Revolut is still dreaming about APAC expansion

Written by Kapronasia || June 11 2024

How long has Revolut been saying it has big plans for Asia Pacific? At least six years, if not longer – by our calculations. It has a presence in Australia, New Zealand, Japan, Singapore and India and at one time planned to set up shop in many other Asian countries. Yet this ethos originated in a time of low interest rates and near infinite VC funding. Revolut did not have to worry too much about profitability back then, so it could devote most of its attention to growth. At the same time, the multicurrency wallet that lies at the core of Revolut’s value proposition may not be that attractive to customers in emerging markets more focused on gaining access to core retail banking services.

Every few years, a Revolut executive gives a media interview reiterating the company’s interest in Asia. This time it was the company’s APAC growth head Charlie Short. He told Bloomberg in a recent interview, “Accelerating Revolut’s growth in APAC markets remains a top priority,” adding that the UK fintech unicorn firm is planning a regional marketing push and is focused on “meeting local licensing and demand needs.”

But what exactly does he mean by that? The region is large and extremely diverse. If we step outside the Anglosphere, we find that Revolut’s presence in the APAC region remains rather modest. It has launched products in Japan and Singapore, but nothing (to date) that has gained significant traction. Stringent capitalization requirements caused the company to eschew applying for a digital banking license in Singapore. It remains to be seen if the workarounds bear fruit. For instance in late May, Revolut launched Flexible Accounts in the city-state, which invest customer deposits into USD-denominated money market funds (MMFs) managed by global asset manager Fidelity International. Revolut calls this a “high-yield savings product” because of a 5.21% APY.  

An even more challenging market for Revolut is India, where it has sought to carve out a niche in payments before moving into trading, investment and credit. Three years into the foray, Revolut does not have a lot to show for it, though in April, the Reserve Bank of India granted the UK fintech in-principle authorization to issue pre-paid instruments (PPI), including prepaid cards and wallets. We understand it took so long in part because of data localization requirements.

Revolut committed to invest US$45 million in India back in 2021, and we will be interested to see how far that goes – and if the company is willing to redouble its efforts at some point. With Google Pay and Walmart-backed PhonePe dominant in domestic payments, we are not sure how regulators will perceive a foreign fintech with ambitious plans for the cross-border market.

Australia and New Zealand offer Revolut the best opportunities in APAC. They are the most similar to its home market of the UK – and the company could ultimately obtain banking licenses for both countries. Revolut already has a lending license for Australia. It just needs an authorized deposit-taking institution (ADI) license so it can be a fully-fledged bank.

To some degree, its ADI bid could depend on whether it ultimately receives a banking license in the UK. This process has dragged on for about three years already. In Nov. 2023, Revolut appointed a new UK CEO. While the company denied the move was related to its banking license application, we wonder if that is entirely accurate.