Why Everyone Loves Revolut, a Neobank Changing The Banking Game

“Revolut is beating the banks at their own game” — The Guardian

Revolut, the London-based fintech startup that offers a card and current account features has recently announced it scaled up to 2 million users. We at Booster Labs use Revolut regularly and understand why its users love it.

When presenting for incumbent banks we are often asked a simple question — how come people love neo-banking proposition such as Revolut when the underlying product is the same as ours?

Most incumbent bankers do not yet grasp the way these new value propositions are build and bundled on top of the commoditized banking services such as payments, current account or card issuing.

In this article, we explore — purely from a user perspective — what is so special and unique about Revolut’s proposition so you understand the hype even without being Revolut user.

Revolut in Numbers

Revolut launched publicly in July 2015 with the aim of building a fair and frictionless platform to manage money around the world by removing hidden fees and offering interbank currency rates. This offering aimed at frequent travelers resonated very well with the frequent traveller persona.

In February 2017 Revolut launched UK-based current accounts, enabling its customers to get a unique IBAN; causing user growth to skyrocket. In November 2017 they reached 1 million; in February 2018 they announced 1,5 million and in June 2018 Revolut reached 2 million total users with 350,000 daily active users.

Until today Revolut managed to raise 336 million USD at the most recent valuation of $1.7 billion. In comparison to other fintechs and neobanks, Revolut managed to achieve financial break-even in December 2017 when firm’s monthly transaction volume reached 1.5 billion USD.

Globally it employees 400 people, with plans to double its headcount by the end of the year.

Revolut has applied for the European banking license in Lithuania and announced its plan to apply for US banking license in California by the end of 2018. Let’s look at this fintech unicorn in depth and explore why users from all around the world love it.

Powerful Free Version with Even Better Paid One

Revolut allows you to open an account online in 60 seconds — all that is needed is a smartphone, European ID. No paper trail whatsoever remains in the process, so it is even more eco-friendly than traditional banks.

You are immediately issued a free UK current account (anyone opening a bank account in the UK knows how miserable this process was until recently) and free Euro IBAN account.

Revolut let’s you send free international money transfers in 25 currencies using the real exchange rate so you save money on every transaction. You can spend abroad fee-free in over 150 currencies with a contactless MasterCard or Visa. According to Revolut, customers can save up to 8% on every card payment when you travel abroad. ATM withdrawals worldwide up to 200 EUR per month are free and Revolut claims to save average customer 46 GBP when travelling abroad.

Revolut's free package

Revolut’s premium paid version offers further perks such as global travel insurance policy, increased free ATM withdrawal limit, free card delivery and 24/7 priority support at a price point comparable to current account packages from traditional banks in continental Europe which deliver a lot less value to their customer

Revolut Helps You Everyday

Revolut is no more just “that card you use only when travelling” as it has been positioned before. Revolut team is adding new features that help their customers with their daily financial lives at a staggering pace every few weeks.

The application offers amazing analytics with merchant, category and country breakdowns. Revolut has recently launched instant spending push notifications and budgeting. It introduced a feature called ‘Vaults’, which rounds up your transactions and sets aside small amounts of money to designed virtual savings accounts.

Have you ever gone out with friends and when the check came you struggled with who pays how and how much? The nightmare is over thanks to Revolut. You can split bills with other Revolut users in seconds or do seamless peer-to-peer payments in just 2 clicks.

Revolut Empowers Customers with Amazing User Experience

As we mentioned Revolut is super easy and convenient to use. The user experience begins with amazing onboarding process that takes just seconds and continues throughout the whole application.

For example, after creating your account you can order a payment card to be delivered directly to your home in few days — pre-activated and in amazing packaging.

Revolut allows you to manage all your physical and virtual (yes you can have just a virtual card) cards they way you always feel it is safe to use them. You can freeze and unfreeze your card by one tap, you can instantly view your PIN and toggle contactless payments, ATM withdrawals and online tractions.

Even at a scale, the experience is personalized — for example every time you come back from vacation you will receive push notification welcoming you home. This is just one example of creating a love brand in financial services.

From Current Account to Insurance Investing. Revolut Has You Covered

Revolut is not just about travelling or making seamless payments anymore. It has expanded its functionalities to new product lines such as travel and device insurance and cryptocurrencies.

You can insure yourself and your travel companion in few clicks.

Revolut tracks your location and activates travel insurance only when you are abroad. You can be insured for 0,99 EUR per day with the price cap of 37,50 EUR per year, which is the maximum amount you pay for the insurance in one year. Again, this is a manifestation of a simple, convenient and transparent proposition seamlessly integrated with the core banking product.

At the end of the day, Revolut is not an insurance company — they partnered up with White Horse Insurance Ireland dac to provide this service Great showcase of fintech and insurance company cooperation and seamless 3rd party services bundling.

Revolut recently announced it is developing its “Wealth” feature which will allow its users to invest in stocks from British and U.S. listed firms as well as exchange-traded funds and options. Essentially, it’s trying to copy Robinhood that had great success in the United States and bring this proposition to their user base by launching a commission-free share trading platform, allowing anyone to invest in listed companies, without paying steep fees.

Showcase of Revolut’s new investing feature
“For many years, people have felt frozen out of trading by high fees and clunky interfaces, so Revolut are aiming to make investments cheap, simple and completely mobile,” Nikolay Storonsky, Revolut’s co-founder and chief executive, told CNBC.

After Revolut obtains its banking license it will be able to protect your money up to 100K EUR, do direct debits, overdrafts and personal loans — in other words, we expect Revolut to keep on deepening its banking product portfolio and perhaps become the first truly worldwide challenger to the traditional banks. You can read more on this topic on their blog.

Revolut Is There to Help Your Business

Revolut for business is currently being used by 20 000 businesses. It caters to international businesses that need to do multi-currency transfers often as the offering enables operating with up to 25 currencies using real inter-bank exchange rate. Moreover, you can give prepaid cards to your teammates and employees and manage them from one place, which is a huge issue for many business owners. You can track your whole team’s business expenses instantly, set spending limits for each employee and easily block cards if they are lost.

Moreover, you can sync transactions into your favorite accounting platform. In this way, Revolut has started competing in the SME space with companies such Pleo and it might as well be successful given its growing scale. Just for your information, the freelance account costs 7,99 EUR / month and for a small business it is approximately 28 EUR / month.

In June 2018, Revolut announced cooperation with French cab firm SnapCar. It will allow drivers to receive money instantly after they provided the ride instead of waiting sometimes a whole week to receive them. The instant payment technology is facilitated by Revolut’s Open API, a recently-launched feature of its business accounts which is available to all users. With Open API proactive approach (by the way which is completely different from most incumbent banks, that tend to be more reactive) we can only assume their partnership base will grow rapidly.

When Will We Get the Same Service from Our Banks?

Applications such as Instagram, Uber, Netflix provide us with an outstanding experience that we are no longer willing to settle for something worse — and that applies for financial services too.

Unfortunately many incumbent banks still do not understand this and even though on paper they provide the ‘same product’ as their challenger counterparts, the customer experience in consuming the product is radically different from that of the successful neo-banking propositions.

In many cases the C-level bankers are not even aware of this new wave of competition, let alone have any hands-on experience in using them.

We in Booster Labs are trying to fill this gap — we carried out an in-depth research on neobanks containing screens, features commonalities/differentiators and business model overviews of the most important emerging neobanks in Europe such as Revolut, N26, Monzo, Monese, Starling and Atom Bank.

If you would like to learn more, you can reach us at lucia@theboosterlabs.com.

In-depth research on neobanks