Digital Banking App Revolut – London’s Latest Fintech Unicorn Disrupting International Money Transfer, Reviewed

The big news in London fintech circles this week is a reported $250 million fundraising round which has gone to Revolut, the digital banking app that offers a range of money-related products, but is probably best known for its payments technology, and international money transfer service.

Revolut’s funding came from international VC DST Global, early investors into Twitter and Facebook, and alongside earlier investments from the likes of Index Ventures, Ribbit Capital and Draper Esprit. It brings the 3-year-old startups’ valuation to a cool $1.7 billion post money valuation – a five fold increase in less than a year – which makes Revolut the latest member of the London fintech scene’s Unicorn club.

The giant valuation just goes to show the impact that new technologies and companies are having on products and services that we used to rely on our banks to provide, such as sending money overseas.

Revolut says that more than $1.8 billion is processed through its platform every month, and that the company is signing up between 6-8k new customers every month. It now has more than 200k active daily users, and hopes to sign up 100 million new users in the next five years.

Although Revolut intends to spend the money attacking new global markets; US, Canada, Singapore, Hong Kong and Australia are top of the list; and rolling out new services such as insurance products, credit, savings and cryptocurrency trading, Revolut’s success was originally built on international money transfer.

So, how good a bet is Revolut’s core money transfer service?

Better Than The Banks!

On its website, Revolut says that customers can send money overseas up to 10x cheaper, to more than 120 countries. A chart reveals that, predictably, that banks are far and away the priciest way to send money abroad, charging a whopping £44.13 to send £1,000 from Britain to Europe.

Why do banks charge such high fees for international money transfers? The answer is straightforward; banks are simply not set up to handle small scale C2C money transfers. Banks are used to sending large volumes of money overseas on behalf of large corporates, so when it comes to smaller volume transactions, they are unable to offer the fairest exchange rates, and are forced to charge high fees to process them using software that is becoming increasingly outdated, and expensive to operate.

Some banks, such as Singapore based DBS, are beginning to offer more competitive international money transfer options, using technology that is a better fit for purpose, but for the time being at least, when it comes to sending money overseas, banks are best avoided.

Fee Free Transfers?

Revolut’s website also suggests that it is cheaper than fintech rival TransferWise, who charge a flat fee of £4.90 for transferring £1,000 to EUR, and Western Union, the money transfer giant, who charge nearly double what TransferWise ask; £9.26. Revolut also says that it uses the interbank exchange rate – the same rate used by banks to trade between themselves.

The transaction speed Revolut offers is slightly less impressive – it can take up to 2 working days for a transfer to reach its intended recipient. The process is simple, however; load up money from a credit or debit card, and you are ready to go. You can even set up recurring payments, in 25 different currencies.

The Money Cloud View

Revolut is the very model of a modern fintech service provider, that has made its name by offering faster, cheaper money transfer services. There is no reason to think that, as the company branches out and begins to offer a broader range of services, its core remittance service will be anything other than a good option to consider when sending money overseas.

But is it the best? The costs are certainly low, but will Revolut be able to sustain such low prices over the long term? Right now, the company is all about growth, so prices are possibly being kept unnaturally low in order to attract new business. This makes Revolut a great option to consider in the short term.

Conclusion

Revolut offers an attractive service offering great rates for sending smaller amounts overseas. For those looking to send transactions above £1,000, say, it may be best to try a dedicated broker who can advise about issues such as currency hedging, or exchange rate fluctuation, and offer personalised advice from brokers who truly understand the market-place. In short, it always pays to search for the best overseas money transfer service using a comparison site.

This content is sourced and brought to you by The Money Cloud – comparing the best rates for sending money overseas offered by hand-picked, regulated brokers and money transfer agencies.