Europe) Already in 2015 N26 decided to apply the payment model of online banking platforms to online banking. streaming. Its customers can choose between a variety of existing plans, from a free bank account to additional services such as travel insurance or shared accounts, and pay a monthly fee in exchange for established services.
Many non-banks now want to adopt this subscription banking model, similar to the Netflix model, to avoid charging fees. This model offers a free plan with basic banking (account and card without commission), and if the customer needs or prefers to have a number of additional services, he can subscribe to one of the different plans that are paid monthly.
“The victory of the subscription banking model over the traditional M&S model is that this model ensures transparency and allows users to choose the plan that best fits their lifestyle, providing a more personalized banking experience,” Ignacio says. . Zunzunegui, Revolut’s head of growth for Southern Europe.
This approach allows non-banks to compete more effectively in the financial market, offering customers more flexibility and control over their bank accounts. Just as Netflix revolutionized the entertainment industry with its subscription model, neobanks hope to do the same in the banking sector.
Which non-banks already use this system?
Revolut is the largest neobank in the world. It offers five subscription plans. Free, which allows you to perform basic operations (account and card) without costs. From there, it opens up a series of four higher plans that offer additional benefits: the Plus plan (€3.99 per month), the Premium plan (€8.99 per month), the Metal plan (€15.99 per month) and the Ultra plan ( ). 45 euros per month). According to sources at the organization, payments for the plans have risen by 40% in the past year as customers increasingly use them as their primary account. Premium plans offer a subscription to the Financial Times, WeWork, access to airport lounges or the option to invest in a mutual fund that offers higher returns than the smaller plans.
Along the same lines, the N26 has four plans. One is free, the Smart plan (costing €4.9 per month), You (priced at €9.9 per month) and Metal (€16.9 per month). Among the benefits of the most expensive plans is travel insurance, which covers flight cancellations or delays, baggage or emergencies during the trip. Also your mobile phone insurance. In addition, the most premium plan also rewards the customer’s account balance at the rate of 4% compared to 2.26% offered by the rest of the plans.
Other neobanks, such as Monese and Vivid Money, which are becoming more popular, are also betting on the subscription model. In this case, the benefits are related to financial transactions, such as receiving cashback of purchases made or improvement of conditions when carrying out certain operations.
“The subscription model responds to a new way of consumption in society. People no longer want to pay for unnecessary services, do not understand and do not agree with the existence of non-transparent commissions. We believe that this is a model that will evolve, but not all entities will be able to implement it successfully. The high costs and outdated infrastructure maintained by some banks will force them to continue to demand minimums, links and conditions,” N26 representatives explain.