Revolut received its prepaid payment instrument (PPI) licence from the Reserve Bank Of India to offer prepaid cards and prepaid wallets with UPI payments and is set to launch its offerings in October this year
Founded in 2015 by Nik Storonsky and Vlad Yatsenko, Revolut started as a forex payments platform, but later morphed into a fintech super app. In India, the London-based company will venture into the instant international payments and UPI space
The British neobank claims that it has already acquired 300K Indian users as part of its pre-enrollment waiting list. Going forward, Revolut is looking to add 25 Mn Indian users to its kitty by 2030
Europe’s largest neobank Revolut created a buzz when it announced its Indian foray in 2021. At the time, it was touted as a potential competitor to some of the biggest fintech players in the country.
While the progress was slow, the company now seems to have firmed up its India plans. Last month, the neobank received a prepaid payment instrument (PPI) licence from the Reserve Bank Of India (RBI) to offer prepaid cards and prepaid wallets with UPI payments. On the back of this, the company is now gearing up to launch its suite of offerings in the country.
Speaking with Inc42, Revolut India’s CEO Paroma Chatterjee said that the London-based fintech is all set to launch its range of products by October this year.
“The official timeline for launching the products is October 5 and we are doubling down our efforts to introduce our services in the Indian market,” she said.
Before we dive into the company’s India plans, let’s take a quick look at Revolut’s background. Founded in 2015 by Nik Storonsky and Vlad Yatsenko, Revolut started as a forex payments platform, but later morphed into a fintech super app that offers digital banking services, crypto trading, travel bookings, card payments and insurance in the UK, Spain, France, the US, Brazil, among others.
It claims to have a presence in 160 countries and posted a consolidated net profit of $1 Bn for the year ended December 31, 2024. As per reports, the London-based company is on its way to become a digital bank as it received a banking licence in England last year.
Having garnered a healthy chunk of the European market, the company has now set its sights on the Indian market. But, what aces does Revolut have up its sleeves to carve a niche in the country and mount an effective challenge to local fintech giants?
Revolut’s International & Domestic Payments Combo
When the Tiger Global-backed startup set foot on the Indian shores in 2021, it earmarked nearly $45 Mn (about INR 300 Cr) for its local expansion plans, hired about 300 employees and appointed Chatterjee as the CEO to kickstart its operations in the country.
Chatterjee, an alumna of IIM Lucknow, previous held leadership positions at companies across the fintech spectrum like Lendingkart, Airtel Money, ICICI Bank, Kotak Mahindra Bank, among others.
A year later in 2022, Revolut India bought forex platform Arvog Forex to acquire the latter’s Authorised Dealers (AD) Category II licence and mark its foray into the Indian forex payment space. The AD Category II licence allows holders to issue forex pre-paid cards to residents travelling abroad, subject to KYC norms.
Revolut India saw a huge gap in the international payments space in the country. Students and professionals living abroad struggle with high markup rates (between 1.5% to 5%) and long processing times for international payments, said Chatterjee. “It almost takes three to four days to receive forex payments. What if someone needs money for a medical emergency?” she questioned.
To cater to this segment, Revolut now plans to launch international payment offerings, including instant international transfers via its mobile app and multi-currency prepaid cards for international travellers in India.
While Chatterjee refused to disclose the quantum of markup fee the company would charge from its India users, Revolut currently charges zero fees for international transfers in some parts of Europe and under its “ultra membership” plans.
The company plans to supplement its international money transfer offerings with UPI payments to make its app an “everyday use platform” for Indian customers. Chatterjee said that the company will introduce UPI transfers, QR-based UPI payments, digital wallets and prepaid cards to further bolster app usage.
But, how does Revolut plan to take on the incumbents in the Indian fintech space?
Taking On The Giants
Chatterjee believes that there are two kinds of fintech players in India – online aggregators, which merely partner with banks, and others who procure all the necessary licences and build products in-house. The company plans to take the latter route and considers Indian banks as its competitor.
Revolut India’s CEO said that owning licences and then building products in-house will help the company have more control over customer experience and carve a more sustainable business model.
“We decided to choose the other route aligning with our global strategy,” added Chatterjee. While the aforementioned strategy has worked for the company in Europe, it would be interesting to see if this gameplan holds the ground against Indian fintechs players.
What works for Revolut is that there are hardly any homegrown fintech players in the peer-to-peer (P2P) cross border payments space in India as most of the fintechs merely facilitate B2B international transactions.
But, there are a handful of global players, like Paypal and Wise, as well as public and private sector banks in the Indian international payments space, which is projected to become a $290 Tn opportunity by 2030.
However, the challenge lies in the thriving domestic payments space. The trio of Walmart-owned PhonePe, Google Pay and Paytm continue to rule the UPI charts with an iron grip, with the three players cumulatively accounting for 92% market share in 2024.
With UPI a key piece of the puzzle for Revolut to ensure user stickiness, it would be interesting to see how the London-based neobank stacks up against homegrown giants. The company is counting on its global network and expertise to scale up its app in India and claims to be already seeing healthy traction.
The British neobank claims that it has already acquired 300K Indian users as part of its pre-enrollment waiting list. Going forward, Revolut is looking to add 25 Mn Indian users to its kitty by 2030.
At the heart of Revolut’s India expansion plans is India’s growing fintech space, which has attracted more than $25.8 Bn in investments and boasts 22 unicorns and 33 soonicorns. As per Inc42 data, the total addressable market for fintech in India is expected to reach a size of $2.1 Tn by 2030.
