Cross Border Banking

Cross Border Banking

Cross border banking is still a problem in 2020. Needing to solve a personal cross border banking problem I ventured into the financial forest. To be honest, I’m still working on solving my challenge.

The people and businesses have gone global, sadly our banking has not! In the world of banks everything is still localized. And living in a country as large as United States I often don’t see the problems. That is until I try to do business or help people outside the USA. That’s where the challenges begin.

Here in the USA we are truly blessed. So many banks and options. If you don’t qualify for Bank of America, you can choose Chase. If brick and mortar don’t do it for you, there are many online or neo banks.

Transferring funds and making payments are equally as simple. From old fashioned credit and debit cards to instant transfer methods. I’m sure you’ve heard of them: PayPal, Venmo, Cash app, Zelle to name a few.

But when you try to step outside your arbitrarily drawn box, the cross border banking problems arise!

Traveling Abroad

This is not quite the problem. With the advent of traveler’s checks and credit cards it’s easy to make purchases abroad. Yes, even without a foreign transaction fees.

There are quite a few traditional banks that offer zero international fees credit cards that also don’t cost you annual membership fee. One of those is Bank of America’s Travel Rewards. I’m not necessarily recommending this card but I do love the zero fee factor. And a quick online search will likely give you many more to choose from.

Selling Internationally

Not quite as easy as traveling but not as complicated either. With the credit cards issued by nearly every bank this process is rather simple. A few buttons on your website and a payment processor and you are done. Ready to meet the world and make money!

But not so fast. There are certain countries that may never reach you. Some which you may not have even thought of.

For example Cyprus! Apparently due to the ease of money laundering on this country-island USA banks are VERY reluctant to do business with. And with it comes the inability to do much of anything, financially speaking, with this place. And for the record, I have no clue how to launder money (I always thought you put it in the wash…). But if you are interested in how this works, watch Money Laundering: A How To Guide with Kal Penn.

I rest my case.

Cross Border Banking

Now we enter into some uncharted waters where things get challenging, dare I say impossible!?

Having family who lives in another country is hard in many ways. Trying to give them access to help you with fiscal responsibilities? Good luck!

While you can open joint accounts or have an authorized user on just about any account, what I have discovered thus far they have to be located in the same place you are.

Thankfully there are some neo banks that are starting to pop up that are working on resolving the issues, however it’s not a complete solution. Some of the favorites that I’ve found thus far are N26, Novo, Revolut, Varo, but none of them solve the problem perfectly. Some of them offer local service only in U.S., Varo comes to mind. Others work well in Europe as well, but only a few select countries: Revolut and N26. Novo is branding itself as a small business friendly bank.

Thus far N26 is winning, however it is still not a perfect solution.

N26

The nice part about this particular service is that they offer zero free accounts and no international transaction fees. However, if you have to use an ATM that is not within the network (55,000 locations around the world) there are fees. Fees add up. And the trouble still exists with exchange rates, accessibility and ease of use.

Now for locations where you don’t need cash, this can work well. However, as weird as it is to say this in 2020, not every country and business accepts cards. Gasp! I KNOW!! So ATM + $2 ATM fee + 1.7% fee from N26 and things add up rather quickly.

And while I haven’t found my solution quite yet, so far neo banks are winning. Next on the agenda is to learn whether crypto can save the day! Cheers!