Revolut holds a banking license, do you trust or not?

[boomy]

I know that Revolut holds a banking license in the UK

Revolut Applies for U.K. Banking License

Revolut Ltd., one of Europe’s largest startups, has asked U.K. regulators for a full banking license to fuel expansion beyond its fintech roots.

www.bloomberg.com

But I also know what people say about all the new rich Russians that own banks and financing corps worldwide to launder their money and make their other activities legit.

What's your thoughts about Revolut and would you use them to place large sums above 100K euro with them?

 

[Sols]

Revolut does not have a UK banking license. The article you linked even says so right in the headline: "Revolut Applies for U.K. Banking License" It can take years for a bank license application to be approved, although it'll probably be faster in this case since Revolut is already known to the regulator.

They have a bank license in Lithuania, but AFAIK, they haven't started shifting customers over to it yet. Right now, everyone is still a customer of their EMI licensed companies.

In terms of trust, I'd focus more on the financial results and over all risk profile than what type of license an institution has. EMIs are safer on paper but bank can be more profitable by offering credit and investment products that EMIs can't/don't.

 

[Silvio]

Trust is not an absolute, there are levels of trust.

High trust = banks that are expensive, solid, in solid countries. Use them for storing wealth, investments. Think of Swiss\Liechtenstein banks that existed for decades.
Low trust = banks that are not solid but are cheap and good for transactions (revolut, other EMIs, shitty banks in weird countries). Maybe keep some money but not more than the deposit guarantee in that country (maybe much less).
Zero trust = banks in Belize, etc. Expensive and not trustworthy, use only at last resort if your structure is so shady that nobody else will touch you. Use only for transactional banking and move funds away as fast as you can.

Honestly I wouldn't keep more than a few K in revolut. Why would you keep 100k there? Can't you find a better bank?

 

[LoveMyLife]

Revolut has little bit more than 7 mil. customers.
They are in loss more than 40 mil Eur in last 3 years in total. All this fintechs are amlost unable to produce profit.
Average balance per customer is just 250 Eur.
Brexit has huge impact on theit business.

Final result: If you have no other way and if you do not plan to hold any reasonable amount with them, then you can have SMB account there. Having any higher amount there is too risky.

 

[karishi]

Revolut has little bit more than 7 mil. customers.
They are in loss more than 40 mil Eur in last 3 years in total. All this fintechs are amlost unable to produce profit.
Average balance per customer is just 250 Eur.
Brexit has huge impact on theit business.

Final result: If you have no other way and if you do not plan to hold any reasonable amount with them, then you can have SMB account there. Having any higher amount there is too risky.

Transferwise has lots of profits $5 billion fintech firm TransferWise posts fourth straight year of profitability
My company account is on Transferwise and they look solid to me.
Good products with good product teams will survive

 

[uranio]

Last Month Revolut closed 3 my accounts and hold my funds for 1 month and half, i had to contact the financial institutions for release my funds.All of this after 2 years of business with them.

 

[LoveMyLife]

Last Month Revolut closed 3 my accounts and hold my funds for 1 month and half, i had to contact the financial institutions for release my funds.All of this after 2 years of business with them.

Everyone who hold money with a Fintech, which has too low own capital, and is burning money every year by having anormous loss, is risking its own money. Sooner or later will be money of all clients in risk of beeing frozen.

There are just a few fin techs and banks which are safe. From Fintech, the best is Transferwise. They are producing profit for many years. Their profit is 0,6 bil Eur in last 3 years.

 

[Sols]

Everyone who hold money with a Fintech, which has too low own capital, and is burning money every year by having anormous loss, is risking its own money. Sooner or later will be money of all clients in risk of beeing frozen.

There are just a few fin techs and banks which are safe. From Fintech, the best is Transferwise. They are producing profit for many years. Their profit is 0,6 bil Eur in last 3 years.

Do you just wake up in the morning and decide to start throwing around wild guesses and unsubstantiated claims?

TransferWise is profitable, yes, but not to the tune of 600 million EUR, neither per year nor for the last three years combined. Their profits before tax were 10 million GBP in 2019 and 20 million in 2020. This is publicly available information.

 

[LoveMyLife]

Do you just wake up in the morning and decide to start throwing around wild guesses and unsubstantiated claims?

TransferWise is profitable, yes, but not to the tune of 600 million EUR, neither per year nor for the last three years combined. Their profits before tax were 10 million GBP in 2019 and 20 million in 2020. This is publicly available information.

Please, understand difference between profit and taxable profit. This is a total difference. Profit is what you earn, Taxable profit is profit, which is used as a base for corporate tax calculation. Whereas Transferwise does not tax all its profit in the UK, profit is split between more countries.

Based on FINANCIAL ACCOUNTS - BALANCE SHEET and PROFIT AND LOSS ACCOUNTS and ANNUAL REPORT for all the company - just in year 2019 their profit is 179 mil GBP what is more than 200 mil Eur. You have to read their global one. Not one filed for UK HMRC.

It looks, you believe, that taxable profit for UK is their global profit. IT IS NOT. Read their financial statements carefully. And understand difference between profit and taxable profit. Based on their business model, they has to tax their profit in more countries.

 

[Edge]

Never used Revolut, but once a TW transfer to Revolut was rejected for me ... One time I was depositing money to etoro via wire transfer, they sent a note specifcally saying "We do not accept transfers from Revolut" .. Same happened to me with a custodian in new zealand, who do not accept money from Revolut ..

Long story short, these companies know something we don't, so I'm not going near Revolut anytime soon

 

[Sols]

@LoveMyLife You are confusing revenue with profits. They had 179 million GBP in revenue in 2019, out of which about 10 million GBP is profits.


This is a quote from their 2019 annual report (Revealing our 2019 annual report):

This financial year is the third in which TransferWise has posted a profit, with a 53% growth in annual revenue to £179 million.

Here's a link that might be helpful: Understanding the Difference Between Revenue and Profit

 

[Kraze]

Contrary to what’s been said so far in this thread, I’ve had better experiences so far with revolut than transferwise.... not sure why, maybe just luck. But ofc for long term id never store more than 100k with them for sure, seeing as I’ve gone through a frozen account story with transferwise already, wouldn’t want a repetition of that again.

 

[bizniz]

I agree it would be smarter to look at the use case rather than the license.

I have been using Revolut for some years, the app is great, they have some really neat multi-currency features and disposable virtual cards and things like that. A few years ago they were a bit annoying on KYC but then they famously switched off their AML software (it's in the press, you can Google it) and since then it has worked like a treat for me. It is by far my favorite card to use for small purchases when I travel.

So, Revolut has 7 million account holders (according to the info above... I haven' t checked it but it sounds realistic). They are not just going to get closed down or disappear. They are already at the "too big to fail" end of EMIs so regulators in UK and Lithuania will protect them. Whether they make money I don' t care... it's not my problem. I am pretty sure they lose money on me as I make quite a few free ATM withdrawals, have them DHL cards to me in exotic jurisdictions a few times a year, and I think I pay about EUR 80 per year fixed fee for all that. They have a business model something like Uber where they are just kept going by investors.

Would I put 100K with them for long term storage? No. Not because I am scared of them being Russians or because of their type of license, but because if you actually get any problem, it would probably be impossible to resolve. They do not have any phone service, and their live chat is basically useless. Plus, Revolut would not like if I put 100K with them. It is not their business model and it would cost them money in negative interest charges.

Would I put 1 million with them on a business account to do day-to-day or short term transactions? Absolutely yes.

As for Transferwise, they closed me down, so yes my experience with Revolut is much better.

So in summary what I am saying is look at the business use case, not the kind of license.

 

[Konstanz]

I think Revolut is controlled by the Russian KGB. Revoluts Co-Founder is Russian guy Nikolay Storonsky. His father Nikolay Mironovich Storonsky is Deputy General Director of Science for Gazprom Promgaz
Also, Russian billionaire Yuri Milner has invested 250m$ into Revolut. Yuri Milner is closely connected with Kremlin.

 

[bizniz]

I think Revolut is controlled by the Russian KGB. Revoluts Co-Founder is Russian guy Nikolay Storonsky. His father Nikolay Mironovich Storonsky is Deputy General Director of Science for Gazprom Promgaz

It may well be. I have no idea. A lot of weird things going on these days. If so I guess that makes it even safer because besides the UK and Lithuania not wanting it to fail, Russia also wants to protect it.

Wherever you bank, it would be smart to assume that the KGB, CIA, NSA, MI5, MI6 etc all have total access to your information. So don't do anything to upset the KGB