Revolut gets nod to launch commission-free stock trading in the U.S.
Europe’s largest neobank, Revolut is set to officially roll out its commission-free stock trading platform in the United States.
The London-based fintech unicorn has been operational in the US retail market since 2020 and is now approved as a licensed broker-dealer under the brand “Revolut Securities”.
The news comes barely two months after Revolut, which offers banking and trading services through an app, raised $800 million in a funding round that valued the firm at $33 billion. This valuation was a sixfold increase compared to nearly $5.5 billion the UK firm was worth in 2020.
To further sweeten its offering, Revolut Securities plans to introduce a fractional trading feature as a way to lower the bar for young investors to as little as $1. The feature allows small-bucks investors to diversify their portfolios by spreading their relatively small capital over a broader range of stocks.
“We are building a single app where people can manage all aspects of their finances, from banking and foreign exchange to cryptocurrency and stock trading. We’re eager to break down common barriers to entry around stock trading such as account minimums and complex interfaces”, said Nik Storonsky, Founder & CEO of Revolut.
Trading has become a booming business
Revolut’s expansion into the US market comes amid a boom in retail trading. The COVID-19 pandemic and government stimulus checks helped draw in a different cohort of investors, many of them young and new to investing.
The US brokerage industry is estimated to have added more than 20 million new accounts in the last two years, with Robinhood alone likely commanding nearly 50% out of that figure. The listed broker has seen explosive growth with nearly 23 million funded accounts and $102 billion in assets under custody, according to its Q2 results.
Earlier in March, Revolut launched its business accounts in the United States across all 50 states. The move came in tandem with the announcement of filing for a US banking license, barely a week after it pulled operations out of Canada.
Revolut has been among a number of app-only fintech companies that are looking to branch into banking as they diversify their revenue stream and bring new services to their existing customers.
Revolut currently offers financial services in the US through a partnership with Metropolitan Commercial Bank. Before March 2020, Revolut’s services, which attracted over 15 million customers, had been available in the UK and Europe with US applicants previously being held on a waiting list.
The new business roll-out comes as the market for Fintech firms offering alternatives to traditional banks has become fiercely competitive. Revolut is already going up against other established rivals, such as Stripe, which recently expanded its portfolio of partner banks that have signed on to offer co-branded banking services.