British financial technology startup, Revolut has applied for a banking license in the United States, barely a week after it pulled operations from Canada.
The fintech Unicorn , launched in 2015, is applying for a bank charter with the Federal Deposit Insurance Corporation (FDIC) and California’s Division of Financial Institutions. Revolut partnered with a US-licensed bank to roll out in America earlier in 2020 and claims it has already attracted tens of thousands of local customers.
The launch of its app and service in the US market came in partnership with Metropolitan Commercial Bank. Before March 2020, Revolut’s services, which attracted over 15 million customers, had been available in the UK and Europe with US applicants previously being held on a waiting list.
The challenger bank already holds a Specialised Banking License from the Bank of Lithuania, which allows it to offer and passport a wider range of solutions to customers in Europe. The fintech is also applying for a banking licence in the UK.
The six-year-old startup offers FX, stock and crypto brokerage as well as peer-to-peer Payments . A bank charter permits the company to operate an independent bank that will reduce reliance on third-party financial institutions and allow it to provide deposit-taking, custody and fiduciary services.
Revolut Branches into Banking
“A US banking licence would ultimately enable us to provide US customers with all the essential financial products and services they can expect from their primary bank including loans and deposits. We’re on a mission to build the world’s first global financial superapp, and pursuing a US banking licence is an integral part of the journey,” said Revolut Co-Founder and CEO, Nik Storonsky.
Revolut has been among a number of app-only fintech companies that are looking to branch into banking as they diversify their revenue stream and bring new services to their existing customers. Other financial technology companies including Square Inc, the payments company launched by Twitter CEO, Jack Dorsey and Varo Money have already got the nod by federal and state regulators to open a bank.
Outside the payments domain, cryptocurrency exchange, Kraken secured approval from a state regulator in the US to launch a crypto bank under an SPDI charter. Kraken applied for a bank charter under Wyoming’s special-purpose depository institution law.
The move comes as Revolut expands into new markets, most recently launching its app and service in Japan, which marks its first leap into a non-English speaking market. The European fintech startup has already completed a successful beta launch where the firm tested the service with 10,000 Japanese users.
