey: I would say when you're a digital nomad, we have always that picture of the entrepreneur going everywhere in the world [00:09:00] traveling, with only his computer and his phone. This is the perfect case, for a Revolut user, because since you're traveling, you're not able to go to your physical bank, therefore you need to have a bank app that is really relevant and easy to use. This is what we offer with Revolut. We're above being a bank. We're also a tech company, meaning we're customer first and we really apply these values and these goals into the app. So it's pretty easy to use.

But basically, you can really see the difference between old companies and new companies app, in the user experience. And, it's basically the same with old banking apps and new banking apps. So basically the goal is in a few clicks you can find everything from your phone or your desktop.

Luca: There's another big thing which is important to many expats, which is English, [00:10:00] and the ability to support other languages too. One of the big drawbacks of traditional banking, especially in Italy, where the general knowledge of English is pretty low. I don't say this myself, although we all see it in the EFI rankings for English as a second language. France is not that much better, I have to say. Yes. But a little, a little bit better. So when people walk into a bank branch in Italy, very often they're like, "People don't understand me. I find it very difficult." So, having onboarding and customer support, in… I don't think-- You guys don't just support English, right? You also have customer support in other major European languages, right?

Jeffrey: Yep. Um, especially with businesses, we have your point of contact usually. Like it's mandatory at Revolut to speak English, obviously. And but then you have a native speaker on your market as well.

Luca: Understood. Do you have Revolut, Anna?

Anna: Yeah. I don't always use it, but yeah, I have it. I find it really useful. But I have a [00:11:00] question because I have no idea if it's the case. Like, can users create, like, virtual cards for, like, online payments with Revolut? Because, for example, with my Italian bank account, I can create this kind of virtual cards so they are not, like, connected to my main account, let's say. And I don't know if Revolut works the same or it's different.

Jeffrey: Yep. So exactly, this is one of our best seller I would say. You can create disposable cards actually just to make one payment. If you're on a website that you don't necessarily trust and you don't want to put your main card on it, you can create a card that will be used only for this payment and then destroyed instantly after the payment.

You can also have access to a lot of parameters to your cards, meaning, like, you can change, the payment limit, you can change, the type of merchant the, the card will be able to pay to, the countries, stuff like that, [00:12:00] instantly And you can create as well other new virtual cards, that won't be disposed right after the payment, but which you can freeze whenever you want and just use, for example, when you're traveling. And you can link it as well to, currency account. For example, if you're going on a trip, to Australia, you can, beforehand change your euros into, Australian dollars, and then link a special card to this sub-account in the foreign currencies.

Luca: I have a confession to make.

Jeffrey: Go

Luca: ahead. I pay, I pay for all my internet sc- subscriptions with a, um, with a virtual card, and then I freeze it after a year. Ah, okay. And you do not… You have no idea at the end of the year how many subscriptions you had signed up for, but then you're like, "I, I don't need this. Why, why did I ever sign up for this?"

Anna: But is [00:13:00] there a limit of virtual cards that you can create or it's just free?

Jeffrey: Um, actually, it doesn't cost anything additional, to your subscription. In terms of retail, the first plan is free. But then afterwards you can have other subscription, to have other advantages such as subscription to other services that are included in the subscription. Maybe there's a limit. I never saw anyone reaching it. In the business segment, you can create 50 cards per user. Um, I've never seen anyone reaching that.

Luca: Limit. Is that enough for you, Anna? Can you live with 50 cards, Anna?

Anna: No. I'm asking because, with my Italian bank account, for example, if I create one virtual card, I can decide if this card is gonna last for a certain amount of time, or it's just, like, disposable, let's say. I can use it one time and then I can't use it anymore.

It's the same

Luca: [00:14:00] system.

Jeffrey: Yes. There's a plenty of parameters that you can put. One main thing that our clients like though is the payment limit. Usually in traditional banks you have to call your point of contact to raise that limit. And then sometimes it costs you additional fees to do that. At Revolut, at least in the business section, the limit per card per month is five million euros. So-

Anna: Mm …

Jeffrey: Given that you can create 50 cards per user at five million payment limit per month, I think there's a pretty good stretch. The issue is more of at how many I'm going to lower that limit just in terms of security if I get my codes stolen, not to lose too much money.

Anna: Okay. Interesting. And are there any fees if I have, like, the free plan, for example?

Jeffrey: It depends. Traditional banks, usually when you pay on another country when you're traveling, for example, to Japan or the US, traditional [00:15:00] banks, put fees on those transaction. This we don't have at Revolut. We have no fees. We're not going to charge you because you use your card abroad. Where some fees could be applied, it's only on the exchange rate if you pay on other currencies that what you have in your main account.

Luca: You're talking about the free plan, Anna. I'm very interested, in the paid plans. I think everyone's dream is to get a metal or ultra retail plan on Revolut. The ultra plan, I think it's like 500 euro a year. But you have, like, a subscription to the Financial Times, you have a subscription to NordVPN, you have a subscription to Tinder if you use that. I mean, my subscription to the Financial Times costs me 400 euro a year. So this year I'm like, "I'm gonna sign up for Revolut Ultra and actually save some money." But when are you guys planning, if ever, to bring out card tiers and membership tiers to businesses so, [00:16:00] you know, we can also enjoy all these perks that retail have?

Jeffrey: Actually we're on a pilot right now, and the Titan card, which is the equivalent to the ultra card in the retail section, it's only available in the UK right now.

Luca: Boo…

Jeffrey: maybe coming soon. I'm not going to promise anything, but maybe coming soon to EA.

Luca: Okay. We

Jeffrey: are excited about that. With RevPoints, and maybe other perks.

Luca: That's great. Well, there's a lot of like really detailed knowledge that goes into what you need an Italian bank account as a business. There are certain things that unfortunately you must still use a traditional bank account for. For instance, getting tax refunds from the Italian taxman. Yeah, I know it sounds crazy, but sometimes the Italian taxman also gives you money back. And in order to do this, you must get your bank to send a letter to the Italian tax office, [00:17:00] and, I know that Revolut doesn't do this. No one does in fintech because, you know, as you say, tech companies, they no- they don't have a person that can put an envelope in the mail and ship it off.

And you know, there's a few other things. Electronic invoices in Italy are a big deal because, you can't just invoice someone. It also has to be sent to this electronic system that's owned by the Italian taxman You can't tell us when these things will be rolled out, but can you tell us what is the best way to let Revolut know, "Hey, there is this gap, and I need you guys to take a look at this. And please can you tell us if you can work on it?" How can we get our listeners to raise their hands and say, "There's 10,000 of us that want this feature"?

Jeffrey: Yeah, sure. On the business side, you always have a point of contact. Feel free to reach out to bring your feedback and what you would want to be implemented in our product and services. And internally as point of contacts, we [00:18:00] have, our voices, our own system of feedback, to go back to the product team, to implement, uh, this stuff.

Luca: Okay. So let our rep know, and then they are going to lobby internally to get us what we want.

Jeffrey: Yep.

Luca: Okay. Careful what you wish for.

Anna: You already mentioned it, but just asking for more specifics. Like, for paranoid people, if something goes wrong like, how does the customer support work? Like, do you answer at any time? How does it work?

Jeffrey: Yep, sure. So as I mentioned, we are point of contact. It's just like you have a point of contact in your traditional bank. We answer by email, by phone, or organize Google Meets. And we're pretty reactive. I don't know why, but a lot of people when they think about Revolut support, they always think about the chat in the app redirecting to AI or [00:19:00] other support.

Luca: It starts with that, right? Then you get sent to a human.

Jeffrey: Yes, it does, but on the business side, you have a privileged point of contact, which is the, remains the same person, and rather than going to the app, going to the chat support, you can directly reach out by email or just calling, and we'll help you with that.

Luca: That's great. I don't wanna get awfully technical, but perhaps, you can explain, one thing in very simple terms, which is, how a business owner, let's say an American that comes to Italy and opens a business, how can they hedge? So how can they reduce the risk they have from maybe having, you know, they have a mortgage payment still back in the US, so they have to pay that in dollars, but they earn euro. What are, like, one or two simple strategies for them to remove that worry?

Jeffrey: Yeah, sure. So actually it's a really good point to mention because a lot of our [00:20:00] clients didn't know that, they could do that. They're really exposed to the variations, obviously, Euro and USD. It varies, so it can impact your business. And that rate, depends on maybe what's the, what the US president is going to say, what he's going to put on Twitter..

Luca: Which- Yeah, for compliance, who's gonna cut this bit.

Jeffrey: Not necessarily. Not necessarily, because this is true. We have seen before that- Yeah, yeah. Absolutely … we have seen before that Some tweets made an impact on the Euro- USD, and it had, an impact on our clients. And we found a solution actually not to be exposed fully to that mechanic.

What you can do at Revolut is to lock the rate for future transaction. So this is really good because no matter what happens afterwards, after you lock that rate, you know that you're going to [00:21:00] exchange, at the rate that you locked at minimum. Obviously, what you can say is that, the rate can fluctuate negatively, and then you're happy because you locked a higher rate, but it can also go up, and that's where, it's really important to lock a part of your global needs and not the full need. If the rate goes lower than what you locked, then you're happy, you use what you locked, and if it goes higher, you can use that rate as an opportunity and save some money as well.

Luca: It's like insurance. You want to be protected. It costs you a little bit, and removes uncertainty. But you don't really hope- Yeah … that your house burns down so you can get the insurance payment.

Jeffrey: Yep, exactly. What matters the most is the rate that you lock and, when to do it. And for that, it might be scary for some clients in the first place, but we're here for that.

When you open an account with us, obviously you have a main point of contact, my colleagues or [00:22:00] me, and then you have experts as well on the rate, which will be able to guide you on what's happening in the world right now, what strategy, what part of your global needs you can lock. And then, you can do it by yourself on the app itself. You're not left alone is in this process.

Luca: Do retail accounts also have access to forwards?

Jeffrey: No, unfortunately they don't. Um, we as a bank, when, when, when we do, uh, offer these, we obviously take risks as well, for our clients and right now it's only available to businesses.

Luca: Okay. I think a lot of our listeners who have been complaining, for instance, since the beginning of the year about the movements in the dollar, the dollar has been getting weaker, although it's still a multi-year, strength levels.

But you know, when you start to see that 5, 10% of your purchasing power in Europe gets eaten away and you know, it's things. So I'm sure that people would absolutely [00:23:00] love to get out to retail accounts, the ability to lock their rate for a little while and sleep a little bit better at night. Feel free to bring that feedback to your product team.

Jeffrey: Yeah, exactly. Obviously when you see that, in end of January, I think the rate was at 1.20, and now you see it's at 1.16. We're still in the higher average compared to the, the last five years window. Remember in 2024, if I'm not mistaken, in December, we're almost at, 1.01.

Absolutely. So there, there's a huge gap With a forward at Revolut, you can lock the rate for one year in the standard conditions, and you can obviously see that with these huge variations, you are happy when you lock a good rate, for this span of one year, because it allows you to have that flexibility of okay, [00:24:00] when whatever happens, most likely I'm going to benefit from the situation. Either if the situation is bad and I'd locked a rate before, which is better, or the rate gets better and then I can u- use that rate when that happens.

Luca: And since we're talking about worries, one thing that is often misunderstood is that fintechs are not, um, insured for the client's, money. So if something happens, the, you know, the client has to absorb the losses whilst traditional banks are insured. Can you clarify this for Revolut users?

Jeffrey: What you described here is only for fintechs that don't have any banking license. People think that since we're a fintech company, we're not a bank, and then we don't guarantee the funds, but actually we're a bank, so we do guarantee these funds.

Luca: Okay. Thank you. Is there anything that you think we should know that we haven't asked you about? Any cool features or, [00:25:00] you know, anything important for our listeners?

Jeffrey: No, just to summarize, Revolut is an easy bank account to use. It gets the best of both worlds, I would say. Like, the good user experience that fintechs have on top of having features that traditional banks, have, the most important ones. We're focused obviously, on international clients that work at the international level because of the optimized fees on currency exchange, with the multicurrency accounts, with no fees on international card payments. We're more specialized on the transactional, portion of the banking usage. So a day-to-day usage of a banking account and not, the financial more, you know, the loans and stuff like that.

And we're here also to provide, transparent fees compared to the more opaque fee that, traditional bank applies. [00:26:00] But I'm always available just to discuss before opening accounts, just to clarify on what the client could actually pay in a traditional bank and what a Revolut usage could bring.

Luca: On the other hand opening a Revolut account takes you, well, 10 minutes. You can do it from your phone, and it doesn't cost you anything, so I guess people can just try it out and see if it works for them and take it from there.

Jeffrey: Yeah, exactly. On the business side, though, we need more specific documents, but when signing up, you're supported by a professional that knows the process and provides clear instructions on what's needed and just to simplify the process and make sure that the account, is open, in time.

Anna: Oh, can I ask a final question?

Jeffrey: Sure. Go ahead.

Anna: Yeah, because, you know, nowadays there are lots of other online banking options, and what do you think that makes Revolut different [00:27:00] and why would an expat in Italy, like, choose it over the others?

Jeffrey: Yep, sure. So new fintechs actors specialize on one segment. I think the really strong force of Revolut is being able to be present on every section while not losing that expertise on each segment. As I mentioned before, you have one main point of contact at Revolut, which will manage administrative stuff and will be able to redirect you to experts. And in each section, you have one expert that will be able to guide you through, what we can offer and how we can optimize your operations.

For example, one of our competitors is Wise, but Wise is known for the multi-currency account, easy to open just as us, but they don't necessarily offer acquiring. And in the FX segment itself, they don't offer hedging. They don't offer forwards, which is an option that, is really useful to our clients right now.

Luca: Okay I can attest to this as a [00:28:00] user of both platforms. So I don't have a horse in this race. I think, you guys have all changed banking for the best.

Um, thank you so much for talking to us. You've been extremely informative. I should add that you're here on our podcast as our guest. No one's paying anyone. It was just, you know, we wanted to give the best information about making international payments and exchanging currency to our listeners.

Jeffrey: Yep. Thank you, Luca. Thank you, Anna. It's been a pleasure, and always feel free to reach out just to discuss and clarify, how we can help.