Tag: revolut

  • Revolut has big plans for the U.S. market

    Revolut has big plans for the U.S. market

    Revolut applied for a U.S. banking charter on March 5, signifying its determination to become a licensed bank in the world’s largest economy.

    “The United States is a key pillar of our global growth strategy. Filing for a national bank charter is a major milestone toward our vision of building the world’s first truly global banking platform,” Revolut CEO Nik Storonsky said in a news release.

    Applying for the banking charter marks a significant change in strategy for Revolut in the U.S. Previously, the UK fintech unicorn planned to acquire a local American lender, betting that such an acquisition would be the quickest pathway to a banking charter that could finally unlock the U.S. market. An M&A deal would have provided the company with an existing charter and instant passporting across all 50 states, avoiding the long and uncertain process of applying on its own.

    Revolut has been operating in the U.S. since March 2020 as a fintech company in partnership with American banks. While the company boasts about its 1 million U.S. users and the US$500 million it has invested in the country, the reality is that its current American business is small potatoes. One way or another, it needs to become a full-fledged bank to make that investment pay off.

    The UK firm jettisoned its plan to acquire a local U.S. bank because it concluded that acquiring an existing institution was too complex. On the one hand, Revolut realized that an M&A deal wouldn’t necessarily be speedier than applying independently for a banking charter. One reason for that is a change of control in an acquisition still requires a complex, rigorous, and lengthy regulatory approval process in the United States. While this kind of deal might be fast-tracked in certain emerging markets where oligopolies are common across financial services and technology—Indonesia comes to mind—the U.S. is different.

    Additionally, acquiring a U.S. lender would have potentially required that Revolut maintain undesired physical branches.

    It seems Revolut is betting on the U.S. regulatory environment being favorable to its application for a standalone charter. This seems risky to us in some respects, given that the UK firm has a checkered compliance history and still does not have a full banking license back home. And unlike Mexico—where Revolut did recently acquire a full banking license—the U.S. market doesn’t really need an upstart digital bank.

    However, The Wall Street Journal notes the second Trump administration has moved to ease barriers for fintechs, cryptocurrency firms, and foreign banks that want to tap the U.S. market. The Office of the Comptroller of the Currency received 14 new applications in 2025, almost as many as the total for the four previous years combined. The agency has approved several charters since the start of January.

    With its own license to operate in the United States, Revolut would be able to start taking insured customer deposits. That would make it easier for the company to offer lending products like its own credit cards, which it sees as crucial for gaining American customers. To offer those right now, it would have to borrow from the capital markets. With a banking charter, Revolut would also gain access to payment systems such as Fedwire and A.C.H.

     “For our long-term ambitions, the best thing for us is to be directly regulated,” Sid Jajodia, the company’s chief banking officer, told The New York Times.

    If Revolut succeeds in its banking charter application, we expect that it will pave the way for a U.S. IPO—something it has been mulling (if not explicitly planning) for a while now. If not, we expect that the company will keep trying to crack the U.S. market, since it never gives up easily.

  • Is Revolut’s rise unstoppable?

    Is Revolut’s rise unstoppable?

    Since its inception, Revolut has had a sweeping global vision. Not always a realistic one—as seen by its negligible presence in China and regulatory struggles in India—but almost always more ambitious than its competitors.

    After all, what other fintech startup is valued at US$75 billion, has 70 million users, and purports to be building the world’s first truly global financial “super app”? There are more valuable fintechs, like Stripe, but the latter company focuses on the more niche area of B2B payments and building digital payments infrastructure.

    In contrast, Revolut focuses on the ultra-competitive retail banking market, which is probably the toughest segment for digital upstarts to break into. While rooted in the UK, it has strong retail footprints in the Central and Eastern European (CEE) region (10+ million users) and is rapidly growing in Spain. While the UK company is investing heavily in business accounts, its overarching growth goal is to achieve 100 million retail customers globally by mid-2027.

    Scaling up its banking operations beyond Europe will be integral to achieving that 100 million user milestone. To that end, Revolut launched full banking operations in Mexico on January 27, marking its first, and major, expansion into Latin America and its first banking presence outside of Europe. The company operates as a fully licensed local bank—Revolut Bank S.A., Institución de Banca Múltiple—following authorization from Mexico’s National Banking and Securities Commission (CNBV).

    The UK fintech unicorn says that it is the first independent digital bank to obtain a banking license in Mexico through a direct application and has capitalized its operations with over US$100 million—more than double the regulatory minimum. The company estimates that this provides a Capital Adequacy Ratio (CAR) of 447.2% at launch.

    Targeting Mexico’s underbanked, Revolut aims to disrupt a market dominated by a few heavyweight incumbents. Its offerings include 15% interest on deposits, instant cross-border transfers (targeting the $60 billion+ US-Mexico corridor), and a suite of over 30 currencies.

    There are several reasons to be sanguine about Revolut’s Mexico foray. First, the company is right to see significant revenue potential in the world’s largest remittance corridor (U.S.-Mexico). Second, Revolut has a first-mover advantage as the first independent foreign digital bank in the country to secure a direct banking license. Third, Mexico can serve as a springboard for Revolut’s regional expansion—which includes Brazil, Colombia, and Peru.

    Of course, offering a 15% deposit interest rate is not sustainable, but neither is it intended to be. Revolut aims to have 2 million Mexican clients by year-end: It needs a way to attract a lot of customers in a short period of time.

    While Revolut is charging full-speed ahead into Latin America, it has no choice but to move more slowly in the United States. The U.S. banking market is not an easy nut to crack for disruptors, and Revolut is gradually adjusting itself to this reality.

    As of January, Revolut had jettisoned plans to acquire an existing American bank and is instead pursuing an independent U.S. banking license from the OCC. The UK firm decided that acquiring a traditional bank was too complex and slower than expected, opting for a digital-first approach under a new, standalone charter.

    This change represents a significant change in Revolut’s U.S. market strategy. An M&A deal would have provided the company with an existing charter and instant passporting across all 50 states, avoiding the long and uncertain process of applying on its own.

    It seems Revolut is betting on the U.S. regulatory environment being favorable to its application for a standalone charter. This seems risky to us, given that the UK firm has a checkered compliance history and still does not have a full banking license back home.

    If Revolut succeeds, we expect that it will pave the way for a U.S. IPO. If not, we expect that the company will keep trying to crack the U.S. market, since it does not give up easily.

  • Revolut’s Nordic expansion is about more than challenging Klarna

    Revolut’s Nordic expansion is about more than challenging Klarna

    UK fintech giant Revolut, riding high on a new and improved valuation of US$75 billion, is set to challenge buy now, pay later (BNPL) juggernaut Klarna on the Swedish company’s home turf—and immediate environs. Revolut announced on November 6 that it would open a branch in Stockholm in 2026. The Swedish capital is home to the headquarters of Klarna.

    While Klarna’s largest market by revenue is the United States, its footprint runs deep and wide in the Nordics. About 82% of Swedes use Klarna. On the merchant side, a Dec. 2024 study by e-commerce market intelligence firm ECDB found that about half (47.2%) of Swedish online stores offer Klarna Invoice, while about 39.2% do so in Norway. These are the highest merchant adoption rates among e-commerce merchants in any market where Klarna operates.

    Yet Revolut’s interest in Sweden and the Nordic countries is not just about throwing down the gauntlet to Klarna. The UK fintech has long had a presence in the Nordics, where it already has 2 million customers, half of whom are in Sweden, and intends to increase that number to 3 million by the end of 2026. Chief Growth Officer Antoine Le Nel has emphasized that Revolut is, as usual, thinking very big: It wants to take on incumbent Nordic banks that control most consumer deposits, not just Klarna.

    Revolut’s new Stockholm branch will operate under the UK firm’s European banking license from Lithuania, allowing it to function as a local bank. That means Swedish customers could soon receive salary payments and local transfers entirely through Revolut. The company is also preparing a local product push consisting of daily-interest savings accounts in Nordic currencies, commission-free ETF investing and Apple’s tap-to-pay feature for small businesses.

    It all sounds promising—except that UK regulators have some concerns that Revolut may be biting off more than it can chew—though they issued the company a provisional banking license in 2024. In mid-October, The Financial Times reported that regulators are unsure that Revolut can implement risk controls able to keep pace with its relentless international expansion.

    Nik Storonsky, Revolut’s CEO and co-founder, said in September that his top priority was to get a UK banking license, to transfer customers into the new bank, and to offer them credit products. He and other Revolut executives hope to obtain the final license this year, but that seems unlikely with less than two months to go in 2025.

    Having managed to grow its valuation from US$45 billion in August 2024 to an eye-popping US$75 billion in just over a year, Revolut is betting that it can have its cake and eat it too: continue its brisk international expansion – it also set up shop in Colombia in October – and before long, receive a full banking license in the UK that will allow it to go head-to-head with large incumbent lenders. Driving Revolut’s confidence are growth across its business lines and in profitability. In 2024, Revolut’s profits jumped 150% to US$1.4 billion, while revenue rose 75% annually to $4 billion. Cryptocurrency, wealth management and subscriptions are now all key growth engines for Revolut.

    In 2026, Revolut will look to follow in Klarna’s footsteps and carry out a successful IPO. The Swedish firm listed on the New York Stock Exchange (NYSE) in September, raising US$1.37 billion at a valuation of $15.1 billion.

    Ironically, following the successful IPO, Klarna chairman Michael Moritz reportedly told employees: “We are 10 years behind Revolut.” While Moritz did not elaborate, we can make an educated guess that he was referring to Revolut’s successful diversification from payments into full-service banking, insurance, investing, and digital assets. In contrast, Klarna remains heavily dependent on payments and especially BNPL. It is that strong, diversified product portfolio and Revolut’s indefatigable persistence that could eventually pose a significant challenge to Klarna in its home market of Sweden and the broader Nordic region.