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Neon Bank Review – Unbiased Pros & Cons

 

A review about Neon Bank

 

Neon Switzerland AG is a new-age challenger bank that’s a complete digital-only experience. The fintech company is based in Zurich, Switzerland and offers its customers a free digital bank account with a debit Mastercard. You open a neon account online via their website or app and all transactions are done on a user-friendly mobile app, completely independent of a brick-and-mortar bank.

Launched in 2019, Neon joins the likes of Revolut, N26, Monese, and Starling Bank to deliver a total Smartphone banking solution that eliminates excessive banking fees, inflexible branch times, a complicated account opening process, red tape, and cumbersome online banking via big banks’ websites. In this review, we will reveal all the pros and cons of why you should and should not sign up with Neon Bank.

 

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People with everyday banking needs demanded a simpler and cheaper way to bank and neon and the likes have answered the call. neon has partnered with giants in the industry to deliver the fastest and cheapest account app for everyday banking needs.

This includes:

  • Hypothekarbank Lenzburg, a leading a Swiss mortgage bank, manages its account payments and neon’s app runs on its Open Platform
  • TransferWise for low cost and transparent service to send money abroad straight from the neon app
  • Sonect for withdrawing cash at more than 2 300 points-of-sales in Switzerland
  • Contovista for spending analysis
  • Yova, a leading impact investing platform in Europe
  • SELMA, a Robo-Advisors for sustainable investing

 

Partnering with these giants allows neon to deliver a superior digital banking platform while keeping costs low. These costs are passed onto their consumer base in the form of fee-free or low fee products and services.

 

Did you know?

A challenger bank competes with the large traditional banks but without brick-and-mortar branches or an ATM network. Their products and banking services are only available through the bank’s mobile app or their website.

Digital-only banks are growing by the numbers and their popularity is soaring because they are meeting a massive need to deliver banking that is faster, more convenient and considerably cheaper than big banks. Challenger banks like neon are typically built on Banking as a Service (Baas) technology services and operated by fintech companies.

 

NEON FAST FACTS

Founded

2017

 

Founders

Jorg Sandrock

Julius Kirscheneder

Michael Noorlander

 

Headquarters

Zurich, Switzerland

 

Company funding

neon has raised a total of CHF15.3 million in funding over 5 rounds. Their latest funding was raised on 26 August 2020 from a Venture – Series Unknown round.

Neon is funded by 9 investors. TX Group and Helvetia Venture Fund are the most recent investors.

 

Is neon a bank?

neon is not a bank, it is a fintech company that offers a digital-only banking service.

neon accounts are managed by Hypothekarbank Lenzburg which is a licensed and regulated Swiss mortgage bank.

 

Regulated associations

Through its partnership with Hypothekarbank Lenzburg, neon is regulated by the Swiss Financial Market Supervisory Authority (FINMA).

FINMA is the Swiss government body responsible for financial regulation. This includes the supervision of banks, insurance companies, stock exchanges and securities dealers, as well as other financial intermediaries in Switzerland.

 

Registered customers

2020 : Approximately 33 000

 

Who can open a neon account?

neon is only available in Switzerland to Swiss citizens and foreign residents who have Swiss domicile (legal residence).

You must be 16 years and older to open a neon account.

You need a valid identity document if you are a foreign citizen from certain countries (check neon’s website for more details).

You need to be taxed exclusively in Switzerland. If you move away or work abroad (not paying tax in Switzerland), you need to close your neon account to avoid paying a high monthly fee.

 

neon products

neon offers a free personal bank account for everyday banking needs and international transfers, supported by a debit Mastercard. All banking transactions are done via a user-friendly app.

 

neon banking cards

neon provides you with a bright pink debit Mastercard which is connected to your neon digital account. You can use your neon Mastercard for online and in-person purchases as well as for cash withdrawals.

 

neon fees

neon accounts are free to use in Switzerland. There are no additional card fees, no recurring fees, no usage fees and no fee to block your card if it is lost or stolen when used domestically.

Neon charges 10 CHF for your first debit Mastercard and 20 CHF for a replacement card.

When using your debit Mastercard while working or on holiday abroad, you pay the Mastercard mid-market rate. There are no additional fees for using the neon app while abroad for everyday digital transactions.

If you leave Switzerland for good without settling and closing your neon account, you are charged a 40 CHF month fee until it’s closed.

 

neon limits

Daily withdrawal limit up to 1 000 CHF in cash, 5 000 CHF in-person and 5 000 online.

Monthly withdrawal limit is 10 000 CHF.

Daily transactions limit using the neon app is 24 000 CHF.

 

Currency

neon currently only offers accounts in Swiss Francs (CHF).

neon has partnered with TransferWise which allows you to send money to 20 different currencies zones.

 

Languages

neon’s website, mobile app and customer support is available in English, German, French and Italian.

 

neon is best digital bank for

neon is ideal for small- to medium-sized businesses and the self-employed, freelancers and entrepreneurs as well as individuals who are digitally-savvy and happy to bank using only a mobile app in exchange for faster, cheaper and more convenient banking.

 

Customer support

Customer support via mobile app, phone and email in four different languages.

 

How to open a neon Switzerland bank account

Download the neon mobile app; available on both Android and iPhone

Provided required personal details; name, address, phone number and email address, place of origin, nationality and civil status

Answer a few legal questions required of anyone who opens a Swiss bank account

Accept neon’s terms and conditions

Verify your identity via a video call; have your ID ready and find a quiet time to make the video call

Choose a 6-digit login code; enter it and validate it

You can start using the neon app as soon as your account is registered and you have been issued an account number; this takes about 2 working days

You should receive your neon debit Mastercard via the mail within one working week from date of application

Log into the neon app using your contact number and the login code you chose

Deposit funds into your account, set up your beneficiaries to make payments and define recurring payments using the neon app

Either transfer funds into your neon account using the mobile app or deposit cash at Swiss Post using a payment slip (there is a fee for cash deposits).

Your account details can be found under Profile – Banking information

 

What does neon offer its customers?

Personal account

For your everyday banking needs such as salary deposit, online and instore payments, leisure and entertainment and international transfers.

No base fees

Deposit insurance up to 100 000 CHF

Accounts payments managed by Hypothekarbank Lenzburg

 

Neon debit Mastercard

Neon automatically sends you a debit Mastercard when you open an account.

Your PIN number is sent separately by mail and you can change it at any ATM.

You activate your neon Mastercard by checking your balance at an ATM; it will soon be possible to change your neon PIN directly in the app.

The cost is 10 CHF for the first card and 20 CHF for a replacement card.

It takes about a week for your debit card to arrive by mail.

The neon Mastercard is available for Google Pay and Samsung Pay.

The current daily transaction limit is 30 000 CHF; you can withdraw up to 1 000 CHF cash per day, spend 5 000 CHF online and 5 000 CHF in stores every day but your monthly maximum limit is 10 000 CHF.

Call the neon emergency number for a lost or stolen neon card: +41 (0) 43 508 03 19

 

Mobile app

All neon transactions are done via its user-friendly mobile app. neon does not have brick-and-mortar branches or an ATM network.

 

Borderless account for international transfers

Save up to 5% on international payment and transfer fees.

Faster payments with TransferWise and no intermediary banks that slow down the process; 25% of neon payments arrive in a few minutes.

The TransferWise fee consists of a small fixed fee and a variable percentage fee; the larger the amount, the smaller the percentage.

TransferWise converts international payments using the market (mean) exchange rate.

You can transfer money in 20 currency zones with no exchange rate surcharges.

All international transfer fees are displayed in the app for you to view before making the transaction; there are no hidden fees.

 

Online payments

Shop online with your neon debit Mastercard as you would with any banking card. Use your card number, validation code (CCV) and the expiry date to confirm the online payment.

 

Free cash withdrawals with Sonect

neon customers don’t have to find an ATM to withdrawal cash. You can use your Smartphone to withdraw cash at over 2 300 Sonect partner shops. Sonect is a network of virtual ATMs.

The first two cash withdrawals in Switzerland with Sonect are free. After that, they are 2 CHF per withdrawal.

Cash withdrawals abroad cost 1.5%.

 

TWINT Prepaid

You can sync TWINT Prepaid to your neon account; choose Hypothekarbank Lenzburg as the link bank.

TWINT is an app for making payments and also has other practical functions. You can make convenient and secure payments with your Smartphone to friends and in online shops and app stores as well as at cash registers, vending machines and parking meters.

 

Bill Pay and eBills

Set up eBill via the Profile tab in the neon app.

eBill is an electronic version of a paper bill. An eBill arrives from a biller into your Bill Pay account the same way a paper bill arrives in your mailbox. Bill Pay allows you to view all your eBills as well as account balances, transactions and statement information in one convenient place.

 

Swiss deposit insurance

Funds deposited by neon customers are protected by Swiss deposit insurance up to 100 000 CHF in the unlikely event that neon goes bankrupt. neon accounts are managed by Hypothekarbank Lenzburg and funds are kept in a segregated account separate from neon’s own operating funds.

 

neon Privacy Policy

neon collects customer information only for marketing and analysis purposes to help streamline its banking services. neon does not forward or sell your private information to any third-party unless required to by law.

 

neon Green

neon Green was launched so all neon customers could make a difference by supporting a global tree planting project that is critical to reduce CO2 emissions. You can support neon Green by making a donation. In return, you receive a free debit Mastercard which is a lovely bright green colour.

For every 100 CHF you spend on your neon Green Mastercard, a tree will be planted by Eden Reforestation Projects which operates in Haiti, Indonesia, Kenya and Nepal.

 

Apple PayComing soon to neon

 

How much does it cost to bank with neon?

Account base fee Free
Domestic payments (CHF) Free
International transfers At mean exchange rate (0.8- 1.7% fee)

No exchange rate surcharge

Debit Mastercard First card is 10 CHF

Replacement card is 20 CHF

No monthly fee

Free domestic purchases (online and instore)

Domestic cash withdrawals at any ATM 2 per month for free; then 2 CHF per withdrawal

 

International cash withdrawals at any ATM 1.5%

0% exchange rate spread

 

Is it safe to use neon?

neon is a fledgling fintech company but it is backed by a leading Swiss mortgage bank which is licensed and regulated by FINMA. All neon accounts are managed by Hypothekarbank Lenzburg and therefore subject to stringent Swiss banking laws. This includes deposit insurance up to 100 000 CHF in the unlikely event that neon goes bankrupt.

Neon has added safety measures to protect your money, including the proven and tested two-factor authentication feature. This means you can only make payments from your own Smartphone using neon’s user-friendly and secure app which also comes with finger authentication.

For lost, stolen or misplaced banking cards, neon customers can instantly block or disable their debit Mastercard by phoning the emergency number. Customers will soon be able to do this using the neon app. The same applies if you suspect your card is being used for unauthorised payments or purchases.

neon customers receive real-time alerts of any transaction any time of the day via the neon mobile app. Call the neon emergency number if you see any unauthorised or suspicious payments off your account.

neon collects your personal information purely for marketing purposes and spending analysis. It does not forward or sell your private information to any third party. All account information is held in Switzerland by neon’s banking partner, Hypothekarbank Lenzburg.

 

Pros and cons of neon

 

Pros

neon appeals to new-age customers who are comfortable with a totally digital banking app and want a simple, fee-free account for spending and payments with no hidden fees.

A neon personal account can be opened in minutes via the website or the user-friendly mobile and applicants are not subject to a credit check. Only personal information needs to be verified. This means that people with a poor banking history who have previously had a bank account closed by a traditional bank are not penalised for past issues.

The purpose of digital-only banks are to offer a faster, simpler and significantly cheaper banking solution. It doesn’t have bricks-and-mortar branches or an ATM network and it doesn’t offer high-risk products such as credit cards, loans and mortgages. These cost savings are passed onto neon customers in the form of zero base fees and low transactional costs.

 

Cons

neon is a digital-only bank and all mobile transactions are done via an app. This means there are no neon branches, no ATM network and no-one you can speak to face-to-face if you have a query or problem. Customer support is provided via the mobile app, phone or email.

Cash deposits can only be made through Swiss Post and there is a fee for this.

neon offers customers a digital financial solution that is convenient, faster and cheaper than traditional banks. However, neon only offers a personal account and no business or joint account. Neon also does not offer a credit card, loans or mortgages. If you need a full-service banking solution, you’ll find that what neon has to offer is limited.

neon is only available to Swiss citizens or foreigners living in Switzerland who have legal residence and pay tax exclusively in the country. If you move abroad or leave the country, you need to close your neon account or pay a high monthly fee to keep it open.

 

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IN SUMMARY

The Swiss-based challenger bank Revolut, Starling Bank and Monese to offer a new generation of customers a faster, more convenient and cheaper way to bank. Neon is part of a growing market segment that is disrupting how people bank and so far, is exceeding expectations with a rapidly-growing customer base in Switzerland.

neon has partnered with giants in the industry to offer a complete digital banking solution. This includes Hypothekarbank Lenzburg for account payments, Mastercard for its debit card, TransferWise for international transfers and Sonect for cash withdrawals. The fintech concentrates on delivering a superior digital banking platform and relies on its partners for seamless and cost-effective payments, transfers and withdrawals.

Neon is a fledgling business but is already regarded as the best digital-only bank in Switzerland. You have peace of mind that neon is safe to use as its accounts are managed by Hypothekarbank Lenzburg which is a licensed and regulated bank and subject to stringent Swiss banking laws.

 

Author Details

Louis Schoeman

Louis Schoeman

Featured Forex and Stocks writer

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