UNITED KINGDOM – British-based digital banking app Revolut has announced plans to begin issuing its cards in the United States by the end of this year.
The expansion to the U.S market was made possible through a partnership with payments company Mastercard Inc, the fintech firm explained in late October this year.
The announcement follows a similar deal last month where Mastercard rival Visa Inc partnered with Revolut as part of its global expansion plans.
Revolut, one of the world’s fastest-growing bank account providers, is aiming to compete with established players such as Bank of America and JPMorgan Chase on everything from foreign exchange to current accounts and remittances.
“We’re going to ensure our product is better value for customers, most U.S. banks charge $10 a month for an account and $10-$15 for local transfers and we’ll be offering both for free,” Revolut CEO Nikolay Storonsky said while speaking on an interview with Reuters.
The two companies revealed that their announcement confirms their agreement to partner on a minimum of 50 percent of all existing and future cards Revolut issue in Europe.
Revolut’s deal with Mastercard allows it to plug into its networks so that Revolut cards will be accepted by merchants in the 210 countries where Mastercard operates.
The British-based banking app aims to hire around 3,500 staff in the next year as it moves into North America and Asia, bringing its total employees to around 5,000.
Recently Britain has seen an increase in number of Fintech firms such as Revolut, Monzo, and Starling that are operating in the country’s financial sector.
These fintech firms have grown rapidly in Britain by slashing their bank charges while at the same time offering more convenient services.
Most make their money from charging a subset of users for premium features, rather than lending money out as traditional banks do.
This model of doing business is however becoming a challenge especially when it comes to building sustainable profits.
Revolut differs from mainstream banks in that customers’ deposits are not directly protected by government guarantees but held in segregated accounts at traditional lenders.
While customers have therefore been slow to entrust their savings to Revolut since its launch in 2015, some 8 million customers have signed up for an account, attracted by its slick app and rock-bottom forex rates.
Entering the US will not be easy for Revolut as customers’ wallets already bulge with multiple cards and local fintech firms such as Robinhood have a head start in offering fee-free stockbroking, one of Revolut’s selling points.