Revolut, $ 33 billion fintech player, launches commission-free equity trading in the United States


Revolut CEO Nikolay Storonsky speaks on stage at the TechCrunch Disrupt conference in San Francisco, California.

Kimberly White | Getty Images

RevolutionThe $ 33 billion global fintech player will soon be offering commission-free equity trading to U.S. clients for the first time, CNBC has learned.

The start-up is expected to announce on Tuesday that it has obtained a brokerage license in the United States, allowing it to compete with Robinhood and Square in the scorching world of retail, according to CEO and founder Nik Storonsky.

Revolut has grown into one of Europe’s leading consumer fintech companies since its inception in 2015 by continuously stacking new features. The app started out as a way for people to avoid currency conversion fees on the go, but quickly added banking, trading, and crypto functionality among dozens of products. Today it has more than 16 million customers.

This approach saw him secure a massive $ 33 billion valuation in July from investors such as Softbank and Tiger Global, companies that see London-based Revolut as a candidate for the creation of the world’s first super. global financial application. But to get there, it must break into the US market, where competitors from Robinhood to Chime have already staked out corners of the fintech ecosystem.

“We are building a single app where people can manage all aspects of their finances, from banking and foreign exchange to cryptocurrency and stock trading,” Storonsky said. “We look forward to breaking down common barriers to entry into equity trading such as account minimums and complex interfaces.”

Revolut was launched in the United States last year just at the start of the pandemic and has since added high-interest savings, small business banking, US-Mexico remittances, and commerce. of cryptocurrency.

Revolut’s trading feature allows users to buy or sell popular US stocks, including Apple, Tesla, and Beyond Meat.


However, retail stock trading may give it the greatest appeal to date: More than 20 million new investors have joined the fray since last year, according to JMP Securities. Amid the trade boom, which has benefited disruptors and incumbents, others are looking to get started: PayPal is working on its own stock trading platform, CNBC reported last month.

Revolut is currently testing its stock trading service, which will allow users to buy ETFs and stocks of companies listed on the NYSE and NASDAQ, according to Ron Oliveira, head of Revolut’s US operations. It will be available in a few months and will eventually allow you to buy fractions of shares and invest the spare currency for card transactions.

It took 16 months to acquire the securities broker’s license through the Financial Industry Regulatory Authority, Oliveira said. Specifically, Revolut is approved to be a “Broker presentation“and will rely on New Jersey fintech DriveWealth to clear transactions, just like Revolut’s European business activities, he said.

FINRA “took a deep dive, they asked a lot of questions because they wanted to see exactly what the consumer experience was,” Oliveira said. “It took them a while to get comfortable, but we’re very happy they got there.”

Payment for order flow

While an executive from Revolut noted in 2019 that its European operations would not be based on order flow payment, an industry practice where market makers pay brokers for client orders, the US company is preparing to take a different approach.

Revolut will receive payment for revenue from the order flow in the United States, according to a spokesperson. Tactics are one of the primary ways Robinhood generates income, and it’s a practice closely scrutinized by Securities and Exchange Commission Chairman Gary Gensler.

Revolut is also working with regulators on its application for a U.S. banking charter in California, first reported by CNBC last year, Oliveira said. This process is unlikely to be completed this year, he said.

The company will eventually aim for a public listing in the UK, US or perhaps dual listing, Storonsky said. After raising $ 800 million in July, Revolut should have finished raising funds from private investors, he said.

“That will be my hope, because the reality is that we are generating free cash flow,” said the founder. “We shouldn’t need additional capital from outside investors.”

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