London-based fintech startup Revolut has announced that it will temporarily migrate its Irish users’ accounts to its business in Lithuania because its e-money license will no longer be valid as a result of Brexit.
The move is aimed to ensure that Revolut can continue to serve its non-UK customers and hedge against a no trade-deal Brexit.
Revolut’s Irish customer accounts have until now been regulated by the UK Financial Conduct Authority under EU passporting rules. These passporting rules allow financial institutions to ‘passport’ or transfer the license to another country without having to get full regulatory approval every time. However, after Brexit, on December 31st, Britain will give up its so-called ‘passporting rights’ and the UK regulator will no longer be able to oversee the accounts of EU citizens.
Speaking on the development, a spokesperson for Revolut says, “While that process is ongoing, to ensure that Brexit does not impact our Irish customers, we will temporarily migrate their accounts to Revolut’s e-money licensed business in the EU, based in Lithuania.”
He further adds, “Our plan is that once the business in Ireland is authorised by the CBI, we will migrate our Irish Revolut customers to the Irish entity and, in due course, many of our other Western European customers.”
According to the company, it’s 1 million Irish customers will therefore be regulated by the Bank of Lithuania, which granted Revolut an e-money licence in 2018. NB customers are being transferred to the Lithuanian e-money licence, not the Lithuanian bank licence, which lies with a separate entity.
Revolut’s Irish business has hired 32 staff and continues to build up its business in Ireland.
In the interim the day-to-day functionality of Revolut will remain exactly the same as it is. Customers’ money will continue to be held securely in ring-fenced accounts in top-tier international banks.Support and services will be carried out by the same teams as currently.
However regulatory responsibility for the account, which until now was the regulatory responsibility of the Financial Conduct Authority in the UK, will during this period be the regulatory responsibility of the Bank of Lithuania. While the terms and conditions will have to be updated to reflect this customer migration, they will remain essentially unchanged and customers will still have all the protections of EU law.
Launches metal cards
Founded in 2015 by Nikolay Storonsky and Vlad Yatsenko. Revolut is a financial services company that specialises in mobile banking, card payments, money remittance, and foreign exchange. It includes a prepaid debit card, currency exchange, and peer-to-peer payments.
One of Revolut’s key features includes conversion from one currency to another based on interbank rates with no fee. Customers can hold foreign currencies in their accounts or send money to another Revolut user or a bank account outside of their country.
The company, today, has launched distinctive metal cards as an exclusive benefit to Revolut Business paid company plans. Revolut Business is the business account from fintech app Revolut and has over 500,000 business customers worldwide. Revolut Business was launched in July 2017 across the UK and Europe and helps customers get more from their business account with powerful tools that provide total control over their business’ finances.
Revolut Business metal cards are crafted from a single sheet of reinforced steel and come in five signature colours: black, gold, rose gold, space grey and silver. Customers on paid company plans receive one, two, or five free metal cards each – depending on their selected plan. Additional metal cards are available for purchase for £49 (€54.4) each, or the equivalent in your chosen currency.
In just five years, the company has more than 12mn customers in the UK and Europe. Earlier this year, Revolut had raised $500M (approx €425.8M) in its Series D round of funding with a valuation of $5.5B (approx €4.6B). To date, it has raised over $800M (approx €681M) in funding and employs more than 2,000 people globally, thus becoming the UK’s most-valued fintech startup.
Featured image credits: Revolut