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The
announcement follows a similar deal last month where Mastercard
rival Visa Inc V.N partnered with Revolut as part of its global
expansion plans.
Revolut, one of the world's fastest-growing bank account
providers, aims to undercut established players such as Bank of
America BAC.N and JPMorgan Chase JPM.N on everything from
foreign exchange to current accounts and remittances.
"We're going to ensure our product is better value for
customers, most U.S. banks charge $10 a month for an account and
$10-$15 for local transfers and we'll be offering both for
free," Revolut chief executive and founder Nikolay Storonsky
told Reuters.
"Today’s announcement confirms the two businesses will partner
on a minimum of 50 percent of all existing and future cards
Revolut issue in Europe," the two companies said.
Revolut's deal with Mastercard will allow it to plug into its
networks so that Revolut cards will be accepted by merchants in
the 210 countries where Mastercard operates.
The British-based banking app aims to hire around 3,500 staff in
the next year as it moves into North America and Asia, bringing
its total employees to around 5,000.
Fintech firms such as Revolut, Monzo, and Starling have grown
rapidly in Britain by undercutting traditional banks' prices
while offering generally slicker service, but they face a
challenge to build sustainable profits.
Most make their money from charging a subset of users for
premium features, rather than lending money out as traditional
banks do.
Revolut may also face a greater challenge in the U.S. market,
where customers' wallets already bulge with multiple cards and
local fintech firms such as Robinhood have a head start in
offering fee-free stockbroking, one of Revolut's selling points.
Revolut differs from mainstream banks in that customers'
deposits are not directly protected by government guarantees,
but held in segregated accounts at traditional lenders.
While customers have therefore been slow to entrust their
savings to Revolut since its launch in 2015, some 8 million
customers have signed up for an account, attracted by its slick
app and rock-bottom forex rates.
(Reporting by Lawrence White. Editing by Jane Merriman)
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