Banking solutions for travelers, expats & digital nomads

Nowadays one can spontaneously decide to jump into a plane to fly on the other side of the planet. As long as you have a passport & some money, you’re all set.

Assuming you have a passport & the money, you might be happy to discover that “managing & accessing your money from anywhere” part is something that can be very simple.

I mentioned a “spontaneous traveler” example above, but remote banking is also key to being able to live in remote areas, being an expat (a fancy word for “emigrants” I suppose) & for other world citizens alike to do live however & wherever they want: perpetual travelers, digital nomads, or whatever other name you are labelled with.

Bank cards and ATMs: you’d love to live without them but it’s almost impossible. Let’s explore recent solutions to remotely manage your money with peace of mind (bank-wise at least). There are many out there, it’s up to you to take them. Do try & experiment, you will be surprised how simple things can be!

In a nutshell, here are the topics I will tackle:

  • Slash costs on international money transfer
  • How to reduce dependencies to a given bank: they need your money, not the opposite
  • Types of bank cards: Visa, MasterCard or else
  • Bank card lost? how to be able to continue living/traveling as usual
  • Manage money from anywhere: via phone call, web app, or mobile app

Evolution of online banking


The banking landscape is rapidly evolving, big banks are changing so fast…NOT! Actually, the smaller players are the one starting to disrupt the whole banking system.

FinTech: a short version of “Financial technology”, wikipedia says “a line of business based on using software to provide financial services […] generally startups founded with the purpose of disrupting incumbent financial systems and corporations that rely less on software”.

FinTech companies are what you want to look at, they are the game changers. The phenomenon is even called the “fintech revolution“. They slash costs, simplify banking & provide better support: what else could we hope for? oh yeah, they make my old fashioned & annoying backward banks mad, that’s not bad either 😉

Retail banking is changing very fast & it looks like things are only going to get better & cheaper.

Your citizenship & country of residence seem to be the only limitation to access any service you like. But even that is changing, many companies start to offer there service regardless of your location & citizenship.

Slash costs on international money transfer


Moneytis

Moneytis allows you to compare many services to send money abroad. This includes Transferwise, CurrencyFair and many more. You might want to use this in order to check you get a good deal & to discover new services (they all work somewhat differently). Moneytis even allows you to add Bitcoin markets to the comparison it provides.

TransferWise & CurrencyFair are two services I have been using a lot recently. They helped me to save hundreds of dollars in fees. Please compare those companies’ rates with your bank rates if you are in doubt, numbers will talk for themselves.

Transferwise

Transferwise.com allows you to quickly & very simply send money to a bank account in a different currency.

The transaction usually goes like this:

  1. Decide the amount of money you want to send & see what rate you will get
  2. Enter all the necessary details: beneficiary details, currency, sum & so on
  3. Send the money to transferwise: either via bank card or via bank transfer
  4. Wait a few working days for the magic to happen

Details on the 3rd point: if you do a bank transfer, it will be to a bank account in the currency your choose. So for instance if you choose to convert from AUS to GBP, you will be given the details of an Australian bank account to transfer the money to (in AUS). So your bank “only” applies national transfer fees if there is any, it’s usually free.

Details about the 4th point: it takes around 3 working days for the money to arrive in the destination account in the specified currency.

CurrencyFair

CurrencyFair.com also allows you to send money to a bank account in a different currency. CurrencyFair seem to cater a different range of customers: it gives more control on your exchange rate, more transparency & has as a result usually has low fees. But the usage is a bit more complicated. CurrencyFair is similar to a bank: you get one account per currency.

Let’s pretend we want to transfer 1’000€ in USD. The transaction usually goes like this:

  1. Send the money to CurrencyFair: via bank transfer. In our case: transfer 1’000€ from personal bank account to CurrencyFair bank account with the reference number provided.
  2. Exchange the money into the currency you want. In our case: in CurrencyFair, request to exchange the 1’000€ in USD (we’ll pretend we got 1’200 USD).
  3. Send the exchanged money from CurrencyFair to an external bank account. In our case: transfer the 1’200 USD from our CurrencyFair account to an external bank account in USD.
  4. Wait a few working days for the money to arrive on the bank account

Note that CurrencyFair also has a “MarketPlace”, which allows you to try to achieve better exchange rate (provided you are not in a hurry). The above process is called a “QuickTrade”.

The FAQ on CurrencyFair is very detailed and very transparent. CurrencyFair.com/support/centre/

Security-wise, CurrencyFair has a 2 factor authentication: when you log-in with your username & password, the system sends you a verification code on your mobile phone, without it you cannot log-in.

TransferWise vs CurrencyFair

As explained above, TransferWise and CurrencyFair are quite different. So I would recommend singing up to both of them. It’s free to register, so you might end up using both, but prefer to use one service in a given circumstance & the other in another.

Sign up nationality & residency requirements: as far as I know there is no restriction on citizenship or country of residency, whether it’s for TransferWise or CurrencyFair.

TransferWise covers more currencies than CurrencyFair: 36 vs 18 currencies. Although 20 out of the 36 currencies supported by Transferwise can only be sent out to.

TransferWise does NOT do 2 steps authentication. This can be seenas a weakness but this can also be seen as something good: what if you don’t have your phone with you? i.e. you are traveling.

CurrencyFair usually has better exchange rates. And the MarketPlace” feature allows you to achieve even better goals.

TransferWise has had a lot of great feedback. It is based in the UK and backed by Richard Bronson. All in all it seems like a great service.

CurrencyFair also has had a lot of great feedback. It is based in Ireland, it is regulated by the Central Bank of Ireland, and in Australia by ASIC. All in all it seems like a great service too.

How to reduce dependencies to a given bank


Long story short: by being a customer in several banks (even in different countries if needed). This will also increase your options & knowledge. Only sign up for banks providing free services.

Look at “online only” banks in your country of residence, see what services they offer. They usually are way more competitive than your average big banks.

Number26, a Germany-based bank, seems to be a great option. Thomas K. Running has written an article about “The world’s best bank accounts for international travelers and nomads” covering Number26 along with other banks. Since then, Number26 has expanded to 6 additional European countries: Germany, Austria, France, Spain, Italy, Greece, Slovakia and Ireland.

Revolut is another player in the retail banking industry. You sign-up with them via their mobile application & instantly have bank accounts in USD, GBP & EUR. There is no restriction on your citizenship or country of residency. The exchange rates are extremely good, actually better than the ones given by TransferWise and CurrencyFair in some cases. Once you have signed-up you have access to your virtual bank card that you can block or renew in a few taps. This is so far the most radical & fun bank (yes fun!) I have experienced. If you sign up, please use my promo code: adrienhg

Transferwise.com has a “borderless account” service, which allow you to “instant international bank details to receive money from over 30 countries around the world with zero fees”. I’ve not used the service myself and heard that “it does the job, but isn’t actually cheap to use” – that friend had to pay huge fees (circa 70 USD) to receive 2000 USD. Anyhow, a big player in the space worth mentioning & investigating further.

Note that at the time of writing Revolut is not FCA approved. However, Revolut is trying to become FCA approved and says it partners with FCA approved entities (such as PaySafe) to provide its services.

Check out the banks mentioned in this article if you are from North America or Australia.

Finally, you may consider becoming an Estonian e-resident to be able to open a bank account over there. You currently have to go there to open a bank account but things might change very soon (in 2016 I hope).

Types of bank cards: Visa, MasterCard or else


If you are traveling around different regions of the world, you definitely want to both type of bank cards: a VISA & a MasterCard. Amex (American Express) is also extremely well supported, so an “Amex + VISA/MasterCard” solution could definitely be good too.

Some regions of the world will have cash machines that only let you withdraw money with one or the other.

For instance, I found myself unable to withdraw cash with my VISA when traveling on the huge island of Sumatra (Indonesia). I did not have a MasterCard but had some “rescue USD” in a secret pocket. I luckily bumped into other travellers who had spare local money so I could exchange USD with IDR.

MasterCard covers 210+ countries, whereas VISA covers 200+ Countries, credit card companies & networks: cardhub.com/edu/credit-card-companies/ and en.wikipedia.org/wiki/Smart_card. Watch out: “covering a country” does not necessarily mean that it covers all the areas of a country. See my little story in Sumatra above.

You can find out more about differences between VISA vs others on this page www.creditcards.com/credit-card-news/help/differences-visa-mastercard-amex-express-discover-6000.php

Bank card lost? Continue living/traveling as usual


If you have followed the above advice “being a customer in several banks”, you should be able to:

  • live as usual even if you lose one of your bank cards
  • travel as usual if you had a 2nd bank card with you

I always have money hidden that I can use in case of emergency, usually $200+. If I am not able to use my bank cards, I can rely on that cash until I get more money some other way.

If you are traveling & lost all your bank cards, one of your banks should be able to send you a brand new card on the other side of the world in 5 working days for less than 40€. I was pleasantly surprised when it happened to me as I was traveling in Vietnam and then again later in Malaysia (they sent it using TNT).

Leaving an “emergency” bank card to a close friend or family member can also be a solution. If your bank is too slow or complicated to send you a new bank card, you can then ask your friend/family-member to send you the card you left them. As mentioned before, TNT was the shipping company used by my bank to send me new bank card. I also used TNT to send legal papers from Thailand to Europe, it took around 5 days & costed around 30€.

BitCoin is an option to explore (see in a paragraph below). This digital currency can be exchanged in a local currency. A good emergency solution when traveling.

WesternUnion also works well, although their fees are high. Another thing is: it can be challenging to pick up big sum of money sometimes, think about getting 2’000€ in a country where a basic salary is 100€ per month. As an emergency solution, your bank can transfer the money for you, but usually at a high fee. You might want to find a way to do this online yourself, or ask a family member or close friend to help you out.

Manage money from anywhere: via phone call, web app, or mobile app


Again, you want to make sure you have chosen the banks that match your expectations. Do NOT hesitate to close bank accounts in banks that are disappointing you.

The minimum expected is a great web application where you can easily manage your money, communicate with the customer service, & initiate special requests (i.e. renew bank card).

If you go traveling for a long time, make sure you try your banks’ services from “back home” whether is by phone, web application or mobile application. Once you are gone, things can get extremely complicated.

Using Bitcoins and cryptocurrencies?


Bitcoin & other known cryptocurrencies can save you from the most desperate situations: transfer costs are extremely cheap (maximum a few bucks), transfer speed is extremely fast (2 hours maximum) & there is no limit to the quantity you can transfer.

Considering the above points, if you travel a lot then it is totally worth your time to learn a bit about crypto & sign up to a couple of known fiat-crypto exchanges such as Coinbase in case you have an emergency situation (i.e. lost all your valuables, including passport & bank cards).

LocalBitCoins.com can also help you, but the idea is that you can do P2P currency exchange: convert bitcoin into another currency, whether online or face-to-face. As the website states “meet the person to buy bitcoins with cash, or trade directly with online banking”. A potential life-saver if you loose your credit cards while traveling.

Resources


Wikipedia.org/wiki/Moneytis

Wikipedia.org/wiki/TransferWise

Wikipedia.org/wiki/CurrencyFair

LocalBitCoins.com – P2P bitcoin exchange

The Telegraph on TransferWise “Friends spark a revolution to change money”

Forbes “Is This Banking 2.0? Number26 Launches”

Medium: The world’s best bank accounts for international travelers and nomads

Expert Vagabond: travel banking 101

Wikipedia.org/wiki/Financial_technology

Financial Times “German start-up Number26 launches banking app across eurozone”

TechCrunch “Revolut Raises $2.3 Million For Its Mobile Foreign Exchange Service”

Inc.com “Why Fintech Is One of the Most Promising Industries of 2015”

Bloomberg “Four Entrepreneurs Talk About the Fintech Revolution”

Money.StackExchange.com: Is there any inherent difference between Visa and Mastercard credit cards?

cardhub.com/edu/credit-card-companies/

creditcards.com/credit-card-news/help/differences-visa-mastercard-amex-express-discover-6000.php

en.wikipedia.org/wiki/Smart_card

Tech.eu: Dublin’s CurrencyFair raises €8 million, appoints new CMO

SmartMoneySmartliving.com: The Rise Of ‘The New Banks’ – Five Digital Banking Options You Should Be Aware Of

TheEuropas.com: 2016 Awards (see “Best FinTech Startup” section)

BusinessInsider.de: The 40 coolest people in UK fintech

nomadforum.io/t/what-do-you-do-once-you-lost-and-blocked-your-credit-card/6739

3 comments

  1. Hey !

    Thanks for this full article. Transferwise seems to be the best to do money transfers.

    Do you know http://neomy.io ? It’s a new tool completary to transferwise, currencyfair, etc. It alerts you when it is the best time to send money abroad. An alternative way to save even more money when you have to send money abroad. You should check it 🙂

    1. Hi Julian, you are welcome.
      As explained above, Transferwise & CurrencyFair are both very good, just slightly different. For big sums (USD 1’000+ ) I much prefer CurrencyFair though. TransferWise is nice for its speed & simplicity. It’s best to use both in my opinion, it’s also great to have 2 options just in case one of the website is in maintenance or else.
      Thanks for the tip on Neomy.io, it does look very interesting.

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