Revolut update: credit lines, premium accounts, partnerships
This year has been a busy one for London-based fintech startup Revolut, and it recently announced both credit lines and premium accounts in advance of a funding round through Seedrs. This week, a partnership with Trussle has also been announced. For some reason, the story is best told via Westlife song titles.
Back in February, we noted that free FX app had made two big updates: launching its chatbot RITA and, more significantly, current accounts. Just before that, Revolut introduced a unique bill-splitting functionality to the app.
A few months on and several more interesting developments have occurred. Firstly, Revolut has partnered with Lending Works to provide credit lines to users through the app. ‘Pay for big purchases in small instalments at half the cost of banks,’ Revolut proclaims, referring to its offer of £500 to £5000 of credit paid back over 12 to 60 months, at a representive APR of 9.9%.
The feature has been added to the profile section of the mobile app (instead of being given a dedicated tab on the main menu). The feature is easy to navigate and can be easily used by customers – in just a few taps, an approval can be given, and the money could be in your Revolut account in minutes. Of course, as this is Revolut, the money can be spent in any currency, without fees.
Lending Works is a peer-to-peer lender, so Revolut customers are borrowing from individuals, not from banks, which keeps the rates low. 9.9% may not be the lowest rate out there, but few credit cards can be processed as quickly as this.
Mapa Analyst Ross Gallager comments: ‘With the appetite for credit among UK consumers rising sharply, challenger providers are looking to break the traditional dominance of the incumbents by offering a superior experience. Experience is important when it comes to applying for credit, and FinTech providers are uniquely positioned to address traditional pain points in the digital journey and capture market share.’ Established third party providers such as PayPal are also offering instant access to credit – already integrated within the digital checkout journey, disruption is minimised.
This week, a further partnership has been announced: Revolut will join forces with online-only mortgage provider and proptech startup Trussle. Trussle is backed by Zoopla and uses artificial intelligence to advise people on the right mortgage.
Revolut users will get access to Trussle’s mortgage broking service, via the homescreen of the Revolut app, as well as ongoing monitoring that can alert homeowners that they could save by switching to a new deal. Customers can search over 90 lenders and apply online via Trussle, which lets you see what you can borrow in just 60 seconds, and receive a printable Mortgage in Principle in under five minutes.
Revolut users can access the service for free and, as an added incentive to accelerate the partnership, basic Revolut users will receive a £50 reward into their account for each mortgage transaction submitted; Premium Revolut users (see below) will receive £125.
According to TechCrunch, and as we would expect, Revolut plans to partner with more third parties in the future to expand its offering. ‘You can expect travel insurance, an investment product and savings accounts in multiple currencies… Revolut also plans to allow lending and borrowing between Revolut users in multiple countries.’
In March, another product development was unveiled – Revolut Premium. While continuing to offer a free service to whoever wants it, the challenger is adding a premium tier costing £6.99 a month, for users in 42 European countries.
The new service is available via the app and was promoted to users via an interstitial and homepage banner, and clearly positioned in the main menu using contrasting colourful text and iconography.
The offering also comes with a premium Mastercard, available in a range of colours. The card has a range of benefits for users, such as large ATM withdrawal limits, overseas medical insurance, and 24/7 customer support. The startup has also said they will be adding new benefits down the line.
The new product developments are part of the challenger’s aggressive growth strategy. Having already acquired up to half a million customers, Revolut is seeking to acquire an additional £4 million in capital to meet the growth ambitions.
Revolut openly promotes its market performance to users within the app.
According to Business Insider, the funds will be raised through Seedrs and the campaign will launch later this year.
The benefits of using Revolut like a current account are clear. As the company says, ‘Once funded, the Revolut account is like having a local bank account wherever you are. You can spend or transfer money around the globe fee-free with the real exchange rate and take advantage of other features like blocking your card temporarily, splitting bills instantly with your phone contacts and real-time payment notifications.’
As Mapa Analyst Rory Pennington notes, ‘Revolut is a good example of the burgeoning trend for virtual cards, something that has a clear benefit to consumers from an onboarding point of view: I don’t have to wait for a card in the post before I spend my money. While Revolut is still giving customers (the option to have) physical cards, we know that card issuers are starting to worry about the relevance of cards versus digital tokens. This is particularly true as PSD2 starts to open up banking and make it possible for customers to send and request funds directly from and between accounts and not via card numbers.’
But what of the app? Is it providing a customer experience to compete with the big incumbents? Who else is improving the mobile experience when it comes to product discovery and applications? Check out our full Mobile Banking Dashboard to find out.