I am not a cross-border commuter but there are plenty where I work. They all use common brick and mortar banks to exchange CHF to EUR.
I mentioned services like Wise to a few; not as a recommendation, more as a question. They pretty much said that they don’t need it, but couldn’t really explain why.
Is this the usual lack of financial literacy in society that we’ve mentioned here in the forum several times already, or might there be another reason that I’m missing?
I think that might be the point. Before reading about credit card fees abroad I literally used my credit card always on holidays, at dismal exchange rates, and a foreign transaction fee on top of that
Although I have university education, I have never received financial education, not in school or through family/friends.
May 5, 2023, 11:54am
Maybe, but I will use another option like IB forex. I assume that they have accounts in both countries
I think that’s often the main one, with misleading advertisement (no commission foreign exchange with large spread).
I have some first hand experience with this:
I got my wife to open a Revolut account but she only uses it sometimes when we are abroad.
None of my friends are really aware of the high cost of paying in a foreign currency with their bank issued credit card, 3-4%.
When I mentioned it, the high earners don’t care and the low to middle income earners are afraid of trying something new.
A few have a Neon account or use a Migros credit card. So not everyone is completely unaware.
I think the main reasons for avoiding Wise & Co are:
Trust issues - dealing with a foreign virtual bank is a no-no for many.
Too complicated - They prefer having one account where they see all the transactions
No price sticker - If they spend 10000 in foreign currencies a year, nobody sends them a bill of 350 CHF at the end of the year. Instead they get a Cashback or points from the bank.
And that’s why banks and insurances earn truckloads of money
All my cross border colleagues use Wise+ revolut.
Even myself as Swiss resident I am using wise as main personal card.
Costs of exchange that are hidden in the exchange rate.
That said, I‘m not sure if all brick&mortar banks are considerably more expensive - wouldn’t be surprised if at least a few foreign banks could compete that specifically target cross-border commuters.
Zahlungen aus der Schweiz | Sparkasse Lörrach-Rheinfelden
No experience and not sure if there’s a catch, but seems to be fee-free and the exchange rate is quoted as including a 0.005 margin, so comparable to Wise (and less complicated, as well as banking with a proper domestic bank that speaks German).