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Update to the CASH26 program

posted by N26 • Business Development • March 3, 2016

One of our foundational principles at NUMBER26 is to provide a beautiful, mobile-centric, core checking account that is free and transparent. As you know, we also include a free MasterCard (and optional Maestro card in Germany and Austria) as part of your account. We can offer you that base service for free as we use the most modern technology and have a lean organizational structure compared to traditional banks.

 

Like some other online banks, we offer fee-free cash withdrawals from any ATM on the MasterCard network. But true to our spirit of innovation, we’ve taken cash access a step even further. Our CASH26 feature allows you to make cash withdrawals or deposits at more than 6.000 retailers in Germany, more options than with any other bank in Germany.

 

When we launch new features, we of course have to make some core assumptions about how they’ll be used. It so happens that we incur a fee to our service provider for every CASH26 transaction that our account holders make. And as we’ve analyzed actual usage of the CASH26 deposit feature (not the withdrawals), our costs to offer it have become significant – more than 1.500 Euros daily – and are growing quickly.

The bottom line is that it costs money to process cash: it must be counted, secured, transported, and re-deposited. That’s why our service provider charges us a percentage fee for your cash deposits. (Cash withdrawals have a lower fee, because retailers like to get rid of their excess cash on hand). In an ideal world we’d actually prefer that cash not be used at all; we can operate much more efficiently when customers primarily rely on card transactions and direct transfers for commerce.

 

We do want to continue offering you the added convenience of a cash deposit option. But incurring unlimited costs for the service is simply not sustainable. So we’ve tried to find a compromise: we will continue to subsidize free cash deposits up to 100 Euros monthly, but after that we will charge a fee to help cover costs. Instead of introducing hidden fees, we want to be very transparent here, as this is one of our core principles. 

 

First, what’s not changing

  • Non-cash deposits/bank transfers, whether from your employer or any other bank account, remain free
  • Bank transfers in Euros remain free (for any other currencies you can use TransferWise at much lower fees than with traditional banks)
  • Cash ATM withdrawals remain free
  • Cash withdrawals at retailers who are part of the CASH26 network remain free

 

What is changing

 

DEPOSITS using the CASH26 service will remain free up to 100 Euros/month, after which a 1,5% fee applies. To be crystal clear: this applies only to CASH26 deposits. 

This new structure goes into effect on 3 May 2016. An example of the charges:

  • 100 Euros deposited in a month = 1,5% x (100-100) = 0 (free)
  • 200 Euros deposited in a month = 1,5% x (200-100) = 1,50 Euro fee
  • 500 Euros deposited in a month = 1,5% x (500-100) = 6,00 Euro fee
  • 1.000 Euros deposited in a month = 1,5% x (1.000-100) = 13,50 Euro fee

Any CASH26 deposit fees will be deducted automatically and immediately from your post-deposit account balance if you exceed the free 100 Euro monthly grace amount. Since you’ll be keeping up with any fees as you use the service, you’ll avoid any end-of-the month or end-of-the-quarter fee surprises.

 

One thing to point out: NUMBER26 offers the only checking account in Germany with a direct link to such an extensive retailer cash deposit/withdrawal network. And an innovative feature of our partnership is that CASH26 deposits generally are immediately available for NUMBER26 MasterCard or Maestro card transactions. So we hope that even with this moderate new fee structure, you’ll continue to see value and convenience with the CASH26 deposit feature. We are also working on bringing fees down for higher amounts and will inform you as soon as we have alternative options.

 

Open and honest
Now, there’s no doubt that some of you aren’t going to like this pricing change one bit. And we get it: nobody likes to start paying for something which they used to get for free. So, we’re sorry – really – if you’re disappointed. We’ve tried to be as fair and transparent as possible about the reasons for this price change. We appreciate the trust that all our users place in us, and we hope that the users of the CASH26 deposit feature in particular will understand why we made this change. If you have specific questions or concerns, you can visit our support-center

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