Tuesday 17 September 2024 11:50 am
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Revolut is trying to diversify into new revenue streams outside Europe, which contributed to more than 90 per cent of its sales last year.
Revolut is planning to launch in India next year, targeting top-tier consumers in the world’s most populous nation as part of aggressive expansion efforts.
The London-based banking app is eyeing up a slice of India’s lucrative fintech market, which serves millions of consumers within its growing middle class who previously had limited access to financial services.
Revolut established a presence in India in April 2021, but it was not until earlier this year that it secured an in-principle authorisation from the country’s central bank to issue prepaid cards and wallets.
After testing products among its more than 4,000 local employees, Revolut India expects to launch its app, domestic and multi-currency cards in 2025.
“We’re actually very, very close, we’re literally down to single-digit bugs right now in the system,” Paroma Chatterjee, chief executive of Revolut’s Indian arm, told the Financial Times. “India is being treated as a critical expansion market.”
Revolut, Europe’s most valuable fintech, is trying to diversify into new revenue streams outside Europe, which contributed to more than 90 per cent of its sales last year.
The fintech received an EU banking licence from the Bank of Lithuania in December 2021 and now boasts more than 10m retail customers in eastern and central Europe alone.
Revolut has reportedly applied for e-money and remittance licences with the Central Bank of the United Arab Emirates in a bid to expand in the Middle East.
To supports its growth, Revolut has embarked on a hiring spree to boost its global headcount by around 40 per cent to 11,500 in 2024.
In India, New Delhi has backed the proliferation of fintech through the India Stack – a digital infrastructure allowing companies to build integrated apps with access to services like ID verification, loans and welfare payments.
“There will be a significant number of competitors in the market, all with a significant amount of funding,” Chatterjee said. “We will have to earn our right to win this market.”
She added that, given India’s low GDP per capita, the realistic size of Revolut’s market in the country was “pretty much” the top 10 to 15 per cent of its 1.4bn population, “which is sizeable”.
“That’s the segment that also consumes Netflix, that consumes your Apple products… that travels and travels internationally as well, what I term the global India,” Chatterjee said.
“They have friends and family overseas, they’ve probably studied overseas, worked overseas and come back or vice versa.”
Revolut is due to file an audit report with India’s central bank next month with the goal of becoming fully authorised.
Chatterjee said Revolut’s strategy for India upon securing this approval was “not just blindly scale focused – we’re very profitability focused”.
Revolut was founded in 2015 as a digital payments and money transfer app in the UK before expanding globally and offering a range of services, from cryptocurrency trading to an eSIM plan.
It booked a record pretax profit of £438m in 2023 and achieved a $45bn valuation in an employee share sale last month.
Revolut’s domestic arm received boost earlier this summer when it secured a UK banking licence, subject to temporary restrictions, after more than three years in regulatory limbo amid audit issues, criticism of its corporate culture and the delayed filing of its accounts.
The licence allows Revolut to directly hold deposits and increase lending in its home market, where it boasts more than nine million customers. It is also expected to help Revolut’s chances of securing a licence in the US.
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