The subscription revolution in your wallet

Photo: Shutterstock

The age of traditional bank accounts is coming to an end. Digital banking subscriptions, such as N26, are providing their customers with more and more services – faster, cheaper, with no hidden costs.

To be honest, traditional banks are also slowly getting on board with the subscription model, because they are most likely aware of all the curse words thrown their way by clients frustrated with the ossification of their services.

Photo: N26

But this time, our focus is not on the traditional banks and bankers, but the masters of the subscription economy in the world of finance. They are the German digital bank N26, which now has over two million users. For comparison, the largest Slovenian bank, NLB, has fewer than 700,000 clients on home territory, and even if we include all its clients in the region, the number is still under two million.

To be fair, N26 does not (yet) have everything that traditional banks have to offer. Clients, who can open an N26 account online in under 10 minutes, cannot for example apply for a mortgage. But on the other hand, access to most other financial services is much faster, and also cheaper.

The N26 digital bank will offer a medium-size consumer loan with much better interest rates than many traditional banks.

A four-year car loan from N26 of 10,000 euros can be obtained in minutes, without having to visit a bank, without any annoying paperwork, hidden costs, or major complications. The effective interest rate? A favourable 4.59 percent, which is almost three percentage points less than the informative calculation in one of Slovenia's largest banks. The final difference is almost 585 euros; after four years, the N26 client will have repaid a little under 10,950 euros, while the final price tag for the client of the Slovenian bank will be over 11,500 euros.

Better consumer loans are only one of the advantages of the N26 subscription model, which users can enter by opening a digital current account with a Maestro bank card or by ordering a prepaid Mastercard.

Photo: Rawpixel/Unsplash

The basic package is free (clients of other banks will be paying 6 euros a month), as is issuing the Mastercard or Maestro bank cards, which offer five free withdrawals in any of the eurozone countries and payments in most global currencies with no commission.

The selection of services is even wider for subscribers to the N26 Black package, which costs 9.99 euros per month. In addition to even more free withdrawals, including foreign currency withdrawals elsewhere in the world, subscribers will get insurance from the German Allianz Group, which will cover unexpected travel costs; anything from health services to lost luggage, or plane delays, as well as the theft of your mobile phone or money from your bank account, and more.

The holders of N26 Metal, the most expensive subscription package, have access to exclusive offers of the German digital bank's partners, in addition to various types of insurance.

But the most demanding users, who want more than just payment services, will be most satisfied with N26 Metal. For 16.90 euros per month, an elegant metal bank card will make its way to their wallets, bringing them all the advantages of N26 Black and more, such as additional warranty and theft insurance for all items purchased with their N26 Metal Mastercard.

In addition to the above advantages, subscribers to this package will also get access to exclusive offers from a wide range of services from the German digital bank's partners. Need to rent a car? With the help of the Drivy app you can do it for 25 euros cheaper. Does your flat need a thorough clean? You have a ten percent discount for the Helping app. Would you rather be staying in a hotel? If you reserve a room through Hotels.com or IHG, you will receive a discount of 10 to 30 percent. Feel like exercising while on vacation? Subscribers to N26 Metal receive a monthly ten-euro discount from Urban Sports Club for the use of their team sport, yoga, swimming, or climbing facilities.

Photo: Shutterstock

The subscription economy is entering the finance world with a bang, promising new business models that are substantially friendlier to end users. The race for their satisfaction has only just begun.