back to article Revolut-won: British banking app gets half a billion bucks in backing, seeks to subvert today's market incumbents

Revolut, the British-based mobile banking app, has raised $500m (£385m) in fourth-round funding which gives it a theoretical value of $5.5bn (£4.3bn). The money will go on further developing its software and rolling out banking across Europe. Revolut is one of several firms like Monzo and Starling muscling in to get a chunk of …

  1. Warm Braw Silver badge

    The startup got a European banking licence in late 2018

    It appears to have been rather quiet about it since and has allegedly withdrawn a licence application in Luxembourg.

    Not that a European licence may be of much use in he UK in a year's time, if N26 is any guide

    Revolut's web footer says in small print:

    Revolut Ltd (No. 08804411) is authorised by the Financial Conduct Authority under the Electronic Money Regulations 2011.

    The word "bank" is also notably absent from their publicity material. It's not so much a mobile banking app as a means of managing your fractional interest in an account in Revolut's name at a real bank. That may change over time, but it doesn't seem like it has yet.

    1. Anonymous Coward
      Anonymous Coward

      Re: The startup got a European banking licence in late 2018

      I can tell you one thing: they'll have a major problem in the Netherlands where people are legally permitted to choose any of their first name to be used as their calling name (provided they stick to it afterwards).

      I am in that situation: my parents saw fit to lumber me with 4 first names, and then used the LAST one as calling name because the first one was, well, old fashioned (as it was my Granddad's).

      Apparently nobody had the foresight to code or legislate for that in any other EU nation, but in the UK I was at least able to bully my GP into using the correct name by asking to sign a form accepting the risk of being misidentified in case of an emergency - they caved quickly. Not Revolut - despite having issued cards in the correct name they renamed the account once they looked at my passport.

      Well, at least I still have cards with the correct name, I'll keep using them until someone else offers me banking with midpoint exchange rates as that alone saves me a fortune compared to other banks..

      1. Anonymous Coward
        Anonymous Coward

        Re: The startup got a European banking licence in late 2018

        Is that you David?

        1. Anonymous Coward
          Anonymous Coward

          Re: The startup got a European banking licence in late 2018

          My grandad's first name was also Anonymous; I don't mind people calling me that, however.

          1. Anonymous Coward
            Anonymous Coward

            Re: The startup got a European banking licence in late 2018

            I generally go by "Anonymous" unless I'm in Starbucks

      2. Kubla Cant Silver badge

        Re: The startup got a European banking licence in late 2018

        the Netherlands where people are legally permitted to choose any of their first name to be used as their calling name (provided they stick to it afterwards)

        I only have two given names, but I'm called by the second of them. As far as I know, the UK doesn't apply any legal constraint on which of them I use.

        1. Anonymous Coward
          Anonymous Coward

          Re: The startup got a European banking licence in late 2018

          Try getting any official papers listing only the second one. The only way you'll get that if both are used in full - and in that order.

      3. gnasher729 Silver badge

        Re: The startup got a European banking licence in late 2018

        "Apparently nobody had the foresight to code or legislate for that in any other EU nation, but in the UK I was at least able to bully my GP into using the correct name by asking to sign a form accepting the risk of being misidentified in case of an emergency - they caved quickly. "

        I'm not Dutch, but the name in my passport isn't my legal name either. HMRC was fine with it, Barclays Bank is fine with it, everyone is fine with it. Only thing with my passport name is my driving license, and booking flights is a pain.

      4. DrXym Silver badge

        Re: The startup got a European banking licence in late 2018

        Bobby Drop Tables

  2. Gordon 10 Silver badge
    WTF?

    So what status does a European banking license have in this country. And does that license cover the UK legal entity.

    TL:DR if Revolut goes TITSUP or just makes an error - what happens to my cash?

    1. DML71

      Yep. I'm wary of anything with not covered by the Financial Services Compensation scheme. I was nearly burnt by Icesave's collapse years bank so am a bit more careful now.

      I use Revolut regularly but only top it up the card as and when I need it. I certainly wouldn't consider paying in a salary or using it to transfer large sums.

      While I'm sure their structure and ring fencing of funds mean it's unlikely anything bad would happen, to me its not worth the risk. Once they have a full bank licence and have coverage from the FSCS I might change my mind. Tell then I treat it as a prepaid payment card that offers good exchange rates and the ability to access money overseas easily.

      1. Robert Grant Silver badge

        Agree. It's brilliant as a card for spending overseas, but I'm not ready to make it a primary account.

        1. Charlie Clark Silver badge

          I think of it as kind of electronic traveller's cheque: really useful but should not be considered indispensable. There's a lot of thought gone into the app, especially the granular security settings, but there should be more to a bank than that.

          There's an increasing push here in Germany to go digital but the implementations I've seen are universally shit™, so I'm sticking with paper where I can until some of these people Get a Clue™

      2. Anonymous Coward
        Anonymous Coward

        Ditto. I keep my current account in a "proper" bank (which also allows me to pay in cash) and only top up Revolut as and when.

        We're using it for business as well, but I'm not sure that will continue as we go international. The exchange fees are interesting, but they started adding more banking charges. Understandable, but also an argument to then look for alternatives again - that battle is long from over so there will be new entrants and we can switch quite quickly.

      3. Charlie Clark Silver badge

        You're never safe from something like Icesave when the government invoked anti-terrorist legislation to avoid having to bail people out. And seeing as the new government doesn't seem to like the idea of judicial review I suspect we can expect more capricious decisions.

        1. cantankerous swineherd Silver badge

          iirc Iceland refused to honour the committments they'd given re. compensation and ukgov got shirty about it.

          has to be said that the commitments were given by a bunch of shysters and reneged on by a govt of another stripe refusing to sacrifice it's population to bail a bank out. look at Greece for a counterexample.

    2. Charlie Clark Silver badge

      I think your question would be better addressed to the Department of Trade or whichever part of Clown Castle is currently handling negotiations with the EU…

    3. cantankerous swineherd Silver badge

      electronic money disappears into the ether, unlike funds in a proper bank account which you get compensation for.

  3. DavCrav Silver badge

    "Revolut, the British-based mobile banking app"

    I think you misspelled 'Lithuanian'. That's where the banking licence is from, that's who you have to deal with should everything go sideways.

  4. JohnSmith7263

    I was with them from the start, and it was amazing except for the catastrophes

    I joined Revolut very early on - for me, where I move around a lot, it was a gift from the Gods; multiple currencies, one card, no fees, market rate. I was one of the 5000 people who had the chance to buy stock, early on.

    It was all okay until the catastrophe - the app, without warning, required Android 5, and I had Android 4.4. Out of the blue, my account stopped working. This was about two years ago.

    I still have about 1000 GBP in the account. Revolut say the only thing they will do is return the payments to the people who made them. They will not transfer it to another account.

    Before this happened, though, I started work as a contractor and took out a business account. I used this very very happily - it's all web-based, so no problems with apps - and covered myself completely against Brexist by moving everything into CHF.

    Everything was great until the catastrophe.

    Out of the blue, without warning, Revolut introduced an app, and the app is required to make card payments on-line. So I was no longer able to use the account on-line.

    Fortunately, I could still make transfers via the web-site. I've emptied the account (actually also terminated the company) and I'm about to close it.

    Revolut IME are fantastic, except that they have no culture of ensuring all accounts work at all time.

    That approach might be okay for, say, a food ordering app, but when it's your *banking* app, and your *money is in there*, and your business might depend on it, well, it means you can't rely on Revolut. By all means use it, but for the love of God, make sure you can function completely without it, and with it disappearing instantly, without warning.

    (I tried to get the apps running on an Android VM on my laptop. I think Revolut do not publish for x86/x64, only for ARM - they used to do x86/x64, but stopped a long time ago. However, I'm not quite sure about this - it might be I cannot see the apps because they are restricted to the EU. My virtual machine has no location set. To set a location, you have to provide a bank account - yes, really. I'm not going to give my bank account info to Google, so I can't set location, so if the problem is that the app is restricted to the EU, I can't fix it. N26 and Transferwise do not have this problem; they won't run on my phone either, but it's no problem, I run in them in the VM. I think though in fact they just don't publish for x86/x64. You can download the APK on the net, directly, but you can only find ARM except for very very old releases.)

    1. Anonymous Coward
      Anonymous Coward

      Re: I was with them from the start, and it was amazing except for the catastrophes

      To be fair, Android 4.4 had more holes in it than a tory manifesto, so they were doing you a favour

      1. DavCrav Silver badge

        Re: I was with them from the start, and it was amazing except for the catastrophes

        "so they were doing you a favour"

        Lucky they aren't so altruistic then. If they did him many more favours, he'd be bankrupt.

      2. NeilPost Bronze badge

        Re: I was with them from the start, and it was amazing except for the catastrophes

        ... and your phone must be well old.

        Android 4.4 KitKat is 2013 vintage.

  5. ratfox Silver badge

    Good

    Online payments are ridiculously more complicated and/or expensive that they need to be. I'm not saying Revolut is going to be the one platform to rule them all, (and there doesn't need to be only one,) but there is a serious need to break the hold of companies like Visa and western Union on payments.

    1. Korev Silver badge

      Re: Good

      Yeah, here in Switzerland the banks are backing a mobile app called Twint which uses some frankenhybrid of NFC & bluetooth for payments in shops etc. The problem is that it's rather unreliable when you pay so most people seem to prefer the convenience of the contactless payments instead. The largest bank here, UBS refuse to support Applepay in the hope that people will use Twint instead - we'll see who wins in the long run.

  6. Anonymous Coward
    Anonymous Coward

    The money will go on further developing its software

    More app updates tomorrow for the next year with new features offering convenience, ease of use, and the ability to post on social media. There might be a few bugs but they will be fixed time and time again. Security? That's in the next round of funding.

    1. Anonymous Coward
      Anonymous Coward

      Re: The money will go on further developing its software

      Backward comparability for people who don't replace their phones every 6 months?

      You're 'avin a larf mate!

      1. JetSetJim Silver badge

        Re: The money will go on further developing its software

        My S7 is 4 years old, still supports the Revolut app despite now only getting security patches and being on Android 8.0

        Not surprised that compatibility with ancient devices is shite, though, maintaining a fractured codebase for this must be a right PITA. Communications and options for leaving the app should be improved in these cases, it would seem.

        As with others here, I'm not using it as a proper bank account - just a decent international pre-payment card that I can also give to the kids to use when desired

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