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How Does Revolut Make Money? The Revolut Business Model In A Nutshell

Revolut an English fintech company offering banking and investment services to consumers. Founded in 2015 by Nikolay Storonsky and Vlad Yatsenko, the company initially produced a low-rate travel card. Storonsky in particular was an avid traveler who became tired of spending hundreds of pounds on currency exchange and foreign transaction fees. The Revolut app and core banking account are free to use. Instead, money is made through a combination of subscription fees, transaction fees, perks, and ancillary services.

Origin Story

Revolut an English fintech company offering banking and investment services to consumers.

Founded in 2015 by Nikolay Storonsky and Vlad Yatsenko, the company initially produced a low-rate travel card. Storonsky in particular was an avid traveler who became tired of spending hundreds of pounds on currency exchange and foreign transaction fees.

Both Storonsky and Yatsenko had lofty ambitions for Revolut from the beginning. They wanted to create a global financial super app for younger customers who preferred to access financial services through their smartphones.

After registering 100,000 users in 2016, Revolut secured Series A funding and quickly expanded its product offering to include crypto trading and a donation service. Two years later, the company raised a further $250 million to be valued at $1.7 billion and was able to attain a specialized banking license in Europe.

Revolut revenue generation

The Revolut app and core banking account are free to use. Instead, money is made through a combination of subscription fees, transaction fees, perks, and ancillary services.

Subscription plans

Firstly, there are three paid plans which give extra functionality to the core banking account:

  1. Plus (£2.99/month) – offering a free UK and Euro IBAN account with a customizable card.
  2. Premium (£6.99/month) – offering all Plus features in addition to exclusive card designs, 24/7 priority support, and access to so-called Junior features that help kids manage their money.
  3. Metal (£12.99/month) – offering all Premium features plus cashback on card payments and three free international payments per month. Note that Premium users are also sent a 100% contactless debit card made from reinforced stainless steel.

Rewards

The Revolut Rewards scheme allows users to enjoy personalized cashback offers and discounts on eligible purchases.

Rewards bonuses are credited directly to user accounts and encompass purchases made from entertainment, travel, restaurant, grocery, and retail businesses.

In all likelihood, Revolut receives a commission from each merchant and then gives a portion of the fee to its users in the form of a bonus.

Insurance

The company also has two insurance options:

  1. Device insurance – global coverage is offered for £1 per week and covers all accidental damage.
  2. Travel medical insurance – here, Revolut uses geolocation technology to only charge consumers for days they are actually overseas. Medical and dental coverage starts from as little as £1 per day.

Trading

The Revolut trading platform allows users to trade stocks, commodities, and cryptocurrencies such as Bitcoin, Ether, and Stellar. Users can get started for as little as £1 by purchasing fractional shares.

Plus and Premium subscription members get access to a certain amount of free monthly trades. Each additional trade is charged at a flat fee.

Loans

Users can also take out a personal loan for amounts between £500 and £25,000 with a payback period of 1 to 5 years.

The company makes money by charging interest on the loan and, where applicable, overdraft fees for late payments.

Key takeaways:

  • Revolut is an English fintech company offering banking and investment services. It was created after co-founder Nikolay Storonsky became dismayed at exorbitant foreign exchange and transaction fees while traveling abroad.
  • Revolut offers three paid plans which give extra functionality to their free bank account. The company also earns a commission through its cashback and rewards scheme.
  • Revolut has also established itself as an insurance and personal loan provider. Additionally, users can invest in stocks, commodities, and cryptocurrencies in fractional amounts.

Read Also: How Does Robinhood Make MoneyHow Does Betterment Make MoneyHow Does Acorns Make MoneyHow Does SoFi Make MoneyHow Does Coinbase Make Money, How Does E-Trade Make MoneyHow Does eToro Make Money, Fintech Companies And Their Business Models, How Does PayPal Make Money, How Does Venmo Make Money, How Does Honey Make Money.

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Published by

Gennaro Cuofano

Gennaro is the creator of FourWeekMBA which reached over a million business students, executives, and aspiring entrepreneurs in 2020 alone | He is also Head of Business Development for a high-tech startup, which he helped grow at double-digit rate | Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy | Visit The FourWeekMBA BizSchool | Or Get The FourWeekMBA Flagship Book "100+ Business Models"