? Revolut, a $33 billion global financial technology player, will soon offer commission-free stock trading to U.S. customers for the first time, CNBC writes.
? According to Nick Storonsky, founder and CEO of the fintech startup, the long-awaited announcement will be made Tuesday that the firm has obtained a broker-dealer license in the United States, allowing it to compete with such established startups as Robinhood (NASDAQ:HOOD) and Square (NYSE:SQ).
? But such services the firm will only be able to provide in a few months and will eventually allow for partial stock purchases and investing small change c card transactions.
? Going forward, Storonsky hinted that Revolut will seek an IPO in the U.K., U.S. or possibly a dual listing. According to Storonsky, after raising $800 million in July, Revolut should stop raising money from private investors/
? “I hope so, because we are actually generating free cash flow. We don’t need additional capital from outside investors,” he said.
? Founded in London in 2015, startup Revolut has grown into one of Europe’s dominant consumer financial technology companies, and since then it has been constantly adding more features.
? Initially its app was designed on how to avoid currency exchange fees while traveling, but it quickly added dozens of new products in the banking, trading and cryptocurrency fields. It now has more than 16 million customers.
? Through this approach, the company managed to get a huge valuation from investors this July, including Softbank (T:9984) and Tiger Global, who see English Revolut as a contender to create the first global financial super app. To achieve this goal, it’s “just a matter of small things” to enter the public market in the US, where competitors ranging from Robinhood to Chime have already taken their places in the fintech services ecosystem.
? “We’re building a single app where people can manage all aspects of their finances, from banking and currency exchange to cryptocurrency and stock trading, and we aim to break down common barriers to starting stock trading, such as minimum funds in an account and complicated interfaces,” Storonsky said.
? The app itself has already been operating in the U.S. since last year: Revolut was launched just as the pandemic began, and has since offered customers services like high interest savings, small business banking, money transfers from the U.S. to Mexico, and cryptocurrency trading.
? But retail stock trading could become an even more attractive and lucrative business. Meanwhile, other players have stepped up in this area and are looking to get involved: PayPal (NASDAQ:PYPL) is also working on its own stock trading platform.
? For now, Revolut is only testing its stock trading service, which will allow users to buy ETFs and stocks of companies listed on the NYSE and NASDAQ. It took 16 months to obtain a broker-dealer license from the FSA, and now Revolut is an “introducing broker” and will rely on New Jersey-based fintech company DriveWealth to settle trades, just as it does with its European trading business.
? Revolut’s revenue in the U.S. will come from paying for order flow: This tactic is one of Robinhood’s main ways to generate revenue, but it is under scrutiny from Securities and Exchange Commission (SEC) Chairman Gary Gensler.