The Neon application has been a hot topic in the Swiss banking world in recent months. Intrigued, we have created an account for ourselves and in this article we’d like to introduce you to this application.
We had already written an article on the best banks for Swiss travellers. At the time we wrote that article, the conclusion was clear: in Switzerland, the land of banks, we were clearly lagging a little behind our neighbours in terms of mobile banking. We’re not going to lie, the number of players in the market is not yet huge, but Neon has really “changed the game” for Swiss travellers if you ask us. Here’s a little overview of this new mobile bank…
Neon: Presentation of this Swiss neo-bank
Neon is not a bank per se, but a mobile bank account management application. Neon does not have a banking license directly, but works with the Hypothekbank in Lenzburg, which has a Swiss license.
This start-up was born in 2018 and, after a beta phase, officially launched on the market at the beginning of 2019.
With its very pop design and above all its 100% mobile model, it has made a major contribution to establishing the old-fashioned spirit of the “classic” Swiss banks. Highly competitive and, above all, very transparent rates are their main marketing tool.
Besides that, the bank is also working on its young and dynamic image. We immediately forget the old clichés about bankers in suits and the big moustache. If there are moustaches at Neon’s, it’s rather a hipster version and hoodies seem to replace the tie. You can’t judge a book by its cover and I must admit that this “fresh” touch in a somewhat “austere” area is good. 🙂
The features of Neon
The big advantage of Neon is to be connected to a “real Swiss bank”. This means that you have a Swiss IBAN to which you can transfer money free of charge, but more importantly, the funds are guaranteed by the banking license of the mortgage bank in Lenzburg. At card level, Neon automatically issues a MasterCard.
This “real bank” status also allows access to all the classic functions of a bank (which many Neo-Banks do not necessarily allow). In the functionalities we find for example:
- Withdrawals from ATMs in Switzerland and abroad
- Payments by bank transfer in CH and abroad
- An account to receive payments or even one’s salary
- Payment slips or IBANs can be scanned.
- You can set up standing orders or use eBills (very handy if you’re travelling!).
- Everything can be managed from the smartphone (card blocking, in particular).
- Google Pay and Apple pay are apparently in development and should arrive soon.
Other functions that are more “gadgets” but that we think are cool:
- You can sort your expenses with keywords (very handy when travelling and then draw up a budget based on the type of expense).
- You can take a picture of a receipt or a bill to save it directly with the transaction (it makes life easier for expense reports)
- Money can be withdrawn free of charge at kiosks and shops within the Sonect partner network.
- Quick login with fingerprint
By opening an account, you can use our referral code “novomonde” and receive a welcome credit of 10 CHF. (even 20CHF until 27.05.2020)
Prices and bank charges for Neon
As I said before, the prices are very transparent. In our opinion, Neon is currently the best offer on the Swiss market for travellers! Not everything is free of course, but it has at least the merit of being written black on white (and not attached to asterisks).
- Account opening fee: 10 CHF (one-off payment)
- Annual management fee: free of charge
- Online payment in Switzerland and abroad: free of charge (no exchange rate surcharge!). Probably the biggest difference with other banks)
- Withdrawals in Switzerland: 2 free withdrawals per month, then 2CHF / withdrawal
- Withdrawals abroad: 1.5% of the amount
- IBAN transfer in CH: free of charge
- IBAN transfer within a SEPA country: free of charge but with a 1.5% exchange rate surcharge
Find all the detailed rates here.
If you wish to open an account with Neon we suggest you use our referral code “novomonde” and receive a free starting credit of 10 CHF. This corresponds exactly to the price of the card, so by using our code, the opening of the account is 100% free.
If you use our referral code we will receive the same amount as a reward.
Opening a Neon account: the steps
Here we forget everything we know about conventional banking… No teller, no forms: everything is done on the phone. I opened an account a few weeks ago and it literally took me less than 10 minutes.
- Download the Neon application (iOS or Android)
- Fill in the basic information, making sure you have your ID card or passport handy.
- We get a video call to validate our identity (takes three minutes).
- We get a confirmation email that it’s valid.
- 2 days later I was notified that my account was active.
- 2 days later I received the card and its PIN code at home.
Our use: why did we take this extra credit card?
If you refer to our article on banks for Swiss travellers you will notice that we have decided to transfer our respective banks in 2013 to Postfinance (a Private PLUS account) in preparation for our trip. Since then we have remained customers and we are still very satisfied with their offer. Withdrawals are free abroad, the management fees are 12 CHF per month or 5 CHF per month (depending on the amount on the account) and the very practical interface. The only thing we were “paying too much” for was credit cards. We’re often on the road and we make a lot of payments with our credit card (restaurants, travel, accommodation, tolls, etc.) in a lot of different currencies. At Postfinance we have an exchange fee of 1.2%, which means that if we pay the equivalent of 1000CHF abroad, 1012 CHF are debited from our account. That’s not a lot, we grant you that, but considering that we spend well over half of the year outside Switzerland, it adds up pretty quickly.
With Neon we have an alternative that allows us to make all our payments in foreign currencies without exchange fees and the card is accepted as a “standard” mastercard, i.e. almost everywhere!
If you are travelling around the world or simply make regular payments in foreign currency then it is well worth it! Especially since with our sponsorship code “novomonde” you receive 10CHF starting credit, which corresponds exactly to the price of the card and then there is no annual administration fee.
Afterwards, we are clearly better off with the Postcard for withdrawals, so we will continue to use it abroad for cash withdrawals, but at worst, the Neon card is a good backup. We’ve already had to withdraw with our Postfinance MaterCard and now it’s clearly stinging… 3.5% fee with a minimum of 10CHF. With Neon the price is 1.5%, with no minimum… In short, there is no photo!
The disadvantages of prepaid credit cards?
We’ll be honest there are very few, but there are still some 😉 In fact, like all Neo-banks, Neon works with a pre-payment system, that is to say that we only spend what we have on the account. It seems logical and personally I find it makes perfect sense. The application is quickly opened and you can check the balance at any time, but for us who also use it for automatic online payments (licence payments or domain name fees for our site for example), we will have to make sure we always have a sufficient balance at the risk of having payments that don’t go through. I didn’t find this feature, but I would think it would be cool if we could set a balance from which we are notified by message or push…
Nevertheless, for the travellers I see only one small downside which is the car rentals. Indeed, a large majority of rental companies ask for a credit card as a guarantee and this one cannot (generally) be pre-paid. If you don’t have a regular credit card you usually have to put down a cash deposit and not just “block this amount” on a card.
Note: On Rentalcars it is possible to filter the companies that accept pre-paid cards. Rental prices are often a few CHF more expensive, but this can help.
Last but not least, the PIN code can currently only be changed at an ATM. By default the code is a 6-digit code, and as we explain in our round-the-world ebook it’s usually better to have a 4-digit code if you’re going on a long trip. In many countries the old-fashioned distributors only accept 4 digits for the code. If your card has 6… you’ve got it in the bone! In short, remember to change your code in Switzerland before you leave!
Note: I have read that they plan to allow PIN changes in the application in the near future, so more to follow. But for the moment this is not the case!
There, I think we’ve covered it. If you have any questions or if you want to tell us about your experience with Neon or another Swiss Neo-bank, don’t hesitate to leave us a little comment.
Note: This article has been made 100% independently. We created our account, then contacted Neon to see if we could create a discount code for our readers, which the team kindly accepted. As mentioned in the article, by using our code to sign up you will receive a welcome bonus and we will also receive the same amount in our account. Beyond this “referral” link, we are in no way related or employed by Neon.