Revolut Pursues U.S. National Bank Charter to Expand Operations

Revolut, Europe's most valuable start-up with a valuation of $75 billion, has applied for a U.S. national bank charter, marking a significant step in its ambition to expand its operations in the United States. Currently, the banking app collaborates with existing lenders like Lead Bank to provide services in the U.S., but obtaining its own banking license would enable it to accept insured customer deposits and offer lending products, including credit cards.

New York Times

The U.S. market is crucial for Revolut's global strategy. The company aims to enter over 30 new markets by the end of the decade and increase its customer base from 70 million to 100 million by mid-2027. Sid Jajodia, Revolut's chief banking officer, emphasized the importance of being directly regulated in the U.S. to facilitate these ambitions. The charter would also grant access to essential payment systems such as Fedwire and A.C.H.

New York Times

Despite its ambitions, Revolut faces challenges in securing a full-fledged banking license in its home country, the United Kingdom. British banking authorities approved its application in 2024, but the company remains in a "mobilization" phase, limiting total deposits to £50,000 (approximately $66,744). Concerns from regulators reportedly focus on Revolut's global financial controls, leaving the timeline for exiting this phase uncertain.

New York Times

Revolut has allocated $500 million to support its U.S. expansion, which includes capitalizing its bank. Jajodia noted that while the company considered acquiring an existing lender for a national charter, applying for a new license was deemed the most sensible approach, allowing for a fresh start without the complexities of integrating another business's systems.

New York Times

While Revolut's expansion plans are ambitious, some critics express concerns regarding the company's regulatory compliance and financial controls. The ongoing mobilization phase in the UK raises questions about its readiness to operate as a fully licensed bank, potentially impacting its credibility as it seeks to enter the U.S. banking landscape.

New York Times

The approval process for Revolut's U.S. banking charter involves major U.S. banking regulators, including the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the Federal Reserve. The outcome of this application will be pivotal for Revolut's future operations in the United States and its broader global strategy.

New York Times

• “For our long-term ambitions, the best thing for us is to be directly regulated,” — Sid Jajodia, Chief Banking Officer, Revolut

New York Times

• “It has already set aside $500 million to expand in the United States, some of which will help capitalize its bank.” — Sid Jajodia, Chief Banking Officer, Revolut

New York Times