Digital bank Revolut has submitted its application to receive a national bank charter, according to a note from the company. Having launched in the US about one year ago, currently, Revolut offers banking services in partnership with Metropolitan Commercial Bank. Partnering with a chartered bank has become standard practice for many Fintechs operating in the US market.
Revolut, based in the UK, reports around 15 million customers worldwide. The Fintech has sought to define the digital banking sector with thoughtful services, like crypto investing, without legacy brick and mortar locations.
Revolut’s US CEO, Ron Oliviera, said the draft application has been submitted to the FDIC and the California Department of Financial Protection and Innovation, a first step in the process to obtain a banking license.
A US banking license would allow Revolut to provide a broader range of financial products to US customers including overdraft protection, loans and deposit accounts. Many industry insiders believe that a bank charter is key to long-term success for digital banks to succeed in the US.
Revolut announced in January that it had submitted its application for a UK bank license to the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA). Revolut was granted an EU banking license in Lithuania in December 2018 and has begun rolling out banking services in Central Europe.
Nik Storonsky, co-founder and CEO of Revolut said the US bank charter would enable them to provide US customers with essential financial products and services they can expect from their primary bank including loans and deposits.
“We’re on a mission to build the world’s first global financial superapp, and pursuing a US banking license is an integral part of the journey.”
Revolut touted its progress on business banking reporting over half a million sign-ups to date. Revolut Business allows users to sign-up for multi-currency accounts in minutes, issue physical and virtual corporate cards, make free money transfers in 29 currencies to pay suppliers, partners, or employees all at the interbank exchange rate.
“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,” Storonsky said. “Tackling fragmented processes, high fees, and other business banking pain points, we built an end-to-end solution that saves business owners time and resources to focus on what really matters – running their business.”
Revolut reports that it has signed up “hundreds of thousands of customers” in the US – a highly competitive market with thousands of traditional banks as well as many Fintechs competing to offer banking services. A growing number of Fintechs are pursuing a bank charter either by completing the regulatory process or by acquiring an already chartered firm.
Launched in 2015, Revolut has raised close to $1 billion and was most recently valued at $5.5 billion.