Blog
10. August 2022

neon is bringing you cheaper and faster international transfers

You know we like our banking affordable and fast. Not exactly the two things that banking is known for. This is also true for international transfers, which is why we’ve only offered Euro payments until 2020. That’s when we found a way how you can save up to 5% compared to traditional offerings, see the fees displayed transparently in the app at all times and have your money delivered speedily. All this is possible thanks to our partnership with the innovative FinTech Wise. 

Save time

Save money

Calculation of fees

Wise's model

All the possible currencies

FAQ

How much faster we are

Currently, 97% of all transfers arrive within 24 hours. And 63% of all transfers even arrive within 10 minutes. That’s a lot faster than what you are used to from traditional banks. How, you ask? Well, both Wise and we at neon have chosen the Hypothekarbank Lenzburg as our banking partner in Switzerland. Meaning there are no intermediary banks that slow down the process. If you do a transfer right now, your money will have arrived abroad by the time you finish reading this blog – depending on how fast you read, of course ;-). 

How much you save on fees

We are significantly cheaper than traditional providers and veeeeeery close to the FinTech specialists in this field. But in the end, it all depends, of course. On the currency and the amount. Rule of thumb: the more «unusual» the currency, the more you save. Here’s an example.

Suppose you want to buy a beach house in the Philippines. Now, you don’t want to pay everything in one go, so you decide to send an advance of 1’000 CHF. Of course, the owner of the house can’t do much with your valued CHF, so the money needs to be converted into Philippine Pesos (PHP). (PHP).

Now, as you can see, if you send that money through us, 57’887 PHP will arrive on the seller’s account. And that’s all your fees already subtracted. (We’ll get to the fees in detail in a minute.) On the other hand, by sending money through another provider you would lose up to almost 3'800 PHP or 69 CHF. That’s already quite a bit of money with which you could easily buy some nice things for your veranda. A hammock or some palm trees, for example. Of course, the exchange rate changes all the time, so if you want the most up-to-date comparison possible, go to an independent comparison website like monito.com.

As mentioned, the differences in price vary according to the currency. With Euro transfers, the difference is smaller. This is because Mr. and Mrs. Swiss do much more transfers in Euros than they do in Philippine Pesos. Still, if you use neon, you will save money on Euro transfers, too:

And how exactly are the fees calculated?

The fee is divided into two parts: the Wise fee and our convenience fee. The Wise fee consists of a small fixed amount and a variable percentage of the amount you transfer. Wise adjusts their fees from time to time, but they are always very competitive and, of course, very low in comparison. As for the convenience fee: This fee is set at 0.4% and is charged by us. Why? So that you can conveniently send money abroad in a matter of minutes –directly from your neon app. In other words, for convenience. What you won’t find here are exchange rate mark-ups. Because we are using the middle rate of exchange, you can save a lot of money with us. How can we afford this, you ask? Because in our partnership with Wise, we simply do things differently.

What is Wise’s model?

The traditional model for international transfers works mostly via intermediary correspondent banks. This means a transfer from here to Thailand can be rerouted through multiple banks (see graphic), making the whole process slow and expensive because every bank processes the payment and takes a small cut for itself.

This is why Wise chose to cut the intermediaries and set up local accounts in a number of countries. As a result, you transfer money to a Wise account in your own country, Wise converts it using the middle rate of exchange and then transfers that amount to their local account in the destination country, from which they eventually send it to your chosen recipient. This uses two domestic payments which are both faster as well as cheaper. Even with the fees mentioned above, we’re still cheaper. And that’s how we like our banking. That’s why Wise is a fantastic match for neon. We just click.

What currencies can I send?


FAQ

What about other currencies?
We’re working on offering more currencies via Wise. Some currencies have very specific local requirements, making their implementation more complex. As always, at neon we start with a good foundation and then build up from there. Like this, you can start saving while sending money abroad.

Ok, cool, so I could just open a Wise account?
Yep, sure. Or you already have one. Then you can transfer money from your neon account to your Wise account and send it on from there. Doing so allows you to save the 0.4% convenience fee. It takes a little longer because there’s a second transaction involved. And you need to have two apps and make two transfers. That’s why we call our fee the convenience fee. Because it’s just so much more convenient to do it in fewer clicks directly from your neon account.

Can I transfer money to a crypto exchange with this?
No, you can’t. Wise’s Acceptable Use Policy doesn’t allow it. But there is a little trick: you can transfer your neon money as euros into your crypto account via «Domestic payment». For this, the account simply has to be in the SEPA area. Please note: A 1.5% exchange rate surcharge applies here.

Can I set up recurring international payments?
At the moment, you can only make one-off payments. However, we’re working with Wise to set up recurring payments as well.

Can I send US dollars to Germany?
At the moment, you can only send the local currency to a country. So you can only send US dollars to the US. For Germany, you would have to use euros. However, we’re hard at work on a solution to this and will be able to give you an update very soon.

What questions do you still have for us? Write to us: service_at_neon-free.ch
 

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