Financial Economics - Revolut waits for their banking licence

To lend money to customers, businesses need to apply for and gain approval for a specific type of banking licence. This is an important example of a regulatory entry barrier. UK-based mobile finance company Revolut has been waiting nearly two years for the Financial Conduct Authority and Prudential Regulatory Authority to make their decision.

Millions have downloaded and use the Revolut app. But the hurdles are real – not least because of concerns about their business model. According to the FT, fees from crypto trading were Revolut’s single biggest source of revenue in 2021, accounting for a third of its reported £636mn. Other streams include subscription services for higher-tier cards and lending products in Europe such as a buy now, pay later service.

Revolut is a digital financial technology company that provides banking services through its mobile application. The company was founded in 2015 by Nikolay Storonsky and Vlad Yatsenko and is headquartered in London, UK.

Revolut's mobile application allows users to hold and transfer money in multiple currencies, make purchases with a prepaid debit card, and access various financial services, including budgeting tools, insurance, and cryptocurrency trading. The app also provides real-time notifications and alerts for transactions and account activity, making it easy for users to track their spending.

Revolut is known for its competitive foreign exchange rates and low fees for international money transfers and ATM withdrawals. The company has gained popularity among frequent travelers and expatriates who need to manage their finances across multiple currencies.

Revolut has grown rapidly since its launch and now has millions of users worldwide. The company has expanded its services to include business accounts, savings accounts, and investment accounts, among others.