Unexpected complications for finance

I was aware at some level that the European Union had different rules around privacy and security than the US. I’ve been reading news articles for years that talked about how the EU was introducing this measure to protect users from data mining, or that new requirement to prevent access to their personal or financial information.

Now, in a very real sense this is extremely positive stuff. Who doesn’t want better security and privacy, right? It is absolutely in the best interest of the normal person not to have to worry so much about their bank account getting hacked.

The downfall is that this creates a lot more steps to go through for even something as basic as opening a checking account. And all of these steps require time, and some things have to happen in person, and some information you get online, and some things you wait to receive via snail mail …

Here’s a perfect example: Our personal checking account will be at Best Bank. Kristie and I visited them with Leonel on 22 July to start the process, since you have to be physically present to open an account.

I believe I already mentioned that we couldn’t add Kristie to the account yet, because she doesn’t have a Portuguese Tax ID? We’ll talk about that in a bit …So, the account gets open in my name only for now, but there is initially no money in it – I need to wait two days to receive an email notifying me that the account is now active, along with the SWIFT/IBAN codes so that I can transfer money from the US into the account to fund it. I immediately do so, and I can see it hits the account on 25 July.

I then get another email giving me my username for the bank’s website – no, you do not pick your username, the system randomly generates it for you. However, you still can’t log on – you need to wait for the PIN number, which is also randomly generated and sent via SMS within a couple of days. Did I mention you need a phone to get text messages on?

After a little over a week I can see my money online, which is good. What is NOT so good is that I am still waiting on a debit card, which is coming via post. According to the bank, it goes into the mail on 31 July, but I don’t receive it until 4 August.

Per Leonel, the multi-day lag in the Postal Service is a national problem right now, as the workers are all struggling with extra COVID-prevention disinfectant routines, so I’m not the only person experiencing that particular inconvenience.

One of the nice things about Best Bank is that their site is available in English, and most of the correspondence I receive is in English, too. Not all, mind you … like, the instructions for how to activate the debit card arrive in Portuguese.

I scour their website trying to figure it out, but I eventually give up and call support, where there is someone available to answer questions in English. She helps me get the card activated but lets me know that I should wait 24 hours before I try to use it. Also, the first time I use it should be in a shop or restaurant, NOT at an ATM – that can sometimes mess up the system and they’d have to reset everything.

She also lets me know that I need to wait until I get the PIN number before I use the debit card – and no, that’s not the same as the randomly generated password I was assigned, it’s a different number, which I will receive by mail within a few days (probably).

So, here I am, 20 days into it, still waiting to be able to actually spend my money. I am relatively optimistic that I should be good to go this week, but we’ll just have to wait and see.

The experience with the business banking account is even more complicated, since they had to verify the company before they could activate the account. Once again, I have visibility to my money online, but no easy way to access it for spending yet. There are additional wrinkles which I’ll get into in a different article, too.

Luckily, we have had the ability all along to use our US debit and credit cards, although we are incurring currency conversion fees for some of it. With any luck, we’ll be able to use the local accounts exclusively soon.

Back on the good new side of the ledger – once the local accounts are fully active, they provide some interesting features not available generally in the US. These cards are all “MultiBanco” cards, which mean that you can get cash at thousands of places without fees.

You also pay any utilities or recurring charges directly through your account – for instance, our internet, mobile and electrical services deduct directly from the business account.

You can also transfer money to any other business or person directly at an ATM machine, which is not a service available in the US! When we were at Customs picking up the pets, they wanted us to pay part of the fees this way, and the guy helping us was pretty surprised when it turned out not to be possible with my debit card. We eventually got cash out and gave it to him – I think he then paid with his MultiBanco afterwards.

The important question in all of this is, was there anything we could have done differently? The simple answer is “Yes,” but as usual leaves out a lot of details.

The easiest solution was our original pre-COVID plan. We were intending to be in Portugal in April, and we were going to do all this stuff then so that when we showed up in July it would already be complete. It would have even been simpler for the bank to get Kristie’s tax ID at that time.

Another alternative would have been to set up a personal account at Deutsche Bank while still in the US – they have offices in Porto, although only a few. However, we both felt that this was a bank we couldn’t do business with on both moral and financial grounds.

Charles Schwab offers international banking in the form of no conversion fees and rebates, but 1) doesn’t give MultiBanco privileges and 2) we would have had to have moved all of our investments, which we didn’t want to do. Some other US banks offer similar deals, but they’re not truly integrated with the system here.

There are also a lot of new online-only banks that offer banking for the “digital nomad.” This sounds good, but I have no idea how stable or safe any of them are.

I guess with the combination of COVID and everything else, it would have been next to impossible to avoid complications. The financial crisis of 2008 is also partially to blame, since it was the impetus for a lot of the current regulations – and, it severed some relationships between banks like Santander and Bank of America which would have worked to our favor in those simpler times.

At the end of the day, I’m not 100% convinced that the path we took was the right one, but it was the best we could do with the advice we had and the circumstances we found ourselves in.