2020: Fall of the Neo-Bank: UPDATE
Hello Folks,
Firstly, thank you to all the readers for your positive feedback and shares of my previous article. I’ve had another negative experience with N26 I wanted to share. I am sharing these not to dis-credit N26 or neo-banks, but so that banks of all shapes and sizes can be aware of the painpoints in customer experiences and look to bridge disconnects in the existing experiences.
As I mentioned in the previous article, I have shifted all of my spend from my N26 card to my Lufthansa Miles and More Credit Card (DKB). As part of this, I have set-up a direct debit to pay my balance from my N26 account. Two to three times a month I check the balance of my Miles and More Card, and allocate the appropriate amount into the “Credit Card” space in my N26 app. I do this to ensure I have the funds to cover the direct debit at the end of the month. Now the situation I will explain below is part my fault for not realising the actual date of the direct debit, but again I wanted to share to show my pain points.
The situation
I assumed my direct debit would come out at the end of the month, like on the 30th or 31st. I put a note in my diary to transfer the money from the “Credit Card” space to the Main Account in my N26 app to cover the direct debit. One really painful part about N26 spaces, is that direct debits, standing orders and payments cannot come out of the spaces, only the Main Account. For example:
- My total account balance is EUR 3,000. I have EUR 1,000 in my Taxes Space and EUR 1,000 in my Credit Card space. I then have EUR 1,000 in my “Main Account.” Again, I technically have EUR 3,000 in my N26 Current Account.
- A direct debit comes in for EUR 1,005. That direct debit cannot be fulfilled because the “Main Account” only has 1,000, despite the Total Account having enough to fulfil this.
So as you can imagine, this is exactly what happened to me. The direct debit came earlier than expected (the 24th of January), and despite the fact I had a significant amount of money in my total balance to cover this direct debit, two really annoying things happened:
- I received a notification from N26 that I had a fee of EUR 3 for insufficient funds for the direct debit.
- DKB then blocked my Miles and More Card two days later for lack of payment. I found this out after I couldn’t buy my groceries for breakfast. I had to call them (luckily my German was on-point this morning) and make a payment directly to them. I am hoping the card is re-activated in the coming days
N26, seriously, this is not the bank of the future. Surely you can see upcoming direct debits on my account? Why can’t you remind me of these? You do this for standing orders that I set up (e.g. for my rent). Just a little something to nudge me to transfer that money, that I have sitting in this space, to cover the direct debit. Why can’t you ask me what my spaces are used for to bridge this gap? Furthermore, these spaces accounts aren’t savings accounts. So why can’t money be debited from them? Why can’t I have an option to nominate some spaces to “count in the main balance for debit and payment purchases.”
Sigh.
There is hope though. About four years ago when I was auditing the Tesco Bank app, they had an incredible feature that did exactly the above.
- A few days before a large payment was due to leave my account, there was a notification informing me that I didn’t have enough money to cover this.
- They asked if I would like to transfer money from my savings to current account to cover this.
- Then then had a nice button with the EXACT amount needed for the transfer, making it even easier to cover myself.
I mentioned before I really like the Spaces as they allow me to squirrel away money for things like rent, and quarterly tax payments. I want Spaces to be amazing. I want them to truly help me manage my money and be intelligent, and personalised and contextual. That’s my only (err main) wish for my bank of the future :)
I look forward to hearing your thoughts and feedback. You can contact me on digitalmagss@gmail.com
