Revolut applies for US banking licence days after Canada exit
Revolut has submitted its application for a US banking licence, less than a week after the fintech pulled out of its North American neighbour, Canada.
The UK-founded firm filed its draft application with the Federal Deposit Insurance Corporation (FDIC), and California’s Department of Financial Protection and Innovation.
It intends to eventually launch its payments and banking services in all 50 US states. With a licence of its own, the fintech would be able to offer overdraft protection, loans, and deposit accounts. Currently, Revolut relies on a partnership with Commercial Bank to provide these services.
Nikolay Storonsky, founder and CEO of Revolut
Revolut’s US operations are led by Ron Oliviera, a former US banking executive with experience at Rabobank, Union Bank of California, and Avidbank.
The fintech submitted its UK banking licence application in January. It already has an EU banking license based in Lithuania, which it landed in December 2018.
Revolut has since used this licence to offer banking services in ten more European countries.
Abandon Canada, crack US?
Earlier this month, Revolut decided to pull operations from Canada. Having launched its beta product there back in November 2019, a full launch never came to fruition.
Canada has proved difficult market for challengers to crack due to a difficult regulatory environment and incumbent banks still holding a majority of customer banking loyalty.
Only a small handful of fintechs have established a foothold, including WealthSimple and banking challenger KOHO.
In the US, the disparate and federalised regulatory requirements across the country have proved troublesome. Fintechs are only just starting to gather momentum with US banking licence applications.
In early March, Square officially launched its bank after filing its first application back in September 2017.
Some fintechs have braved the long US bank licence route. In February 2020, Varo Money gained FDIC approval. Others have opted for the acquisition route such as Transact Pro’s purchase of Colorado National Bank (CNB) in 2018, and San Francisco-based LendingClub, which bought Radius Bank for $185 million two years later.
Most recently, the US-based corporate credit card provider Brex – valued at $8 billion – applied for a banking licence, joining fellow US fintech applicant SoFi.
Attracting users
Revolut has accumulated some 15 million customers worldwide. But its European counterparts like N26 and Monzo have struggled to gather considerable user bases stateside.
Alongside its US banking licence filing, Revolut has also unveiled “Revolut Business” in all 50 states to drive up usage.
The business offering, which includes a multi-currency account and a handful of accounting integrations, already has half a million customers globally.
“Small and medium-sized businesses are massively underserved in the US, and we want to empower them with the tools to grow and scale globally,” says Nikolay Storonsky, Revolut’s founder and CEO.
Revolut launched in the US exactly one year ago. It claims to have “attracted hundreds of thousands of customers” since then.
Read next: Revolut exits Canada after trialling beta for year and a half
