UK fintech Revolut targets bank clients with cheap forex

United Kingdom fintech firm Revolut hopes to woo Australian bank customers with low-cost foreign exchange and budgeting assistance, in its first foray outside Europe.

Revolut, which has more than 5 million customers in various European countries, will launch in Australia on Thursday, with an app that is pitched at helping people gain greater control over their spending, as well as a lower-cost way to transfer money overseas.

Revolut, a UK fintech launching in Australia, says it will allow consumers to transfer money overseas at wholesale exchange rates.Credit:Phil Carrick

The fintech firm, which does not have a local banking licence, is offering an app that provides a transaction account linked to a debit card. Customers receive notifications on their spending patterns via the app, including when they are approaching set budgets for certain sorts of purchases, such as eating out.

Users will be able send and request money from others with the app, and it offers customers the ability to "round up" spare change from purchases, assisting with saving, similar to a service on offer from local providers like ING and Raiz.

Revolut also says it will allow customers to hold and exchange 15 currencies in the app, and send money overseas at the "spot" or wholesale foreign exchange rate, without transaction fees or mark-ups charged by banks.

"When it comes to spending and sending money overseas, you should not be forced into paying endless hidden fees," said its Australian director Will Mahon-Heap.

When it comes to spending and sending money overseas, you should not be forced into paying endless hidden fees.

The Australian Competition and Consumer Commission (ACCC) last October launched a review of the foreign exchange market, citing World Bank figures that Australia was the third most expensive G20 country to send money from.

Revolut says it has 20,000 Australians on a waiting list to the use the app, and it will start rolling out a version to some of these people from Thursday.

The app does not charge a monthly account keeping fee, though it will roll out various premium options, which provide extra services in exchange for fees.

The company is focused on expansion and is not yet profitable, but in Eurtope it makes revenue from interchange fees and fees for premium accounts, and it is preparing to go into personal and business loans.

It is the latest move by a fintech firm to target a slice of the major banks' business, alongside "neo-banks" including Volt, Xinja, 86 400 and Up (provided by Bendigo and Adelaide). Up on Wednesday said it had signed up 100,000 customers since its launch last year.

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