Revolut has received its banking license from the U.K. Prudential Regulation Authority.
The license comes three years after Revolut initially applied for a license in 2021.
Revolut currently holds a E.U. banking license, as well as a banking license in Mexico.
International challenger bank Revolut has now received its official banking license in the U.K. The London-based company first applied for the banking license in 2021, and today, after three years of patiently waiting, the U.K. Prudential Regulation Authority (PRA) granted the license.
With its new banking license, Revolut can now take and hold deposits for its 9 million U.K. customers. It can also sell financial products such as loans, credit cards, overdraft protection, and savings accounts to U.K. consumers. The PRA has set initial restrictions on the license, however. Revolut is currently in what the regulator calls a mobilization period. During this period, the fintech cannot hold more than £50,000 in customer deposits. This limit will allow Revolut to test its systems and flag any issues before it begins to scale.
“Today’s announcement is a significant step forward for Revolut and for our customers. It is a tremendous responsibility to be a bank in the UK and we will work relentlessly to offer products and services that improve the financial lives of everyone who uses Revolut,” Revolut’s UK CEO Francesca Carlesi said in a statement.
Revolut’s end consumers will not see much will change. They will, however, benefit from having $109,500 (£85,000) in deposit insurance if the bank fails.
Revolut initially launched in 2014 and has since been operating as an e-money payments company in the U.K. The company received its E.U. banking license in Lithuania in December 2018 and since then has begun expanding its banking services across Central Europe. The company also has a banking license in Mexico. In other regions where Revolut operates, it relies on partner banks to hold customer deposits.
According to CNBC, one reason why it has taken Revolt three years to obtain the license is that Revolut’s share structure did not align with the PRA’s rules. Revolut had six classes of shares and ended up having to leverage SoftBank last October to restructure its ownership into ordinary shares. Another source, Banking Dive, said that faulty IT controls were to blame for the delay.
From a competitive standpoint, this is a big deal for Revolut. With its 45 million customers across the globe, the company joins fellow London-based competitors Monzo, N26, and Starling, which all have U.K. banking licenses. Other competitors Wise and Monese still do not have their banking licenses.
“We are incredibly proud to reach this important milestone in the journey of the company and we will ensure we deliver on making Revolut the bank of choice for UK customers,” said Revolut CEO Nik Storonsky.
Photo by Lina Kivaka
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