Digital Banking
Neobanks
Neobanks, also referred to as digital banks or challenger banks, are financial technology companies (‘FinTechs’) that offer fully digital banking experiences through mobile apps and online platforms. Every major neobank operating in Ireland is digital-only, meaning there are no physical branches that customers can visit for in-person banking. This allows neobanks to save heavily on cost and to prioritize the things that customers care about most – fast, innovative and transparent banking tools.
The most widely used neobanks that are available to Irish customers include Revolut, Bunq, N26 and Monzo.
Reading time: 15 min
Last updated: April 1, 2026
Table of Contents:
Written by:
Dan Malone
Did you know? Neobanks have well over 3 million customers in Ireland. Still, 89% of Irish customers use traditional banks for their main current account. Only 3% of Irish household deposits are held with neobanks (Central Bank of Ireland).
This suggests that Irish consumers are willing to use neobanks as a supplementary banking tool, but still remain hesitant to fully switch their day-to-day banking. This would include salary payments and storage of household deposits.
At Honest, we believe Irish consumers remain conservative when it comes to fully switching to neobanks. This stems from misunderstandings about regulation, security, and the current account switching process, as well as a lack of awareness around the benefits of digital alternatives.
Are Neobanks Really Safe?
Neobanks are just as safe as traditional banks. That’s not an opinion; it’s a requirement under EU law. Banking rules and regulations follow the activity, not the brand. It doesn’t matter if you’re a 200-year-old institution or a brand new banking app. If you're regulated as a bank in the EU, you must adhere to the same rules.
Yet, the terms ‘neobank’, ‘digital bank’ and ‘challenger bank’ have somewhat misled customers. Many now link these terms to a higher level of risk, as if these banks are moving away from the ‘tried and tested’ methods of the past. In many ways they are, but this doesn’t make them any less safe. That’s not how banking in the EU works.
So when you hear the term ‘neobank’ in the context of safety, just think ‘bank’ - because that’s what they are. The ‘neo’ part is only an indication of the way in which the fully regulated banking service is offered (i.e. digitally). It’s important that Irish consumers understand how banking rules and regulations work and what protections they provide. You can check out our guide to banking regulations in Ireland here.
Key Insight: The term ‘neobank’ is sometimes used loosely to describe other types of financial institutions such as Electronic Money Institutions (EMIs) or Payment Institutions (PIs). These are not banks, but they still require authorisation to operate in the EU. To keep it simple, when we say neobanks, we mean institutions that have a full banking licence.
Neobanks vs Traditional Banks
There are a number of key differences between neobanks and traditional banks that customers need to be aware of. Neobanks are designed with technology at their core whereas the traditional banks still deal with outdated systems.
But still, both must adhere to the same rules and regulations. This puts all banks at the same starting point. From there, they compete for customers based on different features. Depending on your own specific needs as well as the features that you value the most, one or more banks may be best suited to you. We describe this as your ‘customer profile’. Different banks will be best suited to different customer profiles.
Neobanks offer a far superior onboarding experience than traditional banks. No paperwork, no excessively long registration processes and no visits to physical branches. In many cases, you can have a neobank account up and running in 10 minutes or less. With traditional banks, it could take a week or more to get your account fully operational. It doesn’t stop with the account opening either. Neobanks will allow you to immediately start using virtual cards, fund your account and create sub-accounts, all before your physical card arrives in the post.
EU regulations and directives, such as the Payment Services Directive (PSD) and the Digital Operations Resilience Act (DORA), set the standard for security features that all European banks must comply with. But oftentimes, neobanks go above and beyond their minimum requirements under the law. That’s because their innovative technologies allow them to offer a wider range of security features than traditional banks.
Many neobanks will offer additional features such as rotating CVCs, localised card protection and disposable cards. These features mainly focus on ‘Card Not Present’ (CNP) fraud which accounts for roughly 85% of all card fraud in Ireland. CNP payments cover online shopping and any other payments made remotely where your debit card doesn’t need to be in hand. Recent estimates put CNP fraud in Ireland at €29 million. This happens over 275,000 transactions each year, making the average value of each fraudulent CNP transaction €105.
Neobanks are at the forefront of neutralising this fraud. They add security features that render stolen card details useless to criminals. Traditional banks have yet to catch up.
Where neobanks shine the most against traditional banks is unsurprisingly with their day-to-day banking features. With traditional banks, your current account lets you do the basics: receive, spend, and transfer money.
Aside from that, there’s very little else that these accounts offer. You might get occasional bonuses like cashback or product discounts. However, with neobanks, basic current account functionality is only the beginning. It’s all of the additional features around the basics that define a neobank and give it its own personality.
New Accounts
When you set up a personal neobank account, you’ll be able to create different types of accounts within the app. For example, joint accounts, children's accounts, savings accounts, and foreign currency accounts. You can create these accounts and navigate between them with ease. Creating additional accounts with a traditional bank often requires an appointment at a physical branch.
Cards
Neobanks allow you to go far beyond just using a standard physical debit card linked to your digital wallet. They offer that basic feature plus the ability to create multi-use virtual cards, single-use virtual cards, or both. There are many use cases here. Multi-use virtual cards are great for ‘set and forget’ transactions, such as a recurring streaming or gym subscriptions. They can also be added to your digital wallet for specific expenditure, say, a groceries card or an entertainment card.
Security
Single-use virtual cards are a game changer for online shopping. If you’re concerned about a website's safety, just use your single-use card for the transaction, then dispose of it afterwards. If a hacker gets your card details, they’ll be totally useless. This is how CNP fraud is prevented. Some neobanks allow you to change or ‘rotate’ the CVC on your virtual cards for a similar result.
Budgeting
Neobanks have revolutionised budgeting in Ireland. One of the ways they’ve done this is through sub-accounts. With sub-accounts, your current account gets split into multiple mini-accounts. Depending on the neobank, each mini-account may have its own IBAN. This means you’ll have several active current accounts under one roof. The possibilities are endless.
You can assign virtual cards to each sub-account, allowing you to pay for different expenses with a specific card and budget. You can set it up so that when you get paid, your salary is automatically apportioned between your sub-accounts. No more manual budgeting.
You can set up direct debits and standing orders from specific sub-accounts. This could be for utilities, mortgage, and rental payments. You can save as you spend with ‘roundup’ and choose where those savings go.
The best part? Detailed analytics over every aspect of your banking activity. Budgeting at an incredibly granular level. It might not look obvious, but that visibility, flexibility, and control helps you to build healthy money habits and start saving big. Traditional banks typically offer fewer budgeting tools and analytics features.
Payments And Moving Money
Neobanks were first adopted in Ireland primarily due to the ease at which money could be requested and sent from one account to another. Since then, SEPA Instant Payment has become a standard current account feature across the EU, allowing for money to be sent and received within 10 seconds, no matter the bank, no matter the time. Neobanks outperform traditional banks by far in how money can be moved between accounts.
Neobank users have many ways to request and transfer money. They can use payment links, QR codes, usernames, emails, or phone numbers. Not to mention additional functionality such as split bills, group bills, and shared spaces. These money transfer features make the neobank experience more social and seamless than what’s on offer with the traditional banks.
Foreign Currency
When it comes to foreign currencies, the neobanks are in a league of their own. Certain neobanks won’t charge fees for foreign currency transactions. This means no conversion fees, no processing fees, and no weekend markups. It doesn’t get any better than that.
If a neobank charges fees for foreign currency transactions, you might be able to lower or eliminate the fee based on your plan. In nearly all cases, you’ll pay lower fees than with traditional banks, who normally charge 1.75%-2% of the transaction value, subject to a minimum fee.
Neobanks regularly offer a feature that traditional banks do not. They provide foreign currency accounts. This could be a single account with a multi-currency IBAN, capable of converting, sending, and receiving money in over 35 currencies, all within the app. It could be dedicated e-money accounts, denominated in different currencies.
Extra Benefits
Nowadays, a current account can be so much more than just a current account. Neobanks in Ireland are turning this into a reality. They offer a whole range of benefits that are tied to banking with them. What’s important to realise is that, in certain circumstances, the value of these extra benefits often exceeds the price that you pay each month for banking. So, if you use or are planning to use them anyway, you can effectively bank for free. Examples of extra benefits offered by certain neobanks include:
- Travel: airmiles, airport lounge access, eSIMs, travel insurance, car excess insurance, trip cancellation insurance.
- Personal: purchase protection insurance, brand subscriptions, and cashback.
- Loyalty: redeemable loyalty points.
Free Neobank Current Accounts
All major neobanks in Ireland allow Irish customers to open a current account for free. This is incredibly valuable as it allows you to test the bank out indefinitely with no financial obligation. You can also set up multiple backup accounts with different neobanks for free. This helps in the rare case that you encounter an issue with your main account. You’ll usually benefit more from a free current account at a neobank than a paid current account at a traditional bank.
Paid Neobank Current Accounts
When it comes to paid accounts, most neobanks operate a ‘tiered’ or ‘plan-based’ pricing system. There will normally be between 3-4 paid plans. They typically cost between €3.99 and €18.99 per month for premium options. As a rule of thumb, the higher the monthly cost, the more features you’ll receive. Better budgeting tools, higher deposit rates, lower transaction fees, subscriptions, insurance, and extra customer support are just a few examples.
Whether a given tier with a neobank is ‘worth it’ will depend on your own specific needs and preferences. There is no one size fits all current account. If you often use the features included within a paid plan, it can pay for itself many times over. This is especially true when it offers free subscriptions, enhanced loyalty points, higher deposit rates, or lower transaction fees. Better budgeting tools can lead to significant indirect savings by promoting good money habits - if you actually use them.
If you intend to use your current account for basic banking only, then stick to a free plan. When using a free plan, remember that ATM withdrawals and foreign currency transactions often have lower limits before you pay a fee. If you use those features regularly, it might be more cost-efficient to upgrade your plan. If you already pay for a subscription included as standard with a specific plan, and the price of the plan matches or falls below the price of the subscription, then you could bank for free. This is why your own customer profile is so important when choosing a current account.
It’s no secret that neobank customer support is online only. You’re either engaging with an FAQ, texting an AI chatbot or a real agent, and/or calling customer support staff. There is no physical branch that you can walk into. That said, the importance of in-person customer support is often debated. FAQs and AI chat support effectively resolve the majority of queries with speed and accuracy at any time of the day. Around 65% of customer support queries are currently resolved without human intervention.
AI chat support can often be bypassed by requesting to speak with a real customer support representative. You need to type ‘Agent’, ‘Talk to a Human’ or a similar prompt into the chat. Plus, neobank chatrooms let you share video, photo and audio files. This helps you describe your issue more accurately, like through screen recording.
How often have you solved a banking problem by visiting a branch and talking to staff? The more likely scenario is resolving it over the phone. Guess what? Neobanks have phone support too; it’s usually just not available on a free plan. But that’s just like a traditional bank, where part of your monthly fee pays towards the luxury of having phone support. Neobanks regularly offer 24/7 call support, unlike traditional banks.
Key Insight: In reality, what people are most fearful of is having their neobank account ‘blocked’ or ‘restricted’ and not being able to get an answer from customer support. Here are the facts.
Most of the time, a neobank will only restrict your account if you don’t send the requested documents by a certain deadline. This is a legal requirement under Anti-Money Laundering (AML) and Know Your Customer (KYC) laws. When this happens, customer support doesn’t have the legal authority to unblock your account or explain why it was blocked. You just need to provide the bank with the documents to allow them to complete their review.
Even if the bank closes the account, they legally can’t keep your money. You’ll get it back immediately, unless a court says otherwise. If you’re truly concerned about this being an issue, you can open multiple accounts with different neobanks on free plans. Then, keep cash with one or more of them in case of an emergency. You can avoid account restrictions in most cases, just enable notifications and don’t ignore any requests for information.
Switching To A Neobank
Switching your current account from a traditional bank to a neobank is easy if you know how. We’ve developed a comprehensive step-by-step guide to help you do this. You can read our current account switching guide here. Switching your current account from a traditional bank to a neobank is easy if you know how. We’ve developed a comprehensive step-by-step guide to help you do this.
Learn how to switch your current account step-by-step in our Current Accounts Switching Guide.
Neobanks Available In Ireland
There are four main neobanks operating in Ireland:
Revolut is the most popular neobank in Ireland with over 3 million users. Ideal for earning travel rewards, paying low foreign currency fees and securely shopping online.
Monzo is the latest neobank to enter the Irish market and the only challenger to be directly authorized and regulated by the Central Bank of Ireland. Great for security-conscious spending, group budgeting and card transactions abroad.
Bunq is the second largest neobank in Europe with a unique focus on automation. Excellent for managing bills, detailed budgeting and automating your finances with multiple Irish IBANs.
N26 is the first digital bank in Europe to receive a full German banking license, now serving over 8 million customers. Perfect for fee-free worldwide card spending, advanced budgeting and high security through keyless authentication.
Neobanks Frequently Asked Questions
Yes, neobanks are covered by the same EU rules and regulations as traditional banks, making them perfectly safe for use. You can read more about these laws in our helpful banking regulations section.
Yes, opening multiple current accounts with different neobanks can be a good idea, provided you stay on the free plans. Keeping emergency funds in one or more backup accounts can give you peace of mind in the event that there’s a temporary restriction on your main account.
Yes, you can get a mortgage if you use a neobank. Having a current account with a traditional bank is not a requirement for a mortgage and does not improve your chances of getting mortgage approval.
Not directly, but in some cases a neobank may work with a third party, such as PaysafeCash, to facilitate cash deposits.
They have to, IBAN discrimination isn’t permitted under EU law. If they refuse, file a formal complaint and inform them that they’re in breach of their obligations under Article 9 of the SEPA Regulation. If you’re unhappy with their response, escalate the matter to either the CCPC (for utility companies) or the Central Bank of Ireland (for employers).
Yes, neobanks are protected by the Deposit Guarantee Scheme. That means your money is protected up to €100,000 when placed into a neobank current account.
