Revolut exits Canada after trialling beta for year and a half
UK fintech Revolut has decided to pull operations from Canada after launching its beta product there back in November 2019. An official launch never came to the North American region.
In an email sent to customers yesterday, Revolut said it was discontinuing its Canadian beta effective immediately.
Canada is a difficult market for challengers to crack
The tiered wind down for current customers will first cease account top-ups from 29 March, followed by the end of physical card offerings on 12 April, and finally account access will cease on 15 May.
“This has been a difficult decision,” Revolut states in the customer email. “We very much hope to be able to return to Canada in the future but we’re sorry to be saying au revoir until then,” the fintech adds in a note to BetaKit.
Revolut’s deal with Visa in September 2019 saw the fintech set up shop in four new countries – Singapore, the US, Australia, and Canada – that year.
Despite its losses doubling to £33 million ($43 million) just a year before, the ambitious expansion plan was paired with a hiring commitment of 3,500 new staff.
Bye bye Canada, hello ten new markets
On 4 March, Revolut launched as a bank – as opposed to a payments firm – in ten more European countries using its Lithuanian banking licence.
Revolut customers can open insured deposit accounts in Bulgaria, Croatia, Cyprus, Estonia, Greece, Latvia, Malta, Romania, Slovakia, and Slovenia.
Having accumulated some 15 million customers worldwide, Revolut now seems to be doubling down on banking services.
Such offerings will generate stronger revenue streams than mass global expansion of the same – arguably limited – payments-based product it launched back in 2016.
The fintech is also applying for a banking licence in the UK, having landed its licence in Lithuania back in 2018.
Having broken even late last year, it’s likely Revolut’s strategy will focus on keeping this momentum which it has, in the past, lost. Having broken even once before, shortly followed by more losses.
Canadian banking market
Canada is a difficult market for challengers to crack. Fintech start-up Wealthsimple, which started out as a wealth management service, has rapidly expanded into banking and trading services.
In October, Wealthsimple landed a $1 billion valuation, transporting it into the unicorn club.
Revolut’s competition also includes banking challenger KOHO.
But due to a difficult regulatory environment, incumbent banks still hold an overwhelming majority of customer banking loyalty.
These traditional firms are also beginning to invest in their own challenger offerings. Royal Bank of Canada (RBC) revealed its plans to create a digital bank for “super-affluent” US consumers in February 2020.
Whilst this focus is on US rather than Canadian customers, plenty of incumbent-birthed ventures focus on domestic markets.
This includes an all-digital, mobile-first bank set up by ATB Financial, which launched in March 2020, and wholly owned RBC banking offering for children and teenagers aged eight to18, called Mydoh.
Read next: Canadian robo-advisor Wealthsimple lands unicorn status with $87m raise
Revolut don’t care about customers. Been 3 months unable to access their app due to a problem from their side and all they say is looking into it for 3 months