Revolut’s six-figure user base in Australia after it launched in August last year comes despite international borders being closed; much of its international growth has come off cheaper offshore spending via fee-free currency exchange and offshore ATM withdrawals, and it expects the Australian user base to lift when travel returns.

Revolut’s subscription model, like Netflix or Apple’s services, contrasts with banks which earn from customer fees and net interest margins. Revolut has three levels of subscription: standard, premium and “metal”. The latter, which provides users with an 18 gram reinforced steel card and features such as cashback offers, costs $25 a month.

Revolut Australia CEO Matt Baxby: “Customers don’t confine us to purely an offering of banking-style products.” 

Matt Baxby, CEO of Revolut Australia, said customer engagement was the core metric for measuring performance and crypto and trading would result in customers coming to the app more often, driving some users to the subscription plans.

In trading, standard and premium customers will receive a monthly allowance of commission-free trades, while metal customers will be able to trade commission-free.

“Our experience on other markets is customers transition through to paid plans if you can demonstrate value,” he said. “This contrasts to big bank business models, which are more reliant on apathy. They are ‘set and forget’ on a mortgage, get repriced over the years and rely on people not shopping around.”

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Prominent global investors are backing Revolut’s expansion. Tiger Global, a large investor in Afterpay, led a $US800 million round in July that was also supported by Softbank, valuing Revolut at $US33 billion, up six times on a year earlier. Tiger Global is also an investor in Stake.

In the US, Revolut is joining the race to build a financial “super app”, where competition includes PayPal and Square, whose $39 billion takeover of Afterpay is partly driven by a desire to add more retailing and credit features for its 90 million US users.

The super app moves in the US are a few years behind China, where Ant Financial and WeChat built full-service apps that hold numerous features in one place, a strategy that being adopted by Paytm in India.

Entire financial life

In Australia, Afterpay is preparing to launch Afterpay Money to expand its feature set, including deposits, while Zip said last month it was pushing into crypto, as apps initially created for one purpose look to add features to lure users back more often.

“We have a vision to build the world’s first truly global open banking platform, and we do that by creating this financial super app that lets you manage your entire financial life in one place,” Mr Baxby said.

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“Customers don’t confine us to purely an offering of banking-style products. They are open to adjacency, like exposure to commodities, crypto and, over time, a bank account or some credit product. That is a natural extension of managing their financial life, spreading payments over time.”

The Australian Securities and Investments Commission allowed Revolut to amend its AFSL to allow share trading, and it plans to bring Australian equities and ETFs on to the menu in the coming years. Revolut is regulated as a “stored value facility” and funds stored in its digital wallet are not guaranteed like bank deposits.

Prudential standards

Mr Baxby, the former retail boss and CFO of Bank of Queensland, said Revolut’s UK leadership team was committed to operating under strict prudential standards including holding regulatory capital in Australia to back any licence if it was awarded, and APRA approval would help it lift trust with users. The APRA application was formally submitted last month.

There is recent precedent for APRA approving a London-based unicorn for a licence: it granted Wise a restricted licence last month, allowing it to directly access the payment system without needing to use a local wholesale bank.

Revolut does not disclose users of particular Revolut features, but Mr Baxby said, “we have seen really strong uptake of crypto”. Fintechs enabling crypto investment contrasts with banks, which have been refusing to even provide banking services to crypto companies in Australia, due to the absence of regulation and fears of triggering anti-money-laundering liabilities.

The Senate select committee on Australia as a financial and technology centre will release a report this month expected to recommend a new licensing regime for cryptocurrencies.

“Australia has a real opportunity to be a leader in crypto and, with the right kind of licensing and regulatory settings, that is achievable,” Mr Baxby said.

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