Revolut, a London fintech startup that lets vacationers spend money abroad on plastic without running up foreign exchange fees, has processed $500 million (£342 million) of customer money on its cards in just 10 months.
It means $300 million has been spent or transferred over, using Revolut cards, in just 3 months. The last time Revolut disclosed usage figures was back in February, when it said it had handled $200 million.
CEO and cofounder Nikolay Storonsky told Business Insider even he was surprised that consumers took to Revolut so enthusiastically. Volumes are growing 30% each month.
180,000 people now have Revolut cards and Storonsky, a former derivatives trader at Lehman Brothers and Credit Suisse, told BI last month that the startup is currently signing up 1,500 new customers a day.
Revolut is an app linked to a pre-paid MasterCard. It lets people load money from their domestic bank account and then spend in over 90 currencies around the world at the so-called interbank rate, the best exchange rate available with no fees.
Usually, FX (foreign exchange) brokers sell customers money below the interbank rate, making their money through fees and the difference they buy and sell at. But Revolut plans to use alternative revenue streams, such as marketing to consumers through its app. However, it did recently introduce a “fair usage” clauses that charge some fees above certain thresholds, such as a 2% levy on ATM withdrawals above £500 a month.
You can also send money abroad at the interbank rate using the Revolut app and the $500 million figure includes money spent using the cards, sent over the app, and withdrawn from ATMs.
Revolut revealed the transfer figure alongside news that it has been licensed by the FCA.
Storonsky told BI: “The FCA really helped us a lot. We applied for an FCA licence in January of this year and we’ve already received it. It only took 4 months to get it done.”
Up until now Revolut was classed as a technology company and partnered with FCA-licensed Paysafe Financial, using its licence to conduct business.
Storonsky says: “We were very surprised our application was so short. It was a positive surprise. They called us on a weekly basis, they pushed us. Usually, it takes 6-9 months to get an e-money licence. I think the reason why they did is because they really care about consumers.”
70% of Revolut customers come from the UK while the rest are in Europe. The majority of spending is in US, Storonsky says.
Storonsky told us last month that his startup is currently raising a £10 million funding round and he told us this week: “There is progress and we’re going to announce something very soon.”
Revolut has to date raised $7 million. Early “seed” investors include two of London’s most revered venture capital offices: Balderton Capital, which has backed the likes of Betfair, Zopa, and LoveFilm; and Index Ventures, backers of TransferWise, Facebook, and Dropbox.
Now that Revolut has an e-money licence, the next thing it wants to do is get a licence to issue cards, something it’s currently still doing through Paysafe.
“Right now we are getting MasterCard membership, that will effectively allow us to become an issuing bank,” Storonsky says. “As soon as we get it we will start launching business accounts and launch it in other countries as well.”
Storonsky says the US and Australia are high on Revolut’s list of international expansion destinations.