What Is/Who Are Revolut?
Revolut is an app-based bank founded in July 2015 with over 6 million users worldwide, of which over 2 million are in the UK.
It quickly gained popularity among tech-savvy travel enthusiasts by offering cheap travel money via an app and a prepaid debit card. Since then, it has expanded the app’s features and product offering to include cryptocurrency trading and insurance products, and more recently, commission-free stock trading.
As Revolut state on their website “Because today’s hyper-connected world deserves a financial partner just as progressive”. Revolut has a full eurozone banking license and is in the process of obtaining one in the UK.
Should You Join Revolut? Is Revolut Right For You?
Despite the emergence of competitors, Revolut is probably still the most attractive option if you’re looking for foreign currency, whether you’re traveling abroad or making international bank transfers.
Benefits Of Revolut
It allows users to spend fee-free while abroad in 150 currencies, exchanged at interbank rates.
Revolut allows users to exchange and hold money in up to 29 currencies, and the ability to set alerts or automatically exchange currencies once they hit certain targets – very helpful when you’re planning a trip abroad.
The fee-free currency exchange limit is £5,000 per month, after which a 0.5% fee applies under the Standard (free) account, while Premium/ Metal accounts have no limits.
Foreign currency exchange can be done instantaneously within the app, which is helpful when you’re traveling as it can be done seconds before paying with your prepaid debit card.
It also facilitates instant transfers between Revolut account holders with just a few clicks. The fee-free cash withdrawal limit is £200 a month with the Standard account, after which a 2% fee applies.
How Does Revolut Work?
You can join Revolut by downloading the app, completing the quick setup process and ordering your debit card.
The standard account is free, but comes with a £4.99 delivery charge for the card.
The premium account is priced at £6.99/ month and the metal version at £12.99/ month.
The main difference between the premium/ metal and the free accounts are as follows:
- Unlimited foreign currency transactions
- Higher fee-free ATM withdrawal limits (£400 and £600, respectively)
- The addition of overseas medical insurance, delayed baggage and flight insurance
- Disposable virtual cards and lounge access.
The metal account also comes with a metal card, cashback on purchases and a concierge service. All account holders can add things like phone insurance and pay-per-day overseas medical insurance to their account for a fee.
Is Revolut Legit? Are They Even A Real Bank?
While Revolut is authorised by the FCA, it does not yet have a full UK banking license. This means deposits are not covered by the £85,000 FSCS guarantee, however, client funds are held within a segregated account within the ring-fenced operations of Barclays or Lloyds.
In other words, your money is pretty safe in the event that Revolut goes bust – but not as safe as if the company had the banking license.
Revolut’s free account comes with a number of handy security options, which you can opt into as you see fit to enhance the security of your account, e.g. location-based security (payment will not go through if your phone is too far from the card) and the ability to disable contactless, e-commerce or stripe payments and ATM withdrawals.
How Does Revolut Make Money? What Are Their Fees & Charges?
Similar to other banks, Revolut earns money from customer fees (e.g. subscriptions, foreign currency transactions in some circumstances) and any commissions from partners and merchants (e.g.when payment is made using its cards).
As it develops towards its goal of becoming a global digital bank, Revolut’s revenue sources may expand to include further traditional revenue streams for banks, such as interest from lending.
What Else Does Revolut Do?
Revolut have previously come under pressure due to a range of regulatory and reputational issues, fuelling criticism that its fast growth is difficult to control or manage.
Regulatory authorities have investigated its links to Russia and potential money laundering issues. Back in February, it launched what proved to be a controversial tube ad campaign for Valentine’s day.
On the product front, Revolut recently announced the launch of a commission-free stock trading service, initially available to its Premium account holders wishing to trade US stocks. They have also recently added Apple Pay and a Donations feature. They are currently beta testing a rewards program called Perks.
What Are People Saying About Revolut?
While the sheer volume of customers (Revolut has over 6m customers worldwide) and rapid pace of growth since the company was founded should speak for itself, Revolut is noticeably absent from many of the ranking tables published by popular personal finance websites in the UK.
However, it has a four-star rating on Trustpilot UK (over 22k reviews), similar to Monzo (just over 3k reviews) and was mentioned in a recent review of the best and worst debit and credit cards to use for your summer holidays in the Guardian (as a low / no-cost alternative).
Overall, Revolut provides a convenient way to obtain cheap travel money and do fee-free international bank transfers. It has great usability and a range of attractive in-app features, similar to its competitors. A full UK banking license should help put customers at ease and a broader product range, such as including savings accounts, would be helpful, too.
What Are The Benefits Of Revolut?
- Cheap travel money and international bank transfers in many currencies.
- The ability to hold money in different currencies within the app.
- In-app features including budgeting, analysis of spending habits and the ability to set spending limits.
- “Vaults”, which allow you to set money aside for specific purposes. You can automatically contribute to a vault by rounding up purchases or by setting up a recurring payment. You can also create a Group Vault that you can add users to.
- Easy to freeze your card.
- Optional additional security features.
What Are The Drawbacks Of Revolut?
- Revolut does not yet offer a wide range of banking products, such as savings accounts or an overdraft facility.
- No full UK banking license, which means your deposits are not covered by the FSCS guarantee.
- Low limits for fee-free cash withdrawals, including within the UK.
- Inability to add money to your account via cash or cheque.