British fintech startup Revolut said that it has applied for a banking license with British financial regulator, the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA).
Revolut’s chief executive officer Nikolay Storonsky had said in the past that the firm won’t need a banking license, as banking regulations would hinder its operations. But a reduction in payment card transactions due to Covid-19 has forced the company to pursue new revenue streams for growth.
“A UK banking licence allows us to provide the essential financial products UK customers expect from their everyday primary bank account, such as loans, credit cards, overdrafts and deposit accounts, coupled with the additional trust and security that is offered through FSCS protection,” Storonsky said in a statement.
Revolut was already granted a European Union banking license in Lithuania in 2018, and operates in Central European countries. Still due to Brexit, it had to apply for a separate banking license with the British authorities. It launched in the United States in March, last year.
Revolut, which is valued at $5.5 billion after its last funding round in February last year, where it raised $500 million, is one of the largest fintech unicorns in Europe. It has about 13 million customers in 35 countries.
The company started its operations in 2015 as a foreign exchange app. Today it offers multiple financial products to its customers, including business accounts, peer-to-peer payments solutions, multi-currency cards, and stock and cryptocurrency investment accounts. With the banking license, the company could also disburse loans, get additional security of deposit protection and increase its financial products portfolio as a one-stop financial ‘super-app’ to its users.
Last month, the company rolled out four crypto tokens – EOS, OMG Network, Tezos and 0x, for its users in the Europe Economic Area (EEA). The company had already added bitcoin, ether and litecoin in 2017 as part of its cryptocurrency offerings.
In a blogpost last week, Revolut said that it was granted a temporary registration certificate from FCA for its cryptocurrency business, as per British laws, to protect against money laundering and terrorism financing.