Revolut has secured banking license from the European Central Bank, which enables the UK-based fintech startup to provide services that are normally offered by traditional banks.
Launched in July 2015, Revolut claims to be a digital banking alternative focused on offering free international money transfers to its customers. The challenger bank also allows its users to spend abroad in more than 150 currencies at the interbank exchange rate, with a 0.5% fee for anything over £5,000 a month.
The fintech startup said that it will begin testing its new European banking license in Lithuania in 2019. Once it is convinced that everything is operating smoothly, the challenger bank will look to foray into other European markets later in the year.
Revolut, in its blog, wrote: “We’ll aim to implement the banking licence as transparently as possible, so that you can track our progress and find the answers to your questions. For now, we would just like to thank each and every person who has backed us in our journey. Make no mistake, the next 18 months will be game-changing!”
The challenger bank said that the European banking license will help it build an account for users where they can handle all aspects of their financial life.
In the next few months, the startup expects to focus on building and testing its technologies, and work closely with the regulators to get any restrictions on the license removed. These, it said will allow it to launch full current accounts, overdrafts and other services that are offered by a conventional bank.
Revolut said that if users opt to open a full current account with it in the future, then any money deposited by them will be protected up to €100,000 under the European Deposit Insurance Scheme (EDIS).
The banking license, once operational, will enable the challenger bank’s users access to personal loans and overdraft facilities.
Revolut said that once it launches full current accounts for its users, it will support its UK Direct Debit service which gives users the scope for paying several types of bills automatically through their banking accounts.
Headquartered in London, Revolut raised $250m in a Series C investment round in April, which put its valuation at $1.7bn. The funding round was led by DST Global with participation from existing investors Index Ventures and Ribbit Capital.