Revolut the app-based banking service and one of the UK’s most well known fintech unicorns has been approved for a European Banking License.
Why a European banking license, not a UK one? Although this hasn’t been stated directly by Revolut, Brexit is undoubtedly forcing London’s financial companies to think about how they can prepare themselves for the fallout.
There are however some more practical reasons that getting the license is a big win for Revolut, such as funds being protected up to €100,000, and the ability for Revolut to offer overdrafts and loans, as well as direct debits – features that should be available from next year.
The license to operate anywhere in Europe was granted to Revolut by The Bank of Lithuania – Lithuania’s national bank.
Lithuania, along with Estonia, has one of the most fintech and innovation friendly regulatory environments in the world.
Although London has a big fintech scene and has traditionally be one of biggest financial centres in the world, it has proven slow to adapt and has started to lag behind other locations.
Revolut was founded in 2015 offering fast and free money transfers and exchanges, but surged to popularity in 2017-18 – proving incredibly popular with crypto traders who needed to move funds and switch currencies.
Prior to getting a European banking license Revolut operated under the UK and EU’s e-money licenses, which meant Revolut were unable to offer some services.
You can check out our review of Revolut and other app-based banking services here.