- UK-based neobank Revolut has launched in Australia, bringing the beta version of its app to the country.
- Revolut selected Melbourne for its headquarters.
- The company refers to itself as an “electronic money institution”, meaning it has no physical branches.
It joins an emerging stable of Australian digital-only banks including Xinja, Volt Bank, 86 400 and Up.
Revolut, which has selected Melbourne for its Australian headquarters, will become a local employer in the fintech space as it plans to bring in 30 jobs by the end of the year. The company is currently valued at $US1.7 billion (2.4 billion), according to the AFR.
While Revolut has obtained a banking licence from the European Central Bank, it is not technically a bank in Australia. Instead, the company refers to itself as an “electronic money institution”, meaning it has no physical branches.
The Australian Securities and Investments Commission did, however, approve the business, the AFR reported.
With the Revolut app, users can send and request money from other Revolut customers and add GIFs to make paying back your mate more interesting. It also lets users track the amount they are spending on things like food delivery, socialising and everyday necessities.
According to the AFR, Revolut doesn’t have plans to take deposits, instead it will provide a pre-paid transaction account. This sets the company from apart from Volt Bank, which received approval by the Australian Prudential Regulation Authority to hold deposits.
Revolut announced that it will roll out its services to the first 20,000 people on its waitlist, with more to be added over the coming weeks.
In the UK, Revolut is heading towards a total of five million customers, but there have been some concerns raised with the company's compliance. Earlier this year, The Telegraph reported the company didn't screen users for three months and may have failed to block suspicious activity.
According to Bloomberg, the U.K.’s Financial Conduct Authority released a statement at the time, noting “the FCA expects all firms to have appropriate systems and controls in place at all times to monitor and counter the risk their services are abused for financial crime."
Revolut denied the accusations, stating in a blog post that they upheld their regulatory commitments, there was no breach suffered and that they simply had to revert to an older system to screen users and payments.
Earlier this year, payments and regulatory experts urged ASIC to reconsider granting Revolut a licence to operate in Australia, according to Banking Day.
Risk management expert and retired Macquarie University academic, Dr Patrick McConnell said ASIC should review the licence because of the concerns raised around Revolut's compliance issues.
"There are so many red flags going up at the moment that you need to ask the question whether ASIC really wants to allow this company to operate in Australia,” McConnell said in the article.
In addition, Wired.co.uk highlighted claims of the company's 'toxic' work culture. Following the claims, CEO Nik Storonsky penned an open letter that stated, "We haven't always gotten things right" and "we are not the same company that we were 12-18 months ago, when these mistakes were made".
Only time will tell how Revolut pans out in Australia.