The Big Banking Chat: answering common banking questions

We answer some of the most common questions we hear about banking.

3 min read

Hopefully by now, the Big Banking Chat has left you feeling more knowledgeable about how banking works. We’ve already dug into our social media mailbag and answered some great questions, so today we thought we’d tackle some of the most common questions our support team receives from new and existing customers.

The whole point of the Big Banking Chat has been to get people talking. We hope by sharing the answers to common questions, we’re helping give everyone the confidence to ask questions when they need to, rather than being embarrassed about not already knowing the answer.

A lot of people who have only ever used traditional banks are understandably cautious about switching to a digital bank and we get lots of questions about how we’ll protect their money. And we don’t blame people for asking—in fact, it’s the first question we’d encourage you to ask of any bank you ever do business with.

The answer is simple—as a fully licensed bank we follow exactly the same guidelines and are governed by the same regulations as a traditional bank. We then back up this adherence with best-in-class security features and cutting edge technology to ensure only you can access your account. It’s not just about security either, we know you need the confidence that your money is safe should anything go wrong. That’s why N26 is proud to have a German banking license, which ensures everything we do complies with the rules of the German financial regulatory authority. Doing this ensures that all EU customer deposits up to the value of €100,000 are safeguarded by Germany’s deposit protection scheme.

What’s more, as a digital bank we have great in-app features such as being able to lock a lost card, and also unlock it again if you then find it down the back of the sofa. Giving you that peace of mind that wherever you are, you’re in control.

This is one of those frustrating areas of banking where three different processes seem so similar on the surface that they’re used interchangeably—even by people who should know better. But, there is a difference between them and whenever you sign up for something which requires regular payments it’s important to understand how you’re being charged.

Put simply, a direct debit is organized and administered by the company or institution you’re making a payment to; you are giving them permission to take money from your bank account on a regular basis. And, crucially, you’re giving them the authority to amend how much that payment is, so you should always double check direct debit payments every month to make sure you’re only paying what was agreed. But, as the customer, you retain the ability to cancel the payment at any time, though it’s good practice to notify the payee that you’re doing so.

Standing orders are payments you agree to make of a fixed sum on a fixed date, most often monthly. They are authorised by you and require no input from the payee—they leave all the administration and responsibility to you. They’re often used to pay rent or for one individual to make regular payments to another. For example, in a house share housemates may use standing orders to reimburse one another for the cost of bills.

Finally, a recurring payment is when a company is given the authority to bill your credit or debit card on a regular basis. They’re often harder to cancel than a direct debit and you as a consumer have less control over what’s involved. And if you do manage to cancel a recurring payment, there’s nothing to stop the organization involved setting up a new payment using your existing card details.

Got a question we’ve not covered in the Big Banking Chat so far? We’d love to hear it. Just share your query on Twitter using #thebigbankingchat and we’ll make sure you get the right answer.

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