American Banker & Onfido: Creating digital trust – anchoring users to real identities | Webinar
British fintech company Revolut has partnered with Mastercard to expand its US operations by the end of the year.
The deal means that all of Revolut’s first US debit cards will be issued alongside Mastercard, while at least half of its European cards will be branded with the payment giant..
Revolut CEO Nikolai Storonsky said the firm will also use some of Mastercard’s new technologies, including a platform that allows payments to be sent directly from one card to another..
«When we tried to launch in the US two years ago, Mastercard was our first offering.», – Storonsky told CNBC in a telephone interview, adding that he believes the company has «great technology and great infrastructure».
Revolut, one of the fastest growing bank account providers in the world, seeks to undermine the market positions of such famous players as Bank of America BAC.N and JPMorgan Chase JPM.N – in everything from currency exchange to checking accounts and money transfers..
«We are going to make our product more beneficial for our customers, most US banks charge $ 10 per month for account management and $ 10-15 for local transfers, and we will offer both options for free.», – told Storonsky Reuters.
Revolut’s deal with Mastercard will allow it to connect to the company’s networks so that Revolut cards are accepted by merchants in 210 countries where Mastercard operates. That being said, Visa will continue to be the network that accounts for 75% of Revolut cards outside of Europe. Visa Says It Still Plans To Support Fintech Company.
The UK banking app aims to hire around 3,500 employees next year as it moves to North America and Asia, bringing the company’s total headcount to around 5,000.
Revolut started in 2015 with a prepaid debit card and currency exchange services that allow people to conduct overseas without paying high fees. Since then, it has expanded its product portfolio, adding support for business accounts and trading cryptocurrencies, and more recently, stocks..
Fintech companies such as Revolut, Monzo and Starling have grown rapidly in Britain, undermining the position of traditional banks by offering generally more attractive services. Most make money by charging users for premium features, rather than lending money like traditional banks do. But now they are faced with the task of obtaining sustainable profits..
Like many of its fintech peers, Revolut has yet to generate annualized profits. The company’s latest reports showed that losses more than doubled in 2018 to £ 32.8m ($ 42.6m), up from £ 14.8m a year earlier. TransferWise is one notable industry exception that has been profitable for three consecutive years.
However, Revolut is growing rapidly and currently registers between 800,000 and 900,000 new users per month..
Revolut is currently in talks with investors for a new round of funding, which could conclude later this year. A recent Sky News report said the company intends to raise $ 1.5 billion through a $ 500 million financing agreement in equity and $ 1 billion in convertible bonds. Storonsky declined to comment on this information.