Revolut, the London-based fintech start-up, has announced plans to launch commission-free stock trading.
Having already signed an impressive two million users, the company appears to have spotted a gap in the market – demystifying and simplifying stock trading for everyday consumers.
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The challenger bank has already won plaudits for its take on secure 21st century banking: alongside traditional savings and payments, Revolut’s users also benefit from no foreign spending fees and the ability to buy and exchange cryptocurrencies.
What is commission-free stock trading?
Soon, they’ll be adding commission-free stock trading. And it’s that term, ‘commission-free’, that’s drawing all the attention. If you want to get involved in trading today, you can expect to pay brokers a percentage every time you make a trade – and that can be costly, or even prohibitively expensive, for some. Challenger banks like Revolut, who seek to smash the traditional banking landscape, are well-placed to offer alternatives like this.
With their new ‘commission-free’ feature, Revolut is promising to do away with those fees, letting their customers easily trade stock within the banking app itself. In addition to offering tools, including exchange traded funds, once launched, users will gain the ability to study both UK and US companies list on the stock exchange – and, assuming they can afford it, invest in the businesses that take their fancy.
In a statement to the press, Nikolay Storonsky, Revolut’s CEO, said:
‘To put it bluntly, we are going to cause the same disruption in investments as we have done in banking. Brokers are charging people as much as £5.00 per trade and the user interfaces are typically clunky, slow and confusing for consumers. The pain points are clear for us and the room for improvement is massive.’
Revolut’s ambitious growth
The commission-free stock trading feature is just one part of the up and coming banking business’ aggressive growth strategy. Already dubbed a ‘unicorn’ – a start-up, in other words, that has reached a $1 billion valuation – according to Revolut’s own records, users make, on average, 100 million individual transactions, totalling $2 billion per month. And just last week it was revealed that Revolut partnered with Qiwi Bank to launch its popular app in Russia.
With a strong user base in both France and Poland, there are keen plans to take its banking app to the shores of Australia, New Zealand, Singapore, Hong Kong and Canada. It has applied to the FCA for European and Lithuanian banking licences. In the US, on the other hand, it’s far from plain sailing: the app’s launch has been shifted back to the Autumn.
The company ran into issues with financial regulations – news that will come as some relief to Revolut’s only real US rival, Robinhood, who already offers its US users zero fees on American stock trading and options, as well as cryptocurrencies.
But it’s the UK where Revolut has concentrated its efforts, and no surprise, given that the country is home to the company’s largest market, with 900,000 users. No surprise, then, that they’ve recently sought a UK banking licence. Industry insiders believe the UK is preparing to grant Revolut’s request in the space of a few months; a European licence is expected shortly afterwards.
