Revolut’s super app takes aim at POS providers | PaymentsSource
Revolut’s global expansion has been largely digital and in line with the company’s roots as a mobile payment app. But now the company has added a dose of hardware.
The London-based company’s Revolut Reader, launched last week, is the company’s first physical product. It supports chip and PIN cards as well as contactless cards and mobile wallets. Revolut competes in a crowded and relatively old market to offer point-of-sale hardware, where Block (formerly Square) and PayPal have already established themselves as alternatives to traditional terminals.
But Revolut is also making this decision as it tries to build a full-fledged financial services app in multiple countries, and will need a way to stop business customers from looking to other companies for acceptance. physical payments.
“It’s about complementing the offering to professional clients,” said Zil Bareisis, head of Celent’s retail banking practice. “If you’re a business selling to consumers, accepting payments is key, and banks like Revolut don’t want to leave that to acquirers.”
Revolut’s hardware has launched in Ireland and the UK, and Revolut plans to bring the product to all of its global markets, reaching a network of around 500,000 merchants.
The company also plans to add point-of-service functionality that will allow Revolut-enrolled businesses to integrate Revolut Reader into an existing point-of-sale system used by a merchant. The launch marks Revolut’s move to in-person payments, allowing businesses to sell online and in person from a single platform, Thibaut Genevrier, product manager and partner at Revolut, said in an email.
Revolut’s strategy is to counter other fintechs, challenger banks and traditional acquirers by adding payments to Revolut Business services such as currency exchange, global transfers, subscriptions and corporate card management, Genevrier said.
“There will be fewer contracts, fewer accounts, and more need to track money as it moves from one entity to another,” Genevrier said.
Block and PayPal introduced mobile card readers a decade or more ago, and have since built more comprehensive product sets around them. PayPal, which launched its Here reader in 2012, acquired a European mobile point-of-sale hardware company Zettle in 2019, in part to counter Block’s expansion into Europe. PayPal then added technology acquired from Zettle to enhance PayPal’s point-of-sale hardware offering in the United States.
Both PayPal and Block have adopted a “super app” strategy of combining payments with other business functions within a single interface. To block, which has an industrial banking license in the United States, added bank accounts, for example, and spent years building a “two-size” business that offers products for both consumers and merchants. And PayPal executives also pointed out PayPal’s Intent to build a larger financial services business with PayPal and Venmo’s user base as its core audience.
Revolut is counting in part on lower costs to complete, arguing that its Revolut Reader may result in lower fees for some merchants.
“The product will settle funds in accounts within a day and businesses will retain more of them,” Genevrier said, adding that the reader costs around $35 and each payment is priced individually based on the merchant, although it is can be as low as 0.8%. plus about 4 cents per transaction. Square charges 2.6% plus 10 cents for most transactions, for example; and PaypalZettle charges 2.29% plus 9 cents per transaction. Clover charges 2.3% plus 10 cents per transaction for most payments.
Revolut over the past year has added features that allow travel booking and payments through its app in anticipation of the strong rebound in travel that followed the early stages of the pandemic. Revolut also introduced mobile remittances in the US/Mexico corridor to reach new users in North America as part of Revolut’s US expansion. The company is also striving for a US banking license, which would give the company more freedom to pile new products onto its payment rail without the need for a banking partner. Other recent additions include stock trading and the launch of new markets including Sri Lanka, Chile, Ecuador, Azerbaijan and Oman.
Shortly after the launch of Revolut Reader, Revolut also announced a partnership with Stripe to support digital payments across Revolut’s merchant network. The Stripe partnership should also facilitate Revolut’s establishment in Mexico and Brazil by scaling digital merchants.
“Just like for consumers where Revolut is building a great app, they are now bringing more and more tools and services under one roof for business customers,” Bareisis said.
Adding physical point-of-sale payment hardware may not be an obvious solution for Revolut’s mobile payments and digital financial services business, but it helps the company round out its product line. , said Marco Salazar, director of payments for Javelin Strategy and Research, adding support for a wide range of payment options would be compatible with supporting other services such as a marketplace of e-commerce or buy-it-now/pay-later loans.
“That way Revolut will have the digital as well as the physical,” Salazar said.