Following on from the recent licences in Singapore and Japan, challenger Revolut has got its European banking licence.
The “specialised” bank licence was facilitated by the Bank of Lithuania. This type of licence was introduced by the Bank of Lithuania in 2017. It has a minimum capital requirement of €1 million (a traditional bank is €5 million), and excludes some investment services and also complex financial services.
Revolut will begin implementing the licence next year, and plans full current accounts, consumer lending and commission-free stock trading. Customers will also be able to deposit their salaries into their Revolut account, which will be protected for up to €100,000 by the European Deposit Insurance Scheme.
“With the banking licence now secured, commission-free stock trading progressing well and five new international markets at final stages of launch, we are living up to our reputation as the ‘Amazon of banking’,” says Nik Storonsky, founder and CEO of Revolut.
The firm will initially focus on smaller European countries, before eventually passporting the licence to “key markets” including the UK, France, Germany and Poland.
It says one of the “key focus areas” for the company is to break into lending. Revolut plans to offer standard overdraft facilities as well as personal and business loans at competitive rates.
Invest Lithuania explains: “The move of getting a licence in mainland Europe has been considered by many a hedge against Brexit. Having received both the specialised bank licence and electronic money institution facilitated by the Bank of Lithuania, Revolut is now effectively safe from any decision regarding Britain leaving the EU.”
At the end of 2016, FinTech Futures was invited to a fintech tour of Lithuania. During that trip, the Bank of Lithuania discussed its memorandum of understanding with Revolut. The firm said it intended to set up a financial institution in the country and obtain a banking licence.
Over the last 12 months, Revolut says it has opened between 8,000 and 10,000 current accounts daily and transacted over $4 billion per month in volumes.
As reported last month, it was planning a $500 million Series D investment round, potentially enlisting tech giants like SoftBank to its roster of investors.
This is with a view to launch in the US after the investment round. Revolut has seen major regulatory shortcoming preventing it from starting operations there.
And not forgetting April, when Revolut raised an additional $250 million in Series C funding. The plan was to expand, starting with the US (as above), Canada, Singapore, Hong Kong and Australia in 2018.
It has raised a total of $336 million from investors including DST Global, Index Ventures, Balderton Capital and Ribbit Capital.