Challenger bank Revolut announced the launch of its new Auto-Exchange feature this Tuesday.
Playing on one of the bank’s core strengths, its foreign exchange solutions, Auto-Exchange allows users to immediately exchange funds – fiat or crypto – at a preset price.
For example, if I am going to America on holiday and want to exchange £100 for US dollars, there may be a specific exchange rate that I want to get.
In order to get that exchange rate, I go to the Auto-Exchange feature in the Revolut mobile application. I then set the exchange rate I want and, if and when the market hits that rate, the Revolut application will automatically convert my £100 into US dollars.
If I have some dollars left when I am returning from my holiday, I can then convert the funds back into pound sterling by switching the equation around.
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Having returned from said holiday, I may be terrified of Brexit and think the pound is going to collapse. If that is the case, I could then use the Auto-Exchange system to convert my pounds, as sterling goes into free-fall, to dollars or euros so that my money doesn’t lose all of its value.
Back to basics
Foreign exchange is Revolut’s bread and butter – as it is for most other challenger banks.
Like Monzo and Starling Bank, Revolut started out by providing cards that could be used abroad without paying exorbitant fees and high spreads.
In a statement released on Tuesday, Revolut did say that it may not always be able to fill orders that have been set using the Auto-Exchange system.
“If the rate moves more than 0.75% on either side of your target value for fiat currencies, or more than 5% on either side of your target value for cryptocurrencies, we won’t carry out your auto-exchange,” said the firm. “Once your target value hits again, we’ll re-attempt the auto-exchange.”