Revolut aims for higher credit offerings and higher income in the United States
The news: The British neobank plans to deploy in the United States a unsecured line of credit this fall and credit card offers at the end of 2021 or in the first quarter of 2022, Ron Oliveira, CEO of Revolut in the United States Financial News said.
More on this: A US credit card offer would mark the first launch of a Revolut credit card outside certain European markets where it can carry its Lithuanian banking license. The neobank seeks to achieve 1 million US users by the end of the year, and conducted a marketing blitz to achieve this goal.
The credit offers, when they materialize, will join a host of other features Revolut has brought to the US market in recent months, including:
- Corporate accounts, which Revolut spear across the United States in late March.
- U.S.-Mexico cross-border transfers, who debuted end of July.
Another sign that Revolut is all-in on the United States is its application for a American Banking Charter in March, which would give it the flexibility to strengthen its deposit solutions and expand into credit products without its US partner bank, Metropolitan commercial bank.
The big takeaway: Preparing credit products for a U.S. release marks another milestone in Revolut’s efforts to monetize its huge customer base as it – and its rivals – move towards profitability.
In August, the neobank also Trek its securities trading charges for the second time in less than a year. This and its plan to offer income-generating credit products in a new market suggests that profit is increasingly the goal of Revolut, instead of focusing exclusively on rampant user growth.
The moment when Revolut is pivoting towards profit generation could be due in part to pressure from its main competitors:
- Its British neobank rival, Starling, has begun reach a monthly profit in October 2020 and expects to make its first annual profit in its current fiscal year, according to CNBC.
- British neobank focused on savings and mortgages Bank of atoms reported its very first monthly operating profit in the quarter ended in June, by AltFi.
- Revolut’s biggest American neobank competitor, Carillon, revealed in September that it made a profit as measured by EBITDA, according to TechCrunch.
Revolution has reached the breakeven point in November 2020, but expanding its product line to include more revenue-generating offerings can help it maintain those profits and prove that it is capable of monetizing its huge customer base.