London-based fintech startup Revolut has announced that it is applying for a bank charter in the U.S. The company has submitted a draft application with the FDIC and the California Department of Financial Protection and Innovation.
If the company manages to get a charter in California, it would let the company operate throughout the U.S. as an independent bank. The discussions are still ongoing, which means it could take a while before the authorities grant a charter to the company.
After obtaining a charter in the U.S., Revolut could start offering more financial services. In particular, it would open up more opportunities when it comes to lending and savings products.
Right now, Revolut partners with Metropolitan Commercial Bank in the U.S. — they handle your deposits and they are insured by the FDIC. They also issue cards for Revolut.
In the U.S., Revolut is also launching Revolut Business. These accounts let a company send and receive international payments more easily. Companies can also use the service for payments with virtual and physical debit cards. Revolut Business is available across all 50 states. There are 500,000 companies using Revolut Business in Europe.
Revolut currently has 15 million customers for its financial super app — most of them are in the U.K. and the European Union. The company recently announced that it was applying for a banking license in the U.K., its home country and its biggest market. In Europe, Revolut has a specialized license from the Bank of Lithuania — some customers are already moving their account to Revolut Bank.
Revolut isn’t the only fintech startup applying for a bank charter in the U.S. Last month, Brex announced that it would apply for a bank charter in Utah. Varo Bank also obtained its own bank charter last year.
It proves that leveraging another bank’s charter is great for growth. But at some point, if you want to launch new products and generate more revenue from those products, you have to get your own charter.