Revolut, the fast-growing international money exchange service, has stopped opening new accounts temporarily as it changes licences.
Founder and CEO Nikolay Storonsky told Business Insider: “At the moment, we don’t send new cards. We’re putting people on the waiting list.”
Two sources told Business Insider that the freeze is down to a disagreement with partner Paysafe, a company that issues cards and processes payments on behalf of Paysafe. The sources say Paysafe, formerly known as Optimal Payments, told Revolut to stop issuing new cards after discovering that many cards were being issued outside of Europe. Last week it emerged that Revolut had stopped operating all of its cards outside of the European Economic Area.
Storonsky did not comment on whether Paysafe had told Revolut to stop issuing new cards but said the geographic withdrawal was down to its partners. He says: “Because we work with Paysafe, they are not allowed to open accounts outside of Europe so we had to inform people that for a short time they will not be able to open accounts outside of Europe and then when we get our own licence we can open these accounts again.”
Paysafe, formerly known as Optimal Services, works with Revolut to provide money cards, linked to Revolut’s app, and process payments made through the system. Paysafe declined to comment.
Storonsky said that Revolut is in the process of getting its own issuing licence, which would bring the relationship with Paysafe to an end and allow Revolut to issue MasterCard cards itself. Paysafe has been working with Revolut for a year and a half.
“We’re hoping to get the licence this week,” Storonsky told Business Insider. “We just didn’t want to accept new customers on our [current] issuing bank licence because then it will be quite costly to transfer them.”
Once Revolut receives its MasterCard issuing licence it will start issuing cards again. For now, Revolut is putting customers on a recently set up waiting list that has about 40,000 people on it.
London-based Revolut offers a prepaid foreign exchange card linked to an app. Users load money onto the card using the app and then can spend it around the world, getting the best rate available, directly from MasterCard.
Revolut charges some “fair usage” fees but only for ATM withdrawals of over £500 a month and spending of over £5,000 a month. The service has proved hugely popular with consumers, with more than 330,000 people signing up and a billion dollars spent on its cards.
The licensing change comes a week after London-based Revolut radically scaled back its operations. The startup had offered cards globally, but has now limited operations to just the European Economic Area. Storonsky told BI that a few thousand accounts had been closed as a result of the change. They were given a few day’s notice to transfer money out of the app.
Storonsky says Revolut plans to return to markets such as Australia and New Zealand when it gains its MasterCard licence. He says: “We will start creating new business and re-enable customers country-by-country. That is how it will work, probably in Q1 next year.”
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