Cheap International Transfers with Neon
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Neon recently released a new and very exciting feature when they announced their partnership with Wise. With this partnership, international transfers with Neon will be cheaper and faster!
Now, when you transfer to another country in another currency, Neon will route the transfer through Wise. So, we can profit from the very good banking routing system that Wise uses.
With this partnership, Neon is now the cheapest (and fastest!) Swiss bank for international transfers from Switzerland! It is awe-inspiring for a bank that is only a few years old.
So, we will see what this partnership means for Neon!
Neon and Wise
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Neon is a Swiss digital bank founded in 2016. Neon is the first fully-digital bank in Switzerland and the second digital bank account. In these last few years, they have introduced many features and are growing fast. They were the first Swiss bank to introduce a card with no foreign currency exchange fees.
Wise is a London-based company specializing in international money transfers. They offer cheap and fast international transfers in many currencies.
Wise has bank accounts in a lot of countries. When you transfer from your Wise account, it simply moves from one Wise bank account to another. So, for most transfers, there will be no intermediaries. Having no intermediary banks allows Wise to offer fast and cheap transfers!
In June 2020, Neon announced a partnership with Wise. Now, for a list of 20 currencies (including EUR, USD, and GBP), outgoing transfers will go through Wise. With this, we will profit from faster and cheaper international transfers with Neon!
You can find the list of supported currencies on Neon’s announcement. They are currently working on adding more currencies. I would not be surprised if we saw more currencies by the end of the year!
Cheaper International Transfers
The main advantage of this partnership is that international transfers are now cheaper!
Neon is now the Swiss bank with the cheapest international transfers! For each transfer with Neon, you will pay Wise Fees and the Neon convenience fee of 0.40% of the total amount.
Here are a few examples of fees with Neon:
- Send 1000 CHF to EUR: 8.84 CHF in fees
- Send 10000 CHF to USD: 84.02 CHF in fees
- Send 5000 CHF to CAD: 44.02 CHF in fees
It may seem high like this, but when we compare with Swiss banks, Neon fees are outstanding:
| Transfer | Neon | ZKB | PostFinance | UBS | BCV |
|---|---|---|---|---|---|
| 1000 CHF to EUR (France) | 8.84 CHF | 9.81 CHF | 12 CHF | 16.92 CHF | 34.17 CHF |
| 10000 CHF to EUR (France) | 83.63 CHF | 98.06 CHF | 120 CHF | 166.54 CHF | 160.05 CHF |
| 5000 CHF to USD (U.S.) | 42.61 CHF | 71.90 CHF | 81.32 CHF | 105.31 CHF | 92.11 CHF |
| 5000 CHF to GBP (U.K.) | 42.61 CHF | 71.91 CHF | 81.48 CHF | 105.60 CHF | 98.39 CHF |
| 5000 CHF to PHP (Philippines) | 49.29 CHF | 306.71 CHF | 198.96 CHF | ||
| 1000 CHF to HUF (Hungary) | 10.75 CHF | 35.83 CHF | 46.28 CHF |
We can see that the difference between Neon and other Swiss banks is significant! You can save a lot in fees by using Neon for your international transfers. In a typical case of transferring 1000 CHF to France in EUR, you can save up to 25 CHF compared to the most expensive Swiss bank. And for more exotic currencies like PHP from the Philippines, you can save more than 250 CHF!
I have used monito to make this comparison. The holes in the table are because I have not been able to find the fees for these international transfers. They do not include Neon yet, but it is easy since you just have to add a 0.40% fee on top of Wise fees.
Faster International Transfers
There is another advantage: International transfers with Neon are now much faster!
Indeed, Neon and Wise use the same bank in Switzerland: the Hypothekarbank Lenzburg Bank.
So, an international transfer from Neon will be a simple transfer from one bank account to another. These transfers can be done almost instantly.
On top of that, Wise has bank accounts in most countries. So they can directly initiate the transfer from their Swiss bank account to the foreign bank account and start the transfer.
In practice, you can now do transfers to many countries in less than an hour, sometimes only a few minutes. In comparison, even a transfer from one Swiss bank to another takes one day!
So, if you do not like to wait for your transfers or need to express transfers, this is excellent news for you!
What about receiving money?
Unfortunately, for now, this partnership only covers outgoing transfers.
Sometimes, you want to receive money in foreign currencies, like EUR or USD. For instance, many of the P2P platforms are paying in EUR. So it means you need a way to receive money in EUR with low interest. Currently, Wise and Revolut still are the best ways to receive money in foreign currencies.
With Neon, you must pay up to 1.5% in fees when you receive foreign currencies. For me, this is too much.
I wish Neon would improve its partnership with Wise to reduce the fees on incoming payments.
What about using only Wise?
In practice, you could also open a Wise account and reduce your fees even more.
Now, this means having two accounts instead of one. And it also means that you will have to transfer money from your Neon account into your Wise. And only then will you be able to send the money. This first transfer will take time and is not convenient. You can forget about having transfers done in minutes.
Now, this will allow you to save the convenience fee from Neon. So, you are saving 0.40% on each transfer. It is not insignificant for large amounts. So, it is up to you to decide how much the convenience of a single account is worth to you.
Most people are using their Swiss bank accounts directly to make these kinds of transfers. When you compare Neon and the other Swiss banks, Neon is now much ahead of them. You can save a lot of money by doing your currency transfers with Neon. If you want to go one step further, you can do them directly with Wise.
And what about Revolut?
You could even go one step further and use Revolut to transfer.
Again, this would mean having two accounts. And this would also mean having a much longer time between your transfer. You would have to transfer from Neon to Revolut and then do the transfer.
With Revolut, you could save the convenience fee from Neon and the currency conversion fees from Wise. However, Revolut is only cheap up to a point (1250 CHF per month), with about a 0.4% surcharge. And after this, it is more expensive than Neon. So, Revolut would only work for small transfers.
Overall, I think going with Wise or Neon is better for international transfers. I have more trust in them than in Revolut. And you would save little money anyway.
Ultimately, it is up to you to see how much optimization you want to do.
Conclusion
All the services you need to pay, save and invest, in a neat package, with extremely good prices!
Use the poorswiss code to receive 10CHF!
- Pay abroad for free
- Invest with great fees
Neon was already a very interesting bank, but now it has become a great bank! With Neon, you can now do international transfers with significantly lower fees than traditional banks!
With their partnership with Wise, Neon now offers the following:
- Cheaper international transfers
- Faster international transfers
On top of the Wise fees, Neon adds a 0.40% convenience fee. While this is not negligible, this is still significantly lower than the fees of traditional Swiss banks. I firmly believe this is a great offer! It shows that Neon is a great bank that has a great vision!
To learn more about Neon, read my review of Neon. Or, to learn more about Wise, you can read my review of Wise.
The only thing missing from Neon at this point is the ability to receive foreign currencies without a high fee. Indeed, this partnership only includes outgoing payments. We will have to wait for cheaper incoming payments in foreign currencies.
What do you think of this new feature of Neon?
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Hi!
Reading this im still thinking that in case that the needed transfer is a SEPA one the best option is Zak wich is completely free to send money to France for example.
I cannot see the advantage that Neon has to Zak in sendind SEPA money.
Maybe you can tell me.
Hugs!
I strongly doubt that SEPA transfers are entirely free with Zak. Sure, there is no fee for the transfer itself, but this fee does not matter much. What matters is the conversion fee which is in the percentage of the total operation.
No swiss banks offer free conversion from CHF to EUR. If you already have EUR, you can get free transfers from EUR to EUR, but not from CHF to EUR.
What about Revolut premium? It is like 92chf a year. That is 7,66 chf a month. My wife and i are expats so i paid the premium and centralize the conversions to € with my premium account for her and for me. Difficult to beat eh? ;)
Hi,
It depends on how many transfers you do. Personally, we do very few of them, so we do not pay much fees, much less than 92 CHF per year.
But if you do enough transfers that it would cost more than 92 CHF at Neon, then Revolut Premium is indeed a good option if you trust them.
Hi Mr. The Poor Swiss,
Thank you for pointing out this new feature of Neon! I somehow did not know before I saw your post.
I have one question. What about SEPA (Single Euro Payments Area) transfers to send EUR? The exchange rate might not be the best, probably depending on your bank, but as far as I know, a lot of banks charge no or only very small fees for these transfers.
I am interested to read your thoughts about this!
Hi RetirementDreamer,
It’s true that many banks do not have fees on these transfers. But they often have a large spread, even for something like CHF / EUR. Often, the spread on the exchange rate is much more significant than the fees on the transfers, especially for large transfers.
Thanks for stopping by!
Hi there, I think that monito.com is not correct about Postfinance when comparing…
I don’t thing the exchange rate used by Postfinance is so high like they say…
Here the tool to get the Postfinance rate:
postfinance.ch/en/private/support/tools-calculator/currency-converter.html
Here the actual rate: pwebapps.ezv.admin.ch/apps/rates it is 0.91819
I sent money from Postfinance more than once during September/October (sent USD 3000 once, and USD 5000 another time).
The rate they used was not so bad actually. I ended up paying 2 CHF as a fix fee (international Giro payment, USD), about 10-12 CHF for the spread they applied to the exchange rate, and about 12 USD from the intermediate/final bank.
Hi Met,
It’s quite possible that monito is not up to date on the PostFinance fees and rates.
Now, if you do a comparison for 5000 CHF on monito, postfinance is only 36 EUR behind TransferWise. I think it’s still a reasonable rate.
And even on my article, they do not end up badly. In any case, neither of the Swiss banks can beat TransferWise if you really want to optimize.
People that really want to optimize will use TW or Revolut (for small amounts). But then, for people not wanting to go the extra mile, Neon will be better than all the other Swiss banks.
I do not want to bash on PF; UBS and BCV are worse in terms of fees. And even ZKB who is cheaper is still more expensive than Neon.
Thanks for stopping by!
Hi,
Thanks for the post. For some reason my Revolut limit (standard plan) is still CHF 6000. However I must add that Revolut has hidden fees. They don’t take any charges for international transactions but they are also not doing it themselves. This means that there is a third party involved and if you are sending money out of Europe there will be transaction fees, much higher than Transferwise!
Neon was smart integrating Transferwise in their app but I really think they shouldn’t have asked for a convenience fee. Sending the money to Transferwise and executing the transaction there takes minutes and you can do it while watching TV! Another disadvantage of Neon is the MasterCard exchange rate. Revolut has a much better exchange rate such that even with their weekend markup they are competitive against Neon. So I wonder why Neon didn’t go with interbank exchange rate.
Hi Hur,
Thanks for sharing about your Revolut limit. It is weird indeed, but I guess you will not have to complain about it :)
It’s true that Revolut does not good bank accounts everywhere like TransferWise. So, there are sometimes some intermediaries that can make transfers more expensive than expected.
I still think that they should have a convenience fee, but they could have made it lower. When you compare Neon with other Swiss banks, Neon is significantly cheaper. But TransferWise will be cheaper. Most people being lazy, I think it’s already great to have this from a proper bank account.
It’s a good question about the Mastercard Exchange Rate. But from what I have seen in the different comparison, the difference does not strike me as that significant as you think. Do you have examples of these large differences?
Thanks for stopping by!
Thanks for your reply. I don’t really have a good example with proof. It is a shame that neon doesn’t have an exchange calculator on the app like Revolut does so the only way to compare is actually buy something using neon. I did it only once and had compared but didn’t save a screenshot or anything from Revolut.
Thanks for sharing :)
It’s good to know that it’s not always the best deal to do it with Neon.
It would be much better if Neon had something like Monito or if Monito included Revolut in all comparisons.
Hello ! Thanks for the useful tips. I personally opened a Neon account. However I am French and will definitely spend a lot of Euros, from website, or when I am travelling back for the week end (maybe some months more than 1250CHF). What do you think would be best then? Have an additional account on TransferWise? thanks :)
Hi Mimi,
The 1250 CHF limit per month is for Revolut not Neon.
With Neon, you only have the limits of the account itself. So, if you spend in France with your Neon card, you will pay 0 in fees.
And if you need to transfer money to people in France, you will pay the TransferWise Fees + 0.4%.
In your case, I would stay with Neon.
If you need to transfer more money by bank, not by card, you could use a TW account to save on the 0.4% fee, but that’s only worth it for large amounts.
Thanks for stopping by!
Howdy !
Personally, I prefer to separate currency differences and keep one account for local CH/EUR use, and one Transferwise account for foreign currencies. In this way, I further optimize the fees that are charged by going directly through Transferwise.
MasterCard Debit, simply because merchants pay a fee of 0.44% for each use of the current neon card, precisely because it is not a MasterCard Debit. This is the wrong compromise between a credit card and a Maestro. This does not directly affect the customer, we agree. On the other hand, if like me you lived in the country, you would see that some merchants don’t like it at all when you pay with a credit card (because that’s the case for neon) precisely to avoid them paying fees.
I totally agree with eBill, it’s the only thing that’s currently holding me back from Zak.
On the other hand, why do you need a physical card when Apple Pay, Google Pay and Samsung Pay are available with this virtual Zak card?
If the goal is precisely to have everything on your phone, which is the main reason for the existence of these neo-banks, then why bother with a physical card when your phone can be used as a payment (as it is already the case with TWINT or other payment solutions via NFC/Bluetooth)?
I do not agree with your conclusion. Zak was the first solution on the market, neon came later. I’m not saying that one is better than the other, they are for me complementary and both offer interesting solutions.
Hi John,
I have updated the thing about being the first bank in this article (will do other articles later), you are right. They were founded before Zak’s offer, but they launched publicly after Zak.
Keep in mind that some people may not want to have everything on their phones. For me, the only advantage to Neon and Zak are their prices, not the fact that they are mobile banks. If traditional banks were cheaper, I would prefer traditional banks. I do not want to use my phone. I much prefer having physical cards. I never buy mobile data when I travel abroad and I do not want to have to search a Wifi to pay something. For me, physical cards are immensely superior to Mobile Payment solutions. But this is only my point of view. But since this is blog, it only makes sense that it reflects my point of view.
It makes sense to have a multi-currencies account, definitely. The advantage of Neon here is compared to somebody that does not already use Revolut or TransferWise.
Thanks for stopping by!
your reply above suggest that you think you need an internet connection to use mobile phone payment. This is not the case, at least with Apple Pay. I don’t have experience with the other payment systems, but I assume it’s the same. No connection to the internet needed.
That’s interesting! I did indeed assume that! It’s good to know that it’s not the case.
I did some research and I found out that Google Pay allows a few offline transactions. After this, you will need to contact to the internet to get more offline transactions. This is a weird system. So, if you are for several weeks without internet on your phone (very unlikely), you would not be able to use Google Pay for more 4-5 transactions. But it’s already much better than I thought.
Thanks for sharing this!
And what about Zak and transfer fees ?
I see a lot of excitement around Neon but don’t really understand why… I mean, what really is missing is a MasterCard Debit and the fact that you cannot deposit money directly to the bank. For me that is huge !
I cannot say that Zak is therefore better, but IMO Neon is more about marketing than giving really the best service…
I use both Zak and Neon and see more or less +/- for each solution.
At the end, it is always personal, but in case of shutdown or so, I feel more confident if I now that I can go to a bank and talk directly to someone if the Online service is down :)
Hi John,
With Zak, you can only transfer EUR abroad (for free), but not currencies (no USD for instance).
I understand the appeal about depositing money, but why do you need a MasterCard Debit?
Neon still has several advantages:
* A physical card for buying abroad for free (Zak is only virtual)
* ebills
* Cheaper international transfers
Overall, I feel like Neon is really trying to move the market forward while Zak is just trying to follow.
But there is a definite advantage of having a real bank behind for support.
Thanks for stopping by!
Still can’t transfer CHF to other CHF international account – don’t see reason why.
Hi Greg,
That’s a good point! I did not think of that.
When would you need that?
Thanks for stopping by!
If you calculate fees and exchange rate with higher CHF amounts, then it’s cheaper to send CHF as standard international transfer and on site change it to local currency (if you want).
Why send CHF outside Switzerland? A lot people have mortgage in CHF outside Switzerland
Hi Greg,
I actually did not know that people in Switzerland had mortgages in Switzerland. Then it makes sense to need this. In that case, Neon would not be a good bet indeed.
I guess it could make sense indeed to do some CHF->CHF transfers and then do the transfers at the foreign bank.
Thanks for clearing it up :)
“Revolut is only free up to a point (1250 CHF per month). And after this, it is more expensive than Revolut.”
I guess you meant is more expensive than Neon (?))
Hi Daniel,
Good catch, this is now fixed :)
Thanks for letting me know :)