The fintech start-up Revolut is applying for a banking license in Lithuania. The company offers free international money transfers, credit and deposit services.
The financial technology start-up Revolut is reportedly applying for a banking license in Lithuania.
The company, which offers free international money transfers, has 950,000 users, and manages 16,000 business accounts. Moreover, it has handled $6 billion in transaction volume to date. Founded by Vlad Yatsenko and Nikolay Storonsky, the start-up has gained traction since its launch in July, 2015. Revolut is backed by some of Europe`s well-known investors like Point Nine, Index Ventures, Seedcamp, Balderton capital, Ribbit Capital and others.
If the application is successful, Revolut will be able to offer credit and deposit services in the European Union, meaning it will resemble a traditional bank, as reported by Tech Crunch.
However, Revolut will remain focused on issuing prepaid cards and electronic wallets. The company will not issue new debit cards for existing customers as the plan is to build on the features they already have.
In a blog post announcing the application for European Banking License, the company listed some of the main advantages of having such a license:
- Protecting customers` funds under the European Deposit Protection Scheme (EDPS) – according to the company, the EDPS will cover funds up to the first 100,000 euro or about 85,000 pounds in the UK.
- Overdrafts and personal loans – Revolut will have the chance to offer its users overdraft facilities and personal loans.
- Direct debits – the company will support direct debits for different services like gym memberships and utility bills, for example.
- In-house payment processing – Revolut claims they will build their own in-house payment processor that will allow them to offer users a more reliable services, which will supposedly reduce the risk of outages that are out of their control.
- A full banking experience – an opportunity for users to have their salaries paid into their Revolut account, as well as to save money and earn interest on their deposits.
Other financial technology companies are also working to grow their services. For example, N26 announced it will launch in the US and the UK next year. The industry seems like a battlefield, where the competition is fierce. It is expected that this will lead to better financial solutions being rolled out to business and private customers.