Revolut Review - Everything You Need to Know
Revolut is an example of the 'neobank' which have flooded the market in the last few years, as this review will explain.
Offering more than traditional banking services, neobanks such as Revolut allow users access to a wide range of other financial services, including several foreign currencies, trading facilities, cryptocurrencies, and debit cards.
Due to Revolut's inability to secure a UK banking licence, it offers 'interest-bearing vaults' rather than traditional deposit accounts.
Revolut review introduction
Technology is the constant which drives human development across the planet. None more so than in the realm of personal finance. The last five years have seen an entirely new approach to banking with the introduction of mobile financial applications, which offer more than pure banking services. One of the biggest success stories in the past five years is the banking app Revolut.
Revolut is a British-based digital banking and financial technology company that provides various services, including debit cards, foreign exchange, and peer-to-peer payments.
As well as a desktop-based website, the company's services are accessed through a mobile app and are available in various countries worldwide. The core goal of Revolut is to make banking more accessible, more affordable, and convenient for its customers.
Revolut review background
With headquarters in London, the company was founded in 2015 by Russian native Nikola Storonksy and Ukrainian Vladimir Yatsenko and originates from Level39, a financial technology incubator based in the City.
In a little under three years, the company had raised $250 million from a series C funding round which gave the company a subsequent $1.7 billion post-funding valuation.
As of 2021, due to a successful $800 million funding round, the company is valued at $33 billion, has 15 million users worldwide, and generates a revenue of $261 million. These impressive statistics make Revolut one of the most valuable tech start-ups today. However, despite this valuation and record turnover, the company recorded a $167 million loss in 2021.
According to the company website, some 1.1 million customers use Revolut daily, generating some £65 billion in transactions since 2020. According to recent statistics on the company website, Revolut is available in 37 countries worldwide.
The team behind Revolut features some heavy hitters from the world of international finance. In August 2019, the company announced a series of hires, including former Goldman Sachs executive director Wolfgang Bardorf, ex-Visa fraud prevention manager Philip Doyle, and former corporate finance manager Stefan Wille. Shortly afterward, the company announced a deal with Visa that expanded the operation into 24 new territories resulting in the hiring of 3,500 extra staff.
Despite some impressive statistics Revolut does not actually hold a UK banking licence despite applying in January 2021. Regardless, the company continues to expand and has recently begun operations in Japan and the US, increasing its staff from 1,500 to 5,000.
As mentioned above, despite holding a challenger banking licence from the European Union, Revolut does not hold UK banking status. This limits the scope and security of its operations. In particular, this means that any deposits made with the app are not covered by the Deposit Protection Scheme. Therefore, Revolut uses third-party banking services such as Barclays and Lloyds to store customer deposits to their platform. This also means that Revolut cannot reimburse any customers who fall victim to authorized push payment fraud.
Revolut review: Services
As of January 2023, services listed on the Revolut website include debit cards, virtual cards, Apple Pay interest-bearing vaults, foreign exchange, commission-free stock, and crypto and commodity trading.
The popular mobile application supports spending and ATM withdrawals in 120 currencies, with direct transfers available in 29 currencies directly from the app. Any payments made at the weekend incur extra fees of between 0.5% and 2% to protect customers from exchange rate fluctuations.
In 2022, Revolut launched its stock trading app modelled on popular competitor Robinhood, which allows users to trade various stocks, commodities, currencies, and crypto.
Due to the rise in popularity of crypto, Revolut allows its users to trade some of the largest cryptocurrencies, including Bitcoin, Ethereum, Litecoin, Bitcoin Cash, and XRP. However, unlike professional trading platforms such as Binance, cryptocurrency cannot be deposited or spent from Revolut, but only converted back to fiat inside the mobile application.
This is because Revolut uses the Metropolitan Bank of New York, which has a zero crypto policy.
Alongside access to crypto and commodities, Revolut provides an equities trading facility that gives access to a wide range of US stocks and fractional share purchases/sales. However, like crypto, any stocks purchased on the platform cannot be transferred to another broker but must instead be sold or converted back to cash which can then be withdrawn.
Revolut offers two premium tiers on top of the free-to-use basic service. These are Premium and Metal.
• Premium offers users unlimited foreign exchange, 'double free' ATM withdrawals abroad, and free travel insurance.
• Metal provides all Premium features plus 1% on any currency (including crypto), 'quadruple free' ATM withdrawals abroad, cashback opportunities, and various discounts.
The company also recently launched its 'Junior Account', aimed at 7 to 17-year-olds, to teach younger people how to budget and take responsibility for their finances.
According to company statistics, the average user monthly deposit to the platform is £305, below nearest competitors Monzo and Starling. Monzo remains the UK's largest neobank with 4.7 million users; however, with 4.2 million, Revolut is head and shoulders clear of its nearest rival, Starling, which has 2.7m UK customers. 60% of Revolut's customers are male with an average age of 34 years, two years older than Monzo yet one year younger than Starling Bank.
Revolut review: Fees
As with any banking application, consideration of the fee structure is very important. Revolut has made sure their fees are competitive.
Opening an account with Revolut is free. There is no monthly cost to use and maintain your account, albeit on a basic level. The application makes its profit from what are relatively high fees in a variety of other ways.
Users who wish to apply for a Revolut debit card must pay £4.99. Premium plan users can get their hands on a card without charge.
Customers who wish to withdraw money via an ATM do not have to pay any charges up to £200 per month. After this amount, there is a charge of 2%.
When transferring cash between bank accounts, customers can do this via traditional banking wire methods. The company does not charge for this service. However, those users who wish to transfer money via the SWIFT network will incur a charge.
Additionally, Revolut does not charge a fee for customers looking to top up their accounts using a different bank card. Revolut users who wish to trade or exchange currencies do not incur charges for amounts up to £1,000 on weekdays, but will be charged 0.5% above this amount. Currency prices are based on competitive exchange rates sourced from third-party providers. At weekends, exchange rates are fixed and prices include a mark-up for both users of the free as well as the paid-for plans.
As with close competitors Monzo and Starling, Revolut earns most of its revenue from a process known as interchange, where it takes an additional 0.2% of every transaction fee.
Despite the perceived success of Revolut, a handful of controversies have dogged the brand in recent years.
Any account suspected of suspicious activity is automatically frozen by algorithmically driven trading bots. While any account suspension is designed to be temporary until human review, there have been a number of cases where customer accounts have been frozen for a considerable amount of time, leading to inaccessible balances.
The company said this was due to a lack of compliance agents. The scandal deepened further when affected parties understood that despite no longer having access to their accounts, Revolut did and, therefore, could continue to expose any balances to wholesale money markets, earning interest. Furthermore, any customers with suspended accounts were blocked from accessing customer support channels, instead receiving an automated response from pre-programmed chatbots. To date, some 500 customers have been locked out of their accounts with little or no response from the Revolut customer support team.
A March 2019 investigation by the journalistic platform Wired expressed concern over Revolut's employment practices and workplace culture. The report found that along with high staff turnover, employees were often expected to work for free and ordered to work weekends to meet company targets. The following year, Wired conducted another investigation that uncovered further underhand practices concerning redundancies in the wake of the COVID-19 pandemic. Employees who were not immediately terminated were expected to accept a 'salary sacrifice scheme' to keep their jobs.
Due in part to Revolut’s inability to obtain a UK banking licence, the company is not aligned to the Contingency Reimbursement Model Scheme and, so, has refused to reimburse any victims of Authorised Push Payment Fraud in the UK.
Pros and cons
There are several benefits to opening an account with Revolut. However, these are balanced with a series of drawbacks.
• A modern and diverse range of banking features, including cryptocurrency options.
• Flexibility in regards to account top up.
• Worthwhile perks for Premium and Metal account holders.
• No UK banking licence means no current accounts and no deposit guarantees or standing orders.
• Very poor customer support.
• Accounts can be frozen without any warning.
Revolut review conclusion
Compared to other UK challenger or neobanks, Revolut can be considered to have a more European-centric focus.
Operating in every EU jurisdiction, Revolut is also present in other countries which have established trade relations with the European block, including Australia, Canada, Japan, and the US.
Due to the controversy surrounding Revolut's decision to disable sanctioned transactions, Revolut still does not hold a UK banking licence despite applying twice, the latest time in 2021. It circumnavigates this problem by running its banking operation via Lithuania, which approved its European banking licence in 2018.
Founder Nikolay Storonksy has grand ambitions for Revolut, aiming to become a financial 'super app' modelling itself along the lines of China's WeChat and Alipay, which have revolutionised banking in mainland China. Whether he gets to realise this ambition is yet to be seen.
Despite some bad press and stalling of business operations, Revolut remains the second most popular neo-banking app in the UK market today.  The leadership team of both Nikolay Storonksy and Vladimir Yatsenko are strong supporters of the movement opposed to Russia's invasion of Ukraine, with the company donating £1.5 million to the Red Cross Ukraine appeal. This may go some way to improving a somewhat tarnished reputation.
Author: Brendan Beeken
Moni Talks Founder and Chairman Brendan Beeken is an entrepreneur, commercial strategist, investor, and philanthropist. He writes on a wide range of subjects, including cryptocurrency, decentralised finance, blockchain, business advice, and professional wellbeing, for news and business websites, as well as Latest Moni and his personal site, brendanbeeken.com. Brendan draws from his own research and more than two decades of personal experience in business to offer a unique insight, perspective, and commentary on diverse subjects. He is passionate about making the cryptocurrency space more accessible and encouraging safer and more responsible trading and investing. Brendan's LinkTree is https://linktr.ee/brendanbeeken.