Britain’s Revolut filed a formal application for banking licensing this week. Established British banks are bracing for rule changes domestically and internationally, as more digital-only banks are ever-closer to legal parity with legacy institutions.
Also read: Bitcoin Businesses Refused Accounts as UK Banks Consolidate Power
Without a License, Britain’s Digital-Only Revolut Has Nearly One Million Customers
“Even without a banking license, we have attracted over 950,000 users across Europ
e,” Nikolay Storonsky, digital-only bank Revolut’s founder and CEO, told Reuters, “many of whom consider Revolut as their primary current account and spending card.”
Banking law changes from the European Union (EU) and Britain are coming fast in an effort to make the stodgy and notoriously clubby industry more competitive. The EU fears a resilient United Kingdom financial technology (fintech) insurgency in the wake of Brexit. British banking authorities worry policies designed to protect insiders might stall its growing competitive fintech advantage.
These add up to an over-the-shoulder-looking few years ahead for legacy banks, as digital-only banks apply for formal licensing, which Revolut has done. The company joins already-licensed digital-only banks N26, Starling Bank, and Monzo who are looking to take advantage of the rule-loosening, enabling them to tap into customer data long held exclusively by big banks.
Significantly, fintech lender “Cashplus said last week it was considering applying for a UK banking license, while telecoms giant Orange has launched its own bank in France in a bid to steal established lenders’ market share by capitalizing on the rise of smartphones,” Reuters also reported.
Beyond Banking with Bitcoin
Revolut’s license will be secured through the Bank of Lithuania, the country’s central bank, and the company plans on a rollout of services throughout Lithuania, Estonia, Latvia, the United Kingdom, and then on to Germany, France, and the remainder of the EU.
Such newer banks will be better able to pivot in an increasingly faster-paced market. For example, Bitcoin.com Communications Ambassador, Sterlin Lujan, was able to snag an exclusive interview with Revolut’s CEO and founder, Nikolay Storonsky. Mr. Storonsky revealed his company will soon integrate bitcoin into its services.
Asked about their potential bitcoin integration, its CEO answered, “The normal user to get access to bitcoin is quite difficult at the moment” through traditional banking services.
Frictions such as “downloading the app, know-your-customer (KYC) procedures, and customers will have to leave a lot of money there,” he said. “They charge money to withdraw, buy, sell, and buy-back bitcoin. You lose a lot of money that way,” Mr. Storonsky explained.
“Our idea is to give customers no friction at all. They’re already onboarded. They’re already account-funded. Already KYC’d, right. We have almost one million of them,” he detailed. “They’ll be able to buy and sell bitcoin with one click. No friction at all.”
Asked about Revolut’s ultimate goal, Mr. Storonsky said, “We have retail accounts. We have business accounts. We want to enable payments between businesses and consumers,” he acknowledged.
“For example, right now the big problem is when I pay for something on the internet, I am charged fees: issuing fees, Mastercard and Visa fees, etc. We are planning to give every business a Revolut account. They can put on their website a ‘Pay with Revolut’ button, and money is transferred from customers to businesses, frictionless as well,” he claimed.
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Images courtesy of: Pixabay, Revolut, Monzo, Starling Bank.
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