It’s laborious to consider that fintech startup Revolut nonetheless doesn’t have a correct banking license. Many customers will inform you that Revolut’s digital wallets already really feel like conventional financial institution accounts with an IBAN and a fee card. However the startup is lastly making use of for a correct banking license in Lithuania.
This course of goes to take just a few months — the startup expects to get its license sooner or later in the course of the first half of 2018. But when the corporate manages to persuade the Financial institution of Lithuania that it deserves a banking license, Revolut will be capable to supply credit score and deposit companies throughout the European Union because of the banking passport system. In different phrases, Revolut will grow to be a financial institution.
Revolut accounts can even be lined beneath the European Deposit Safety scheme. If Revolut shuts down, it implies that the European Union will cowl your funds and pay you again as much as €100,000 per person.
However, as N26 co-founder and CEO Valentin Stalf advised me final week, “there’s a distinction between getting your banking license and migrating every part to your individual platform.”
Revolut doesn’t plan to begin over from scratch. It should maintain issuing pay as you go playing cards and digital wallets — it gained’t re-issue new debit playing cards for current clients. The corporate simply plans so as to add new options on high of current options.
The corporate additionally needs to scale back reliance on third-party corporations. That’s why Revolut can be constructing its personal fee processor. As TechCrunch’s Steve O’Hear wrote earlier this week, pay as you go customers are usually dearer than conventional present accounts.
Within the quick time period, Revolut will ask current clients in the event that they need to deal with digital cash stability as a financial institution deposit with a purpose to shield it beneath the European Deposit Safety scheme. After that, you’ll be able to count on overdrafts in addition to new credit score and financial savings options.
Along with in the present day’s information, Revolut has shared up to date metrics. The corporate now has 950,000 customers, manages 16,000 enterprise accounts and has dealt with $6 billion in transaction quantity ever because it began. Three non-executive administrators and finance consultants are additionally becoming a member of the corporate to assist in the case of prudential oversight.
So let’s recap a bit. Monzo simply raised $93 million. N26 simply introduced that it could launch within the U.S. and the U.Okay. subsequent 12 months. And now Revolut is getting a banking license. Challenger banks are all iterating at a speedy tempo and combating one another like there’s no tomorrow.