Moving to a new country can be daunting, especially when it comes to managing your finances. Switzerland, in particular, is known for its strict banking regulations and high fees. That's where Revolut wanted to come in a couple of years back. As one of the most important challenger banks in Europe, Revolut promised to make converting and keeping money a breeze. In this post, we'll explore the limitations and downsides as well as the benefits of using Revolut as an expat in Switzerland. This article targets expats who are tech-minded people like software developers and scientists. If you always want the edge in terms of banking, this is the Revolut review for you.

Everyone else is praising Revolut to the high heavens, we will not.

We will also discuss what to expect in Switzerland's banking system in 2023.

Switzerland is catching up

Switzerland is a bit behind on modern consumer banking compared to other countries in Europe. For instance, many of the features that are common among European banks and financial institutions, such as low foreign exchange rates, are not yet widely available in Switzerland. Additionally, most Swiss banks lack adequate mobile apps, which makes it difficult for people to access their accounts from their smartphones.

The good news is that many fintechs have been making waves in Switzerland over the past couple of years, and it looks like they're here to stay. Like Revolut, new fintechs like neon, Yuh, Yappeal or Zak offer a broad range of services, including multicurrency accounts with built-in foreign exchange (FX) capabilities at attractive rates and great mobile apps. Additionally, they have a variety of budgeting and savings tools, as well as online support in English.

Revolut still has its place in Switzerland in 2023, but there are some serious downsides to using Revolut in Switzerland as well. Some important Swiss features such as the ability to scan the Einzahlungsschein (ESR) or use the Swiss direct debit system (LSV) are still unavailable on Revolut and will probably never appear. Additionally, you will have to answer questions from Revolut about your finances at least once a year and send documents such as tax returns abroad, which may not be ideal for some customers.

Read on to find out if Revolut is right for you as a Swiss user!

Disadvantages of using Revolut in Switzerland

Revolut has significant issues in Switzerland and in recent years, Revolut has not focused on the Swiss market at all. The current trend is not so positive, so until 2025, I do not expect many improvements. Here are the disadvantages and limitations you must keep in mind when using Revolut as an expat in Switzerland:

• No Swiss IBAN.
• Not possible to receive your Swiss salary (in most cases).
• Revolut freezes accounts randomly and holds your money for months in extreme cases.
• Revolut asks for documents that are none of their business, sometimes forcing you to break the law or contracts by revealing information to Revolut that you are not allowed to share with anyone, including Revolut.
• Less convenient than using a Swiss counterpart like neon or Yuh.
  

Benefits of using Revolut in Switzerland

Now that you have been warned about the danger of using Revolut in the first place, let's talk about the good stuff!

First and foremost, Revolut offers a multi-currency account that allows you to hold and exchange 28 currencies. This is especially useful for expats, who often have to deal with multiple currencies. Instead of exchanging money at a bank, which can come with high fees, Revolut gives you the ability to exchange money on its app for significantly lower fees than any traditional bank. This means that you can save money on currency exchange when moving to Switzerland.

Here is an overview of the benefits of using Revolut as a Swiss user:

• Great exchange rates, better than Swiss offerings at the moment.
• One of the best mobile apps in the finance and banking industry.
• SEPA Direct Debits possible within EEA (with LT IBAN).
• SEPA transactions from and to an EEA account (with LT IBAN).

From 2015 to 2023: Not all is gold that glitters

Revolut was one of the first real challenger banks in Europe of this current generation and one of the loudest. After all, the name Revolut itself was sort of a promise.

Revolut has often promised to serve everyone in Europe, but over time they realized of course that this was not necessarily realistic in every aspect. Nowadays, while users residing in Switzerland are supported, you won't even find Switzerland anymore in the country selection of Revolut's website.

The countless instances of Revolut randomly locking up innocent people's accounts for weeks or months who believed in Revolut being the friendly revolution is just one of the many examples of why you should never trust all your money to a fintech like Revolut (or Wise and countless others for that matter).

Warning: Revolut often locks up accounts and keeps your money

In 2020, one Revolut customer found himself locked out of his account containing over 100,000 Swiss francs. All attempts to contact Revolut were unsuccessful and despite numerous requests from the user, the company refused to provide any explanation or timeframe for a resolution.

In another case, Revolut suspended and then terminated an account associated with Priorité Energie. The account held €300,000 and was used to fund a government initiative aimed at assisting low-income households in Paris with the insulation of their homes. This caused the company to be unable to pay its employees.

This has never happened to me personally (yet) but to many people in my network. So it is real and even if the chance is not high that it will happen to you, it's not that unlikely either.

Now you may ask: Why did Revolut do all this?

In its attempts to save money, Revolut sought to utilize AI technology in order to automate much of the banking process and customer service. Unfortunately, the attempt fell short as the automated AI made too many wrong decisions and failed to provide adequate customer support and account management to fix things.

And of course, Revolut did not have enough human manpower to fix the errors made by the AI in time.

So people remained separated from their money for quite a while.

Too bad if that's your only bank account and you are bankrupt for a while just because you chose the wrong "bank" account.

Your landlord might not understand and kick you out, because Revolut locked you out of your account.

Revolut is not even a licensed bank in some countries

Despite having a large presence in Europe and the UK, Revolut had no banking license in most countries for many years. This meant that customers did not have access to the same protection as other traditional banking services such as FDIC or the Financial Services Compensation Scheme (FSCS). As a result, customers were taking a major risk when trusting their money to Revolut.

Furthermore, Revolut was also unable to offer certain services such as banking loans or overdrafts. Additionally, customers were also sometimes excluded from consumer protections such as chargeback policies and refund protection for purchases made with their account balances.

Due to these limitations and risks associated with using Revolut, many expats living abroad opted for more traditional banks instead. Even though Revolut provided an easy and convenient way to manage money while abroad, it lacked the financial stability that traditional banks offered.

Revolut has only been a bank since 2021

Since 2021, Revolut has finally started to make steps in the right direction towards becoming a regulated bank. It has applied for banking licenses in several countries, including France, Italy, Spain, Portugal, and Lithuania. A banking license is an important step forward as it means that Revolut can now offer customers more traditional banking services such as overdrafts and loans. Hopefully, it will mean that the company becomes more reliable in terms of providing its clients access to the funds as well.

Full banking licenses in specific countries should also give Revolut's customers better consumer protection. This includes offering chargeback policies for purchases made using their account balances and refund protection for certain transactions. Additionally, if customers have deposits with Revolut they will have the added security of FDIC (in the US) or FSCS coverage (in the UK) up to specified limits in certain countries.

These advances mean that Revolut is now at least trying to become a legitimate banking service provider – something that was previously only possible through traditional banks.

Use Revolut only in addition to other bank accounts

The prior incidents were a clear indication that even in 2023, users should be wary when dealing with fin techs like Revolut as the company still has no reliable way of providing any sort of customer protection or guarantee if something goes wrong. If something goes wrong, you could be screwed if you rely fully on service providers like Revolut or Wise.

Never ever put all your money into a fintech account like Revolut or Wise!

Important Swiss features are missing

Revolut has made strides toward becoming a more legitimate banking service provider, but it still lacks many important features that are relevant for Swiss users. For example, there is still no Swiss IBAN of your own to transfer CHF reliably without unpredictable fees. If you use the GB/LT IBAN for CHF transfers, there will often be hidden correspondence bank fees since it’s a SWIFT transfer. Additionally, Revolut does not currently support the ability to scan the famous Einzahlungsschein (ESR) nor use the Swiss direct debit system (LSV) nor the newer eBill. eBill is like LSV just much better and will eventually replace LSV. Without these features, using Revolut as a primary banking service for Swiss users is practically impossible.

Overall, while Revolut has made significant progress toward becoming a legitimate banking service provider, it still falls short of what traditional banks offer. As such, it is important to remember that Revolut should only be used in addition to other bank accounts and not as the sole source of banking for Swiss customers. It is also important to be aware of the limitations of what Revolut can currently offer so that users are not put at a disadvantage if something goes wrong. With these considerations in mind, Revolut can still be a useful financial tool for Swiss customers.

Expect to answer Revolut’s questions on a holiday

Finally, you will have to send documents about your finances (tax return, etc) to Revolut sometime every year. They literally asked us on Christmas Eve (Dec 24) about this last year. Not very nice to fear getting your Revolut account locked while you are on Christmas vacation and then having to send very sensitive documents abroad (Revolut being very cheap, these documents might easily land anywhere in the world in some call center/sweatshop outside of the EEA).

Overall, it is therefore not recommended to use Revolut as your main or only account if you live in Switzerland.

Insurance from Revolut may not work for you

In the past, Revolut was caught selling insurance as part of their premium package. When somebody living in Switzerland then wanted to file a claim they found out that this insurance does not cover people living in Switzerland, not even if the claimed damage happened in the EEA.

So you might be paying for an insurance sold by Revolut that you will never be able to use, just because you live in Switzerland.

Only with Revolut UK: Convert money from CHF into EUR or USD at top rates

This only works if you have a Revolut UK account ("the old one") or if you have a Swiss IBAN available to transfer your CHF to in order to charge your Revolut account. If you sign up anew for Revolut in 2023, chances are you will be with the Lithuanian Revolut entity which does not offer the Swiss IBAN for transferring CHF into Revolut. If you are with Revolut LT, this will unfortunately not work as nicely anymore and fees will be different.

The killer use case is probably: You get your salary in CHF, but now you still have to pay bills in EUR or USD in your old country. You don't want to pay the hefty 2-3% that normal banks charge.

Using Revolut, customers in Switzerland can easily convert their money from CHF into EUR or USD at better fees than traditional banking services. This is because Revolut offers incredibly competitive conversion rates and low to no fees for certain exchange transactions. Furthermore, the process of converting is incredibly simple and straightforward with Revolut. All you need to do is select the CHF-EUR pair from the list of currencies on their account, enter the amount of CHF they want to convert, and then click 'convert'.

While neon, Yuh and some others in Switzerland have been catching up a bit, Revolut still offers the best rates for sending other currencies than CHF abroad for many people.

As long as you stay below 1'250 CHF to be converted each month and ensure that all conversions are done from Monday till Friday, Revolut will give you probably the best rates you can get on the market for major currencies like Euros, US Dollars and British Pounds. If however, you have more money to convert each month or you are converting to less common currencies, e.g. the Thai Baht, the situation might look different and you could find better fees elsewhere. And using cryptocurrencies for international transfers might be an option to look into as well.

Alternatives: neon and Yuh also offer pretty good rates to convert CHF to EUR

If you open a new account with Revolut these days as a European user (except UK), you will typically have an account with Revolut Lithuania, in short Revolut LT. This means that converting CHF to EUR is not quite as easy as you can not directly send your CHF from your main salary account to another Swiss CHF account. So typically you might end up using the SWIFT system to send the CHF to Revolut LT and that has way too high cost, plus the hassle.

In this case, it is more advisable to use "properly Swiss" solutions like neon and Yuh. Their rates are a bit higher than what Revolut would give you - in theory. In the end, as a Revolut LT user you would have to factor in the fees for transferring CHF to Lithuania, and then the math often does not add up for transfer up to 1'000 CHF.

Use Revolut for all your SEPA Direct Debits

Especially if you are from another European country, you might want to or have to use SEPA Direct Debits.

SEPA Direct Debit is a way to pay for things which is now common in many EU countries. You can use it with Revolut, which makes it easier and cheaper to send money to other countries in Europe by allowing companies to debit your Revolut account directly. Revolut's exchange rates are very competitive and they have no fees for SEPA Direct Debits. This makes it a great option for sending money to other countries in Europe.

With Revolut, customers in Switzerland can enjoy SEPA Direct Debit with the same features that come with traditional banking services offering SEPA Direct Debit - but at much more competitive prices and more reliability than with Swiss banks.

There is one particular problem to keep in mind with Switzerland: While you will find Swiss banks that do offer SEPA Euro accounts and SEPA Direct Debit, not all banks in the EU/EEA actually support SEPA Direct Debits to non-EEA countries. Confusingly, Switzerland is part of SEPA, but some black sheep among the EU banks have decided to rip you off by denying SEPA Direct Debits altogether or charging extra fees when for payments between EU/EEA SEPA countries and non-EEA SEPA countries such as Switzerland or the UK.

Right now, it is not very common for non-EEA SEPA payments to have extra charges. But this might change in the future and you might have to pay more. So it is always advisable to check the exact fees for any payment you make and whether or not there will be extra charges.

Also, keep in mind that some banks don’t support SEPA Direct Debits for payments between EU/EEA countries and non-EEA countries like Switzerland or the UK. It is important to check if your bank supports these types of payments before making a transfer. That way, you can avoid any unexpected additional costs or complications.

Send fee-free SEPA EUR transactions in the EU/EEA

While Switzerland is part of SEPA and Swiss banks offer SEPA Euro accounts as well, transactions between Switzerland and the EEA banks are not always fee-free. SEPA was created to move around Euros without fees across all SEPA countries, but the reality is: This only works within those SEPA countries that are in the EEA.

If you send money from a SEPA Euro account in Switzerland which is not part of the EEA to a bank account in the EEA/EU, the receiving bank may charge additional fees. While many banks do not do this, some banks charge between 10 and 20 euros whenever you send money from non-EEA countries like Switzerland into the EU/EEA even when using SEPA.

Track spending habits in the Revolut app

In addition to offering competitive conversion rates, Revolut also saves customers money by providing them with an insight into their spending habits. By tracking all transactions in real-time using its intuitive dashboards, users can quickly identify areas where they can cut down on unnecessary expenses and save more money. Additionally, customers can also set up notifications that alert them when a transaction exceeds a certain amount or if there is a sudden change in currency exchange rates so they can take advantage of potential savings opportunities.

This will only be a real benefit for you though if you use Revolut a lot, which again, as a Swiss user is no longer recommended. For everyday purchases, the cards from neon and Yuh are the better options these days.

You can't receive your Swiss salary on Revolut

Revolut is good for exchanging money, but you cannot use it as an account to get your salary if you are in Switzerland, at least in most cases. That's because Revolut does not support Swiss IBAN numbers, which are typically needed to get your salary.

In the old days of Revolut UK, you could use a collective Swiss IBAN at Credit Suisse but needed to put your Revolut account number in the reference field, something that not every employer supported. Nowadays, you will typically open an account with Revolut LT (Lithuania) which does not even support the collective CS Swiss IBAN.

Swiss banks are slow but not entirely asleep

Finally, it's important to note that Switzerland's banking system is evolving. The Swiss government is working on modernizing its banking regulations to attract more digital banks like Revolut. They are also working on implementing Instant Payment - a technology that would allow for near-instantaneous transfers of money between Swiss and Liechtenstein accounts in CHF. These changes are set to be fully implemented by 2023. This will make innovative fintech accounts like Revolut less important than before. Swiss fintechs like neon, Yuh, Zak and CSX further decrease the dreaded foreign exchange fees that everyone had to deal with in Switzerland until recently.

Moving to Switzerland can be a challenging process, especially when it comes to managing your finances. With its strict banking regulations and high fees, finding the right kind of bank can seem daunting. But with the growth of modern banking apps, like Revolut, neon and Yuh managing your money in Switzerland is becoming much easier.

Stay away from traditional Kantonalbanken in Switzerland

Traditional cantonal banks in Switzerland have a long reputation as being reliable. But they also have the worst mobile apps and websites. And it is not like all modern banks are unreliable or have questionable practices like Revolut.

Revolut has been the subject of numerous questionable practices in recent years. In 2018, FCA imposed a £8.9 million fine Revolut for failing to properly monitor transactions related money laundering and terrorist financing. Additionally, in March 2020, Revolut was fined by the Central Bank of Ireland for inadequate customer due diligence processes.

You do not have to use a Swiss Kantonalbank to avoid these issues. The modern Swiss fintech challenger bank offerings like neon (Hypothekarbank Lenzburg) and Yuh (Swissquote Bank) are built upon robust Swiss banks that have existed for many years, have not been involved in any major scandals and there are no reports about bank accounts being frozen for long or for illegitimate reasons.

Swiss Kantonalbanks on the other hand sometimes are more flexible in opening a bank account if you don't have all your papers in place yet, but if you ask me, you don't want to use their apps or websites every month.

Most Swiss users are better off staying away from Revolut now

Most Swiss users are better off staying away from Revolut due to the company's history of questionable practices and numerous fines. For instance, in 2018, FCA imposed an £8.9 million fine on Revolut for failing to properly monitor transactions related to money laundering and terrorist financing. Additionally, in March 2020, the Central Bank of Ireland fined Revolut for inadequate customer due diligence processes.

Despite these issues, Revolut is still a popular option for advanced users with a bit of risk appetite to do international transfers and foreign exchanges as it offers competitive rates. However, Swiss users should be aware that Revolut does not support Swiss IBAN numbers which are typically needed to receive salaries from Swiss employers. Additionally, there are more robust Swiss banks offering similar services that have not been involved in any major scandals.

In summary, while Revolut may be a good option for those with international needs and foreign exchange requirements, most Swiss users will find better options by choosing one of the Swiss fintech offerings available, especially Yuh and neon.

As an expat in Switzerland, use a challenger bank instead of a traditional one

Overall, it is recommended that expats in Switzerland make use of the modern challenger banking options available in Switzerland such as neon and Yuh. Revolut is also still a great addition in 2023 for expats in Switzerland on top of the genuinely Swiss offerings. Keep in mind that Revolut is not reliable enough and has had severe complaints from its beginnings until today. Revolut can not replace your main Swiss bank account since Revolut is not a Swiss account, even if it does partially support CHF as a currency. More and more Swiss expats use neon and Yuh entirely as their main or only Swiss bank account while avoiding Revolut altogether.

While your main account in Switzerland must be a different account like neon or Yuh, Revolut can still a great addition to save on FX fees and make transfers and direct debits to the rest of Europe using SEPA. If you wanted it all in one, Yuh is probably the closest equivalent of Revolut while Yuh is based on a real Swiss bank.  Both neon or Yuh offer competitive rates, modern mobile apps and websites, and robust customer due diligence processes that ensure your money is safe.

As Switzerland's banking system evolves, Revolut will lose importance. It is clearly visible that Switzerland is not a priority on Revolut's product agenda. So, if you're moving to Switzerland or looking for a better banking option, be sure to give neon and Yuh a try as well as Revolut.

Try Yuh instead

You can try out Yuh for free immediately.

Download the app first and then use my code dzuwf3 to get a discount in the form of Swissqoins.



Or try neon (my favorite)

Signup to neon is quick and easy. The on boarding works through a video call like with most digital offers these days, so you don’t need to go anywhere. The only limitation is that you live in Switzerland. Use the code JEDUEX to get 10 CHF for free added to your account.