As part of the recently announced IIAwards, in which we celebrate innovations in the fintech and crypto industry, today we will talk about Revolut and will analyze it from different points of view.
Revolut is a fast-growing fintech startup founded in 2015 and mainly known for its banking and payment services. In 2019, the company also launched its commission-free stock trading provided by Revolut Trading Ltd. Revolut is regulated by multiple top-tier regulators, including the US Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).
Commissions & fees - (4/5)
Despite being a relatively new addition to the trading industry, Revolut has already announced itself as one of the most competitive pricing plan providers. In addition to guaranteeing no-fee stock trading, the company doesn't charge any inactivity or withdrawal fees. It only charges a 0.01% annual custody fee.
That said, Revolut does have a limit of free trades that depends on the account type:
- The Standard account is free and includes 3 free stock trades per month.
- The Premium account costs 9.99 USD per month and includes 8 free stock trades monthly.
- The Metal account costs 14.99 USD per month and allows you to make an unlimited number of free stock trades.
Once you have exceeded your free monthly limit, each trade will cost 1 GBP, or its equivalent in your base currency. Additionally, Revolut provides cryptos from the Bitstamp crypto exchange and charges a 1.5% markup on the cryptocurrencies' bid or ask price.
Gold (XAU) can now be traded with Premium and Metal accounts if you add an XAU account through the Commodities widget. The product's costs are derived from the XAU market with a 0.25% markup by Revolut during market hours and a 1% markup during non-market hours.
Markets & products - (2/5)
As Revolut focuses on novice traders, its market and product offering can be regarded as comparatively narrow. Revolut has a limited product portfolio, it’s possible to trade only 850 US stocks listed on the two US stock exchanges - NASDAQ and NYSE, as well as cryptos and gold. It lacks other popular asset classes like mutual funds, bonds, futures or options. In contrast, a great feature at Revolut is the possibility to buy fractional shares. This means that instead of buying a whole share, you can buy only a smaller fraction of it - a handy feature for stocks that cost several hundred dollars apiece. Investors may expect that Revolut will expand its portfolio expansion in the near future adding the UK and EU stocks - and ETFs.
Advanced trading platform - (1/5)
The well-defined focus on novice traders becomes most apparent when it comes to available platform editions. Revolut doesn’t have a desktop or web based version, it’s only available as a mobile app.
Innovative account opening - (3/5)
In order to open an account with Revolut trading, the client is required to have a Revolut payment services account. There is no minimum deposit requirement to start trading.
Revolut has three account types: Standard, Premium and Metal. All three account types offer commission-free trading. The difference among them lies mainly in the amount of monthly free stock trades they offer: three, eight and unlimited, respectively. The account verification process for new clients usually takes up to one business day. The procedure is comparatively straight-forward. You need to download the app and create a Revolut account. Afterwards, you need to go to "Dashboard," click "Trading" and add personal information such as nationality and tax number. Continue by answering a few questions about your employment status, annual income and investment objectives. Finish by accepting User and Market Data agreements.
Customer service - (2/5)
It is possible to contact Revolut via chatbot, live chat and phone. There is also a well-structured and well-rounded FAQ. The chatbot can provide answers to the most frequent questions. The phone support is quick to respond, however, it offers only pre-recorded answers. Whereas one would normally turn to e-mail to resolve complex questions, this option is not available at Revolut.
Education - (1/5)
The most confusing aspect is the lack of an educational offering. For a platform that focuses on novice traders, the presence of an advanced learning platform / demo account / how-to videos and so forth is mandatory. Sadly, there are none of the above available at Revolut.
Mobile trading / Apps - (4/5)
Revolut's app is its sole technological platform for trading. It is highly convenient and it is Revolut's proprietary platform. You can log into Revolut's platform by typing a four-digit passcode or use TouchID on compatible devices. The platform's search functions are easy to use. Just begin to type an asset's name or ticker to view relevant hits. On the downside, the app lacks asset categorization. As of August 2020, new order types have been introduced, such as a limit order, stop loss and out-of-hours orders. What’s more, the app comes with a price alert function that lets you know whenever the price of an instrument surpasses or drops below a pre-set level.
UI / UX - (3/5)
Revolut's mobile app is very user-friendly as it offers an advanced search function. Similarly to other mobile-first services, Revolut offers a great interface catering mostly to the average user. It's available in 24 languages. You can learn how to use the platform in just a couple of minutes.
Digital security - (3/5)
Revolut is regulated by the US Securities and Exchange Commission (SEC), the US Financial Industry Regulatory Authority (FINRA) and the UK Financial Conduct Authority (FCA). The mobile app requires clients to use a four-digit passcode or TouchID. Revolut transmits client orders to DriveWealth LLC, a company that provides the trading platform and services for Revolut Trading. Sometimes Revolut refers to them as "Third Party Broker." This company falls under US federal regulation by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). DriveWealth is the custodian of the assets of trading customers who are protected up to $500,000 (including up to $250,000 cash) under the Securities Investment Protection Corporation's (SIPC) insurance. In the UK, your funds will be secured with the FSCS protection up to 85,000 GBP.
One of the company's most recent advancements is its position vis-a-vis cryptocurrencies. Starting April 2020, Revolut extended the availability of cryptocurrencies to Standard accounts as well. Revolut offers Bitcoin, Ethereum, Bitcoin Cash, Ripple, Stellar Lumens and Litecoin cryptos. The offering is not the most comprehensive in the industry, yet it’s a decent start for novice traders.