LONDON (Reuters) – London-based financial technology startup Revolut said on Monday it had completed the first step to apply for a U.S. banking licence, and is launching its services for businesses across 50 states.
One of Europe’s best-known fintech startups, Revolut first opened its virtual American doors at the start of the coronavirus pandemic in partnership with a local bank, following U.S. launches by European competitors Monzo and N26.
The company said a licence would allow it to offer more services to U.S. customers, such as overdraft protection, loans and deposit accounts.
“If you simply partner with a local bank you are not able to provide all the products you need,” Revolut co-founder and Chief Executive Nik Storonsky said in an interview. “You rely on infrastructure and processes of the other bank.”
Storonsky said initial growth numbers in the United States were hit by the pandemic, which forced people to stay home and reduced travel. Revolut is currently approaching 200,000 U.S. retail customers and 15 million globally.
It is now launching its services for small and medium-sized businesses across the United States, which Storonsky said is a more pandemic-resilient offering.
Services include free and instant money transfers between companies that are signed up to Revolut Business, and tools for expense and subscription management.
Revolut’s flagship product is a debit card connected to an app that allows users to spend different currencies at the interbank exchange rate with low fees.
Analysts and investors have been sceptical of whether the incomers could gain ground with U.S. customers in an increasingly crowded digital banking market.
Revolut’s submission of a draft application with the Federal Deposit Insurance Corporation and California Department of Financial Protection and Innovation comes a few months after it announced it had submitted an application for a UK bank licence.
It has held an EU banking licence in Lithuania since late 2018.
Reporting by Anna Irrera; Editing by Jan Harvey