The spread of internet makes banks change the nature of their business, and the emergence of an environment where storage of financial assets or their exchange - the issue of technology, has paved the way for numerous start-ups. Not burdened by the infrastructure accumulated over many years and experience in traditional financial markets, new projects offer us a new financial world. Revolut is one such solution.
Revolut - justifies its name. Despite being young, the appearance of such a solution is akin to a full on revolution. It's just not quite obvious yet where it’s going. Total digitalization? Contactless payments? Disappearance of cash? Three years ago, "card services" worked in other segments, didn’t take advantage of online technologies. Plastic cards were offered as an interface to access a basic account.
The idea to take the market with an algorithm, is inherent to the technicians who understand that all processes can be automated. Any financial transaction can take place online, and therefore the main task is to perform them as efficiently and cheaply as possible. And that’s the path that the Revolut took. Assessing success after the fact is bad way of going about it. And the beautiful idea, and diligence of creators - all play a role. However, the main factor turns out to be decisive: Revolut appeared at the right time and in the right place.
The keyword here is the ‘transaction value’, no matter what the transaction is. The cost of the transaction, when exchanging currencies in the relevant item - also includes the salary of the one hidden behind the armored glass. Exchange some assets for others also has a market value. Money transfers is a lucrative business. Some industries live off what settles as the result.
Nowadays, access to the market can be obtained automatically. You throw one currency into the internet and you get another. The rate of the commission during an exchange is equivalent to the costs at which you make the given exchange. If you have a bank with stacks of paperwork - the commission is X, if 20 programmers, it becomes Y.
This is how Revolut started, offering cards through which it was possible to move money as a basic, and secondly to exchange currencies at a super-profitable rate. For those who live the world or travelling - this service is extremely useful.
Getting a plastic card was made possible through a partnership with Mastercard. Today the possibility of issuing plastic cards tied to full-fledged bank accounts is a standard service available for consumer oriented financial start-ups. Revolute managed to make the product not only interesting with its technical methods - but also beautiful in terms of their product. The card came by post in a nice package.
Now your money is managed by ‘it’ - some piece of hardware, with a nice interface. But by judging how common the the kettles are, it may not even have an interface. It decides on where to place and how to preserve the capital, selling additional services and simply provides for the financial wellbeing. Money and it’s management, completely switched to online, negating the need for intermediaries. Great Britain is threatening to become a non-cash nation soon, saying that not even the plastic cards are necessary. Pay with watches, smartphones or any of your other devices, take a pick.
It’s now difficult to surprize someone with a ‘cloud’ exchange of currencies. Revolut is often measured against Transferwise, which allows to make cheap payments around the world. The core difference is that Revolut appeared three years later. Timeliness and aggressive work with financial product line allowed the creators to bypass existing competitors, and leave fewer possibilities for those following them.
This kind of solution has already started appearing around the world, in the same UK, where Revolut comes from, projects such as Monzo - applications and cards, which in the future can replace banks, are flourishing. They do not yet offer additional services, but it's a matter of time. Now, when a banking license costs a little, and a convenient interface and a strong marketing campaign can work miracles - hundreds of similar projects a beginning to fuel the unicorn of the future.
To date, the company has attracted 336 million in investment and is valued at more than two billion dollars. The startup which now employs more than 300 programmers, has atracted numerous large investment funds. Every day Revolut receives 10 thousand new users and this is just the beginning. Effective exchange of currencies is just a lure and an opportunity to build on a base.
Next - are the traditional banking services. Shares Purchasing, savings management, cash-back services and finally, the cryptocurrencies. Support for the traditional set, already exists, albeit in an ‘intangible’ form. Revolut - does not have a fully-fledged crypto wallet, cryptocurrencies can be bought and sold - but not paid with. What is seen on the balance sheet is a virtual account, which is managed on the company's servers. This is done to please the regulators and to insure the risks. A full-fledged solution that would unite the fiat and cryptocurrency worlds is yet to come.
Revolut Metal card that promises cashback on any of the top 25 crypto’s is an excellent way to make a grand announcement, attract a following - that really needs this type of a product. But most importantly, it’s a way of solidifying a place in the new world, that shall never be the same again.