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.