A “real” bank – N26

… continuing the story.

February 5 . . . the payment did not go through. I had to find a way to pay this damn one-euro tax – forthwith – upon financial penalty.

The time to declare my five-euro turnover and pay my social contributions was over, and things were not looking good. The French Organization for the Collection of Social Security and Family Benefit Contributions, namely URSSAF, was indeed not accepting PayPal1 payments and my bank would not allow me to use my Personal account for professional activities – not even for a one-euro transaction – at the risk of seeing [it] closed. I had to regularize my situation immediately, and for that to happen, I had to find a bank micro-entrepreneur friendly1. The clock was ticking…

No time to “cogit…”

While panic raised slowly through the previous weeks, it was at its maximum that day. When I realized that my PayPal payment would not go through (see When all the crap hits the fan at the same time…) and, at the same time, that my bank (i.e. not PayPal) was threatening me to close my account, I was not feeling good indeed. I was facing a Catch-22 situation. The only way to pay my social contribution was with my Personal account. Doing so would have, without a doubt, sound the death knell for the latter…

Catch-22

The term was coined by Joseph Heller in his so-called satirical war novel. In the novel, a fighter pilot attempts to avoid further combat missions under a statute stating that any pilot who willingly continues to fly missions is insane. However, he is thwarted by the pronouncement that if a pilot requests to stop flying, he proves his sanity by showing a concern for his own safety.

Catch-22
A dilemma or difficult circumstance from which there is no escape because of mutually conflicting or dependent conditions.

Although it originally refers to a problem for which the only solution is denied by a circumstance inherent in the problem, it is also used more broadly to mean a tricky problem or a no-win or absurd situation. For example, a Catch 22 can be an extremely frustrating situation in which one thing cannot happen until another thing has happened, but the other thing cannot happen until the first thing has happened.

On numerous occasions, I heard on a French tech podcast – le Rendez-vous tech, naming no names – about a bank that would change your banking experience (ça va vous changer la banque). While it was praised to the sky by one co-host, in particular, the others were unanimous about how great N26 was (in comparison to the French bank offers at least). Not having time to think twice – not mentioning the non-existing alternatives in France – I decided to go for this neobank.

A neobank (also known as an online bank, internet-only bank, virtual bank or digital bank) is a type of direct bank that operates exclusively online without traditional physical branch networks.Wikipedia

N26 – The Mobile Bank

Opening a standard bank account with N26 is totally free (up to a €50,000 balance).N26

A free bank account with no hidden fees.

N26 was operating in France; this German neobank launched indeed in France in January 2017. It was free and provided in addition to the basic current account, a Debit card. Again, while the situation has dramatically improved since, back then, I didn’t know of any alternative (other than PayPal; see A dedicated bank account).

Since July 2016, N26 has been fully licensed as a bank, adhering to all the regulations of the European Central Bank.N26

Given my misfortune with PayPal, my second requirement – beyond cost – was to open an account in a “real” bank! Checked.

Open your free business bank account online in minutes—no minimum balance, no account fees, and no paperwork required.N26

Last, but not least, during my quick survey of their offer, I also discovered that they had a free business bank account for freelancers. Great! Admittedly, I did not need a Pro account. As explained in A dedicated bank account, the French law does not require micro-entrepreneurs to have a professional bank account. The only legal obligation is indeed to hold a dedicated bank account separate from your personal bank account.

Do I need a business bank account if I’m self-employed?
Separating your business finances from your personal banking is a smart move for freelancers and the self-employed. The N26 Business Standard free business bank account can help you to easily keep track of your business expenses and income in one place, which will make bookkeeping and accounting easier as your business grows.

Now, a potential caveat was the German IBAN that comes with every account. On that matter, it is worth reiterating that, in France, you need to have a French IBAN (see When all the crap hits the fan at the same time…). Although businesses in the European Union (EU) have to accept any bank account number, regardless of which EU country it is from, the French administrations do not hear it that way! A potential explanation, according to the financial journalist Selin Bucak, is that they haven’t updated their systems, with some dating back to before the single market, and therefore cannot actually accept accounts from outside of France.

Time to be …active

It just takes a few minutes to open a bank account online with N26. Download the smartphone app or head to the N26 website. Confirm your personal details, email, and shipping address, then select the type of account you’d like to open.N26

N26 eligibility criteria

According to their Support Center, “you can open an account in the app (on your smartphone) or in N26 for Web if you:

  • are at least 18 years old
  • are a resident of a supported country
  • own a compatible smartphone
  • hold a supported ID
  • don’t already have an account with us
  • are able to verify yourself in one of our supported languages: English, German, Spanish, Italian, or French.”

Checked, checked, oops, checked, checked, and checked.

Believe it or not, the smartphone was indeed a problem for me. All I had, at the time, was my old Blackberry from the USA. A smartphone, yes, but the latter was apparently2 not even compatible with the European data system (and was still under the Blackberry operating system). That could have discouraged me to go further. However, not only was I desperate, but also they were referring to an alternative way – or head to the N26 website.

N26 web

Although N26 has been specifically designed for smartphone users, they just had released their N26 web at the time. According to them, it was a completely new way to use your N26 account . . . regardless of what device you’re on.

All the same great features you already use, now on a bigger screen. Send money, get paid, and manage your finances on whatever device you prefer.N26

So, I headed to their website…

The sign-up process

When I clicked on Get Business Account, a Start loving your bank message welcomed me, as well as the following statement: Open your N26 account in 8 minutes. As easy as these four steps:

  • Confirm your email address
  • Download the app
  • Verify your identity
  • Get your N26 debit card

I clicked on Get started and provided all the info (email, phone number, address, nationality, etc.). Then, I was prompted to download the N26 app and finalize the process on my smartphone.

“Wait a second! What about the N26 web?”

The end?

Not giving up, I immediately reached them via their live chat (not working from the French website, but only from the English site). Unfortunately, the Customer Support specialist was clear on that matter: no smartphone, no N26 account! I expressed my discontent, but to no avail. He encouraged me to share it on ideas@n26.com, though.

Dear Sir or Madam,

I wanted to open an account with you. I knew about the compatible smartphone requirement; yet, I was hoping that the new web app could be enough. Indeed, my old blackberry is not compatible and I didn’t want to buy a new phone.
I heard so many praises about N26, but – as of today – I can’t even get started. Such a simple thing as registering via a web browser (computer) should be provided (using either a scanner, webcam, files downloading to validate the ID). Granted, I might be old school – I do everything online, but NOT via phone apps – but computers are still used by many!
I am now forced to look for a new smartphone or to give up on you. If you know about any workaround (i.e. without a smartphone), please, let me know.

Best,

To be continued…


1 As alluded in A dedicated bank account, many (if not all) French banks refuse to open a regular account for micro-entrepreneurs and force them to subscribe to expensive pro accounts. Given the limited budget inherent to my loss-making business, I ended up with a Business PayPal account – with no hidden fees and no monthly commitment, as stated on their website. ^
2 This is what I was told when I wanted to buy a prepaid card – with data – after my return to Europe. I was at home most of the time, with WI-FI access, so this was not a big deal back then. Therefore, I decided to keep my Blackberry. Besides, my financial situation did not allow me to purchase a new phone (see Social security contributions); should I remind you that I had no other option than to go back and live in my parents’ home (see More taxes). ^

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