International Digital Bank Account Guide

In this article, we’re taking a detour from traditional banking to help you find and open the best international digital bank account.

Now, we’re not the biggest fans of digital banks and EMIs. But, it’s not because we dislike innovation or have some weird obsession with traditional banking.

Instead, we have concerns over security, financial stability, and customer service. Unfortunately, when it comes to digital banking, these critical features often take a back seat to rapid customer acquisition.

Nevertheless, most people can benefit from having an international digital bank account. And, certain digital banking options are worth including in your banking stack.

Now, if this is your first time visiting GlobalBanks, don’t forget to download your free copy of the Non-Resident Banking Starter Guide before moving on. It provides even more details on how to open international bank accounts and prepare your banking stack.

Below, you’ll find everything you need to know about opening an international digital bank account.

This includes a breakdown of your options, some key questions to ask, and how to determine which digital bank will serve you best. We’ll also share a few of the overlooked risks to consider before opening as well as a few alternative options.

But, before all that, let’s look at the benefits of using an international digital bank account.

Benefits of an International Digital Bank Account

international digital bank accountIn past articles, we’ve talked about the risks associated with international digital bank accounts. Those still hold true.

In fact, we do not recommend an international digital bank account as a replacement for a traditional bank account. Instead, we see a pairing of digital and traditional banking as the best way to optimize your banking stack.

With this in mind, here are some of the top benefits that you can unlock with an international digital bank account:

1. Low-Cost International Transfers

One of the major benefits of using an international digital bank account is it can save you money. This is because certain international digital banks offer better currency conversion rates and lower fees on international transfers than traditional banks.

In fact, depending on the number of international transfers you make and which currencies you’re transacting in, and how horrible your current fees are, having the right mix of digital banking solutions (in addition to traditional bank options) could help you save a significant amount of money each month.

The key, of course, is knowing where you’re getting burned on fees in the first place and then figuring out which digital banking options will work best for your situation and help you to reduce costs.

2. Limited Financial Requirements

Unlike traditional banks, most international digital bank accounts don’t require a minimum deposit when opening a new account. And, if they do require a minimum, it’s often very low. That’s because many digital banks are venture-backed and focused on customer acquisition and growth, not profits.

So, they’re focused on making it as easy and attractive as possible for users to open an account. And, that means the barrier to entry is low and you don’t need a lot of money to get in or maintain an account.

For this reason, if you have limited cash to begin with, opening an account with an international digital bank might be something to consider.

3. Better Online & Mobile Platforms

Even the biggest supporters of traditional banks have a hard time arguing this point. Digital banks have better online platforms. They’re focused on improving the user experience. That means international digital bank accounts are often simpler and easier to use.

While a user interface and aesthetic attractiveness might feel cosmetic and seem unimportant on the surface, it can sometimes make managing the account online (or via mobile) easier and less of a headache.

4. Easy to Access Debit Cards

Unlike traditional banks, international digital banks often offer debit cards at the time of account creation. Since you’re creating the account online, these cards are then sent to your place of residence (or business) after the account is opened.

As a bonus, sometimes, debit cards associated with certain international digital bank accounts can be used internationally without incurring high foreign currency charges. This can be useful for avid travelers or people who live in multiple countries.

But, it all depends on which digital bank you choose and their specific card offering.

5. Residence Based Account Opening

In most instances, international digital bank accounts can be opened relatively quickly online by verifying a few details and uploading copies of certain official documents.

Quick onboarding is one of the biggest advantages of digital banks, but it comes with a snag. If you are not a resident of a specific country or region, it can be very difficult to open at certain digital banks.

So, if you have the wrong residency, you might have to find a different digital bank, acquire another residency, or get an address in an acceptable country to get in. And, if neither of those options is possible (as is common for members of Unlucky Passport Club), then sometimes a traditional bank is your only option.

How to Use an International Digital Bank Account

International digital bank accountLike traditional banking, knowing how you plan to use your digital bank account after it’s open is an important consideration before applying. Knowing what your banking priorities are and how you’ll use the account in the future will help you zero in on the specific benefits you need and which banking options are best.

With this in mind, below we’ll share a few common ways that international digital bank accounts can be used. We’ll also touch on some of the shortcomings of digital banks and identify a few situations where traditional banks might be a better option.

Use an International Digital Bank Account for Transactional Banking

As mentioned, digital banks can offer less expensive international transfers, making them the perfect tool to facilitate transactional banking. Whether you have a business or just need to send and receive transfers regularly, these digital accounts can help you save significant amounts of money every month.

Use an International Digital Bank Account to Support Payment Processing

While most digital banks would not be considered an alternative to payment processors, some quasi digital banks (e.g., PayPal) do enable you to manage funds while also receiving payments. Likewise, more mainstream digital options can connect to payment processing platforms, making them a viable option to support your business.

Do Not Use an International Digital Bank Account for Large Deposits

As we have stressed many times, you should not use an international digital bank account to hold large deposits. In most instances, digital banks are not held to the same standard as traditional banks. So, they do not have deposit insurance and accounts can be shut down without warning. These factors obviously present risks to both you or your business and could result in being cut off from your money indefinitely without notice.

Do Not Use an International Digital Bank Account for Higher Interest Rates

Similar to the last point, you should not use an international digital bank account to access interest-bearing deposits. The same risks of account closure and lax regulations apply. But the real reason for this is because of the extremely low rates that digital banks offer if they offer any interest at all. In most cases, you will be far better off considering alternatives at traditional banks, even in the lowest interest rate environments.

Do Not Use an International Digital Bank Account for High-Risk Businesses (Maybe…)

Many owners of high-risk businesses look at an international digital bank account as a viable alternative to traditional banks. Well, that depends. In fact, it’s not as cut and dry as saying “yes” or “no”.

You see, in most cases, when you open an account with a digital bank, you sign a user agreement confirming that your business does not participate in high-risk industries. If you do end up opening an account, and then the digital bank determines that you are in fact involved in a high-risk industry, your account will be shut down.

But in other cases, certain EMIs are actually set up to support high-risk businesses and they either turn a blind eye or don’t ask. The UK and all of it’s Russian backed EMIs is a good example of this.

How to Choose an International Digital Bank Account?

International digital bank accountHow do you determine which international digital bank account is right for you? First, you’ll need to identify which specific services you need, which country (or countries) you want to bank in (or transact with), and then determine whether or not you can actually open an account based on your current residency and address.

For anyone with residency in the EU, UK, or US, you’ll likely have a wide range of options available to you. However, a common stumbling block is providing proof of residency. This is especially true for digital nomads and expats without permanent residency. In addition to proving tax residency, you will also need to provide an address and a phone number from the region.

Assuming you do have residency, an address, and a phone number in one of these regions, then you’ll need to determine which of the following items are most important to you:

  • Low-cost transfers
  • Send and receive international transfers
  • Online payment processing
  • Connection to other payment processors
  • Connection to traditional bank accounts
  • Available currencies

Here is a quick snapshot of several popular digital banking options and how they stack up against the above metrics:

Mercury Bank: US Account For US LLCs

Mercury is a US-based digital banking start-up that has partnered with a US bank. They cater to US companies (typically small businesses and focused on startups) in need of US bank accounts.

Like most digital banks, now that Mercury has been in operation for a few years, their account opening process and compliance procedures have become more tedious. This has resulted in account opening taking longer and requiring additional verifications. This is something to keep in mind when trying to open accounts.

That said, if you want to open an account for a US LLC, Mercury is a good option. But, as is the case with other digital banks, you should use them for transactional banking.

Alternatively, if your business is more substantive or you have larger deposits, you should consider pairing a Mercury account with a traditional bank account.

Having a backup bank account is an easy way to hedge against future account freezes. Likewise, it protects you from ever-changing compliance procedures that can leave you financially stranded. By not putting all your eggs in one basket (aka using one bank for everything), you can ensure that you’ll always have direct access to your money no matter what happens.

If you want to open a US bank account for a US LLC without physically traveling to the US, we can help. We help non-residents find and open accounts at top US banks, international banks, regional banks, and even the best digital banking options. To learn more, just click here.

Revolut: Digital Banking in the EU, UK, & US

Revolut has been pushing the boundaries of digital banking since 2015. Initially starting as a prepaid travel card provider, the company is now an EMI that offers a range of products and services to EU, UK, and US customers.

In addition to standard features, Revolut also allows you to send money abroad in 30 different currencies. And you have a choice between a free checking account, a paid premium account, and a more expensive metal account.

However, if you want to open a Revolut account you must be a resident and have an acceptable address and phone number in one of the countries they serve.

Additionally, while Revolut makes it clear that they are not a bank, they do have a European banking license, issued in Lithuania. And in the future, they plan to obtain a UK banking license as well.

Bottom line: Revolut can offer value to you or your business–if you can get in and live in the right country. Revolut is useful for those dealing with frequent transfers, multiple currencies, and who want lower FX rates.

Monzo: UK Digital Bank & Limited International Functionality

Monzo is an international digital bank account in the UK for individuals and businesses. Unlike many digital banks, Monzo actually has a banking license and offers deposit guarantees. They offer a range of accounts and allow for the set up of recurring payments.

But like many digital banking solutions, you need to be a resident in their operating region (the UK) in order to be eligible for an account. Another shortcoming of Monzo is that it can’t accept inbound international transfers. However, you can connect your Monzo account to Transferwise to facilitate international transactions.

So, if you’re looking for an international digital bank account with an IBAN or you need to send and receive money internationally, this option won’t work for you.

If you are interested in a UK bank account for yourself or your business, there are options available, including remote account opening for non-residents. To find out how you can get access to these banking options, just click here.

N26: EU Digital Banking for Those in the EU

N26 is one of the more popular digital banking options in Europe. A major reason for this is that N26 provides a free account, gives you five free ATM withdrawals per month, and has no foreign transaction fees. But, naturally, anything “free” does come with some limitations.

If you want to send transfers outside of Europe, N26 won’t be much help. That’s because the platform only supports transfers through the SEPA network. Of course, if you only use it for European transactions, then N26 is a great option. And, if you need to send and receive transfers internationally, you can always pair an N26 account with Transfewise.

Alternatively, you could open an EU bank account at a traditional bank for yourself or your business. This can be done remotely, regardless of your residence or nationality. You just need to know which banks to target and which branches and bankers to approach. Click here to learn how you can access these banks now.

Transferwise: International Transfers in 20 Foreign Currencies

Transferwise is an online money transfer service that connects with your bank account. It has a range of benefits that we think most businesses and individuals should strongly consider adding it to their banking stack. It’s like a free “add-on” that makes banking better and gives you instant access to convenient, low-cost transfers.

While Tranferwise isn’t an international digital bank in the traditional sense, it does have the “Transferwise Borderless Account”. This is a multi-currency account that comes with a debit card.

Of course, the vast majority of Transferwise benefits center around the fact that its users can easily (and affordably) send and receive international transfers. For example, Transferwise allows you to send international transfers in more than 20 currencies. Plus, you can send domestic transfers in more than 30 currencies.

For these reasons, Transferwise is a great tool that almost anyone can use to optimize banking and save on transfers. But, it’s not a replacement for a bank account and does have some limitations. And, while it’s an excellent tool for supporting international transfers, we wouldn’t recommend keeping significant wealth or large deposits here.

With this in mind, a better option would be to open an international bank account with a traditional bank. That way you get the benefits of a secure bank account, paired with the cost savings and efficiency of Transferwise. 

If you want access to actionable information, tools, and the support you need to unlock the international bank world and build the most optimal banking stack for your situation, we can help. When you join GlobalBanks Insider, you get instant access to banks, direct banker contacts, account opening strategies, and much more. 

A Final Note on International Digital Bank Accounts

opening considerationsIf you’re dead set on opening an international digital bank account, the above options might serve your needs. But, which options you can realistically access will ultimately depend on your residency, how you plan to use the account, and what your banking objectives are.

Before applying, make sure you clearly understand the limitations of each platform. Also, make sure you review the account opening quirks and requirements for each.

Likewise, you need to protect yourself from constant account freezes, algorithmic compliance, regulatory issues, and lagging customer support. You can do this by having a well-thought-out banking stack, including a mix of digital and traditional banking options. This can include financially sound banks and backup accounts. Of course, you can also use fintech solutions and a range of credit cards. Plus, you should consider using strategic tools like Transferwise for increased efficiency and cost savings whenever possible.

Ready to Open an International Digital Bank Account?

If you’re ready to open an international digital bank account and pair it with traditional banking options, you can obviously use the information above to get started.

But, if you want to know which banks will accept you, which account opening strategies to use for your situation, and which digital banking solutions and strategies are best for you, we can help.

If you’re ready to take action and start opening international accounts now, you can access GlobalBanks IQ, our dedicated international banking intelligence platform.

GlobalBanks IQ gives you everything you need to start finding and opening accounts for you or your business today.

When you join GlobalBanks IQ, you immediately unlock the GlobalBanks Database of international banks — home to 250+ banks in 50+ countries. 

And, you get access to our library of premium (members-only) reports, including proven account opening strategies, country-specific banking options, and lists of banks for specific client types.

Plus, you unlock our account opening checklists, dedicated account opening alerts, and much more. 

To get started, click here to see if GlobalBanks IQ is the right choice for you to start accessing the benefits of international banking today.

You can also view all of the account opening solutions offered by GlobalBanks on our products page.

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