Inside Revolut: 5 banking and payment products
What started six years ago as a prepaid debit card that made it easy for customers to use their debit cards anywhere in the world, in the currency of their choice, has grown into a billion dollar challenger bank that now worth over $ 53. NatWest, one of the Big Four UK retail banks.
In July, London-based Revolut raised $ 800 million in funding for a valuation of $ 33 billion, making the company the most valuable private technology company in UK history and one of the best-funded FinTechs not only in Europe but in the world in general.
Read more: Revolut’s $ 33 billion valuation reflects promise of an open bank
The company, which bills itself as a ‘financial super app’, was launched in 2015 as a money transfer service before expanding its services to include digital banking, stock trading, crypto features. -money, among others, for its 16 million customers and more around the world.
The company’s goal is to use new investor money to expand into new products and markets, including the United States and India, a move similar to what others, such as the Swedish startup Klarna, have borrowed to branch out into a wider range of other services for consumers and businesses.
See also: Revolut CEO aims to increase sales ahead of IPO
Earlier this month, Bloomberg announced that the startup would postpone an initial public offering (IPO) until it achieves billions of dollars in annual sales: revenue per year, ”said Nik Storonsky , CEO and co-founder.
Storonsky added that the FinTech unicorn will need to expand to include more lines of business, with “more and more companies entering a business model where they sell a lot of products rather than a single line product.” .
In 2020, the company’s adjusted revenue was £ 261m (around $ 354m), but its operating losses doubled to £ 201m (around $ 272m) in 2020, due to the increase in personnel costs in a context of rapid growth in the world.
In this article, we deepen and take a look at the various products and services related to the “financial super app” which attacks traditional service providers with a more personalized and innovative service.
- Open bank
Revolut’s products include digital banking for its users, offering a variety of options ranging from a free standard plan to a £ 12 Metal plan. Users can earn up to 1% cash back, among other benefits.
The company has made it easy to sign up for its services, allowing users to open an account in less than a minute once their identity is confirmed. Users can also connect all of their bank accounts to Revolut to easily monitor their money in one app.
In an effort to penetrate the wider US market, the company announced that it had submitted a draft US banking license application in California in March of this year, while launching Revolut Business in all 50 US states.
Related news: Revolut Expands Digital Banking Services to the United States
“A significant part of Revolut’s plans to create the world’s first global financial super app, a US banking license would allow Revolut to provide a wider range of financial products to US clients, including overdraft protection, loans and deposit accounts, ”a press release said. at the time.
And since the launch of its application in the United States in March 2020, the company has secured 300,000 customers, according to Ronald Oliveira, CEO of the American activity of Revolut.
Read more: Revolut’s US credit card strategy puts NeoBank in front of new challengers
The company recently launched a new cross-border payments service between the United States and Mexico, allowing American users to send money at the real exchange rate via a standard international transfer (SWIFT transfer) to recipients in Mexico. , where Revolut is not yet available. .
The Revolut cryptocurrency platform allows customers to “buy, sell and send digital currencies with the push of a button, with no hidden fees.” Users can invest in Bitcoin, Ethereum, and other tokens with over 30 currencies and transact from as little as $ 1.
Customers can stay on top of market movements, receiving in-app notifications when digital currencies hit desired prices while also storing their crypto savings in personal vaults offering up to 0.65% annual interest. paid daily.
Related news: Revolut Uses Bitcoin To Secure Its Largest US Office Space
Earlier this month, the UK-based financial super app used bitcoin to pay for its space in Dallas, Texas – its largest space in the United States to date – with flexible office provider WeWork, reported PYMNTS. The deal was the first time that a WeWork corporate customer had used bitcoin, or any cryptocurrency, for payment.
- Stock trading
The company announced this month that it will launch commission-free stock trading for U.S. clients after obtaining a broker’s license through the Financial Industry Regulatory Authority. As an “introductory broker,” the company will rely on DriveWealth, a New Jersey-based financial technology company, to complete the transactions.
Read more: Revolut offers commission-free U.S. equity trades
“We are building a single app where people can manage all aspects of their finances, from banking and foreign exchange to cryptocurrency and stock trading,” Storonsky reportedly told CNBC this month. “We look forward to breaking down common barriers to entry into equity trading such as account minimums and complex interfaces. “
The service will be available in a few months and, like its competitors Robinhood and Square in the retail investment space, Revolut will collect payment for the revenue from the order flow in the United States, according to a spokesperson, according to the CNBC report. .
- Savings deposit box
In July, Revolut announced the launch of a Daily Interest Savings Vault which allows UK customers with a standard Revolut plan to earn 0.15% daily interest on money in their GBP vaults.
In addition to paying interest daily, users will benefit from the added flexibility of having no minimum commitment for the duration of the deposit or a cap on the amount of the deposit.
Users can round off their card payments and deposit money or save their change to their vaults via recurring or one-off transfers.
“To date, Vaults has helped over 2.5 million people achieve their financial goals,” said Marsel Nikaj, chief savings officer at Revolut. “Now, we’re excited to roll out daily interest-free savings vaults to standard plan users to help them reach their goals faster. “
Nikaj added that the company looked forward to making this product available to European markets in the coming months “to allow anyone to earn money on their savings, even in an environment of negative interest rates.”
- Buy now, pay later
Instead of paying up front for everything, Revolut users in Europe will soon have the option to spread the cost of online and in-store purchases over a period of time as the company aims to enter the booming industry. purchase now, pay later (BNPL). year.
Once a niche form of credit, the payment method received a lot of attention in the wake of the pandemic, and it has become a major payment method in several markets.
In the UK, for example, use of BNPL products nearly quadrupled in 2020 and stood at £ 2.7 billion in February 2021, with 5 million Britons using the products since the start of the pandemic, according to the country’s Financial Conduct Authority.