Revolut aims to take over Indian banks and their ‘criminal’ forex charges

British financial technology revolution — which has now launched in India — says cross-border payments remain one of the most underserved financial services in India. By its estimates, Indians spend about $30 billion abroad every year and lose about $600 million in bank fees — fees that its boss in India calls “criminal.”

“It used to be the preserve of banks,” Paroma Chatterjee, CEO of Revolut India, told TechCrunch. “You go to your bank to take currency, or foreign exchange from your bank, or you take a travel card issued by your bank when you travel abroad… and there were huge fees charged for this.”

Since 2021, Revolut has been working on its launch in India, aiming to fill what it sees as gaps in the foreign exchange and traditional payments spaces in the country. London-based financial technology Acquired Arvog Forex In 2022 to obtain a license and provide multi-currency remittance and account services in India. And in April of this year as well Obtained a Prepaid Instrument (PPI) license. from the Reserve Bank of India, allowing it to issue prepaid cards, support digital wallets and integrate with the government-backed Unified Payments Interface (UPI).

With these regulatory approvals, Revolut aims to challenge traditional banks in India and compete with existing fintech players. The British startup is targeting more than 150 million “globally ambitious and digitally native” Indians between the ages of 25 and 45, with plans to onboard about 20 million users by 2030 and process at least $7 billion of their transactions.

Such regulatory approvals — including a PPI license — allow fintechs to offer a more diverse experience than players that rely on banking partnerships, Chatterjee said. “We can deliver the kind of customer experience we want to deliver,” she said.

Revolut will offer Indian consumers a prepaid wallet with UPI support and its own UPI handles, as well as a domestic Visa card and an international multi-currency Visa card. It will also offer dedicated accounts for kids and teens linked to parent profiles, a subscription-based model, and budgeting and analytics tools that provide insight into spending habits.

It is worth noting that the startup has regulatory permissions to enable local and international payments and transfers through its platform. It also has a license to enable same-day money transfers from India through a local bank partner.

Unlike many Indian fintech companies that use minimal know-your-customer (KYC) checks to quickly onboard users for limited, low-value transactions, Revolut will only offer full KYC wallets. The fintech will also verify new users against global sanctions lists, including those maintained by the Office of Foreign Assets Control and the United Nations. This approach is aimed at attracting “high-intent customers” who want to complete a more detailed onboarding process, including Aadhaar and video verification, Chatterjee said.

“Someone will only do that if they’re interested in using the product. So, that full customer that’s been KYC enlisted is going to be my customer metric,” she noted.

“In a country like India, once your name is listed on the app store, sheer curiosity drives downloads,” she said. “This is not our measure of success.”

The fintech also aims to measure its success in India by the depth of user engagement and profitability, not just the growth of its user base.

“There are people talking about having 300 to 400 million customers,” Chatterjee told TechCrunch. “Globally in 39 countries, Revolut has 65 million customers, valued at $75 billion. The reason is that out of those 65 million customers, Revolut processes over $4 billion worth of transactions and generates over $1 billion in revenue. That’s because out of those 65 million customers in any given month, there are over 25 million active customers.”

She points to the new Revolut rating Announced last month On the back of a secondary share sale, which raised it from $45 billion last summer.

She also said that Revolut already has a waiting list of over 350,000 people in India, which it plans to join later this year before opening the app to new users. However, the exact launch timeline will depend on how quickly the company clears the queue and customers complete KYC and anti-money laundering (AML) checks.

The startup is also exploring partners other than Visa, including the Indian government’s RuPay, as it ramps up the product to offer customers a choice of networks.

It has a revolution It has already pumped in $45 million in India to start its operations and localize its entire tech stack to comply with the country’s data sovereignty regulations. Chatterjee said it plans to invest more as it begins operations.

Of Revolut’s 10,000 employees worldwide, about 3,500 are already based in India – its largest workforce globally, and even larger than its home market of the UK. Some of these employees also work on products and features available in markets outside India.

But as significant as Revolut’s plans are, it will still face competition once it arrives. While banks in India dominate foreign exchange, fintech companies such as Niyo, Scapia, Fi and BookMyForex are already active in the cross-border remittance market in India.