- Fintech disruptor to launch trading service free from commission
- Service available in UK initially before expanding to euro market
- Plans to introduce pre-paid cards in USA
Just days after announcing that it is entering the Russian market after signing a deal with local player Qiwi Bank, the ceaselessly innovating international money transfers upstart Revolut is about to launch a commission-free trading service to its two million (and climbing) users.
The move into investments positions the London-headquartered disrupter bank, which launched only three years ago, as possibly the most aggressive challenger to UK high street lenders and certainly Europe’s fastest growing fintech startup.
The Russian deal gives Revolut access to Qiwi Bank’s payments infrastructure, enabling it in turn to tap banking licenses and technologies for customer ID, card issuance and payment processing.
As matters stand, the company enables cross-border payments in 120 currencies without fees via its digital wallet and pre-paid Visa card. And the latest string to its bow is the new free service for trading in UK and US shares, which it plans to launch in the coming four to six months.
Revolut is partnering with an established brokerage to help shoulder the costs of commissions it pays on behalf of its users. The service will initially be available in the UK but the plan is to extend it to the wider European market shortly thereafter.
Revolut may well have drawn inspiration for the new development from the rapidly-growing US platform Robinhood, which offers free share trading services to over four million people stateside. Fintech innovators like this (and Revolut is clearly no exception) are boldly extending their offerings well beyond their original zone of specialisation in a tireless quest to gain more customers.
Revolut’s Russian-born CEO, Nikolay Storonsky, told the Financial Times: “To put it bluntly, we are going to cause the same disruption in investments as we have done in banking. Brokers are charging people as much as £5 per trade and the user interfaces are typically clunky, slow and confusing for consumers. The pain points are clear for us and the room for improvement is massive.”
The youthful Storonsky, who previously worked for Lehman Brothers and Credit Suisse, created Revolut in 2015, and has since expanded vigorously. Currently, the firm is applying for a European banking licence to operate in Lithuania. In recent months, it broke the two million user threshold, doubling its customer base in just six months.
Earlier this year, the startup threw another new offering before its fast-expanding user base: a service allowing them to invest in three cryptocurrencies (Ethereum, Litecoin and Bitcoin) on top of its recent products in customer loans and travel insurance.
The startup says it is signing up between 6,000 and 8,000 new users every day and has now applied to the Financial Conduct Authority for a licence enabling it to act as a broker buying and selling shares.
Just two months ago in April, Revolut announced a successful fundraising round of £250m, led by Russian venture capitalist Yuri Milner’s firm, DST Global. The latter valued the startup at $1.7bn – over five times its valuation during the first investment round in 2017. Earlier this year, it revealed that it had broken even on a monthly basis.
And it’s setting its sights on the US market too, with plans to introduce its pre-paid cards there in August or September.
