Fintech unicorn Revolut got a boost in customers, valuation, and profit after it added services for bitcoin, litecoin, and ethereum last year. Today (May 24), XRP and bitcoin cash join the party. Customers will now be able to buy and sell all of these digital assets directly from Revolut’s app.
One question remaining is whether bringing crypto aboard will translate into business (cross selling) for Revolut’s other services. The London-based startup, which calls itself a “banking alternative,” also provides services like a debit card, payment app, and travel insurance. Revolut says 20% of its 1.95 million customers have unlocked the crypto feature so far, and it expects more will do so thanks to the virtual tokens it’s adding.
Providing buying and selling for crypto may be lucrative all on its own. Revolut doesn’t charge for major fiat foreign-exchange during regular trading hours. But it does apply a 1.5% fee for crypto transactions, which it says is to help compensate for the additional volatility risk. Access to the likes of bitcoin may have compelled some customers to upgrade to Revolut’s premium service, which gave them earlier access to crypto. The company says it already handles 100,000 daily digital token exchanges from its users.
To date, larger financial institutions have been cautious. The lack of reasonable regulation, combined with the sheer volatility, makes digital assets an unacceptable risk for most companies, says Brian Jamieson, CEO of Centtrip, which provides international payments and foreign-exchange for corporate clients and high-net-worth customers.
“We are seeing a reluctance from the banks and card schemes to offer services or support to crypto-related companies,” Jamieson says. “We receive requests for accounts from crypto-based companies almost daily that we turn away.”
There are signs that big finance is beginning to come around—whether out of familiarity or greed—if attendance at Coindesk’s blockbuster Consensus conference last week is any indication. But for now, crypto remains mainly the lucrative province of financial upstarts, often run by young executives. (The CEOs of Robinhood and TransferGo, both of which recently added bitcoin to their lineups, helped start their companies before they hit age 30. Nikolay Storonsky, Revolut’s chief (paywall), is only a few years past that mark.)
Another question is whether adding more digital tokens will enable companies like Revolut to keep up their pace of growth, especially as prices decline for bitcoin and other offshoots, and as a growing number of companies begin to support these markets. For the time being, it’s helping propel things along: Revolut has more than doubled its customers since October, when it first said it would offer digital assets.