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Revolut eyes ad revenue amid license delay

Wednesday 24 April 2024 12:16 CET | News

Revolut, a prominent fintech firm headquartered in London, is considering strategies to capitalize on customer data by potentially sharing it with advertising partners.

 

This initiative arises amidst the company's pursuit of additional revenue streams, particularly as it faces uncertainties surrounding its application for a UK banking license.

According to Revolut's head of growth, the company envisions leveraging its platform as a medium for targeted advertising, potentially evolving into a media-oriented business model. They highlighted the wealth of user data available to Revolut, including insights into user behaviour within the app and their interests based on interactions.

To spearhead this endeavour, Revolut has brought on formerof TikTok experts to lead a sales team focused on executing this media strategy. Sources familiar with the matter suggest that the company has set internal revenue targets from advertising, aiming for approximately GBP 300 million by 2026. However, Revolut has refrained from commenting on these targets.

Revolut, a prominent fintech firm headquartered in London, is considering strategies to capitalize on customer data by potentially sharing it with advertising partners.

 

Despite a substantial valuation of USD 33 billion secured in a funding round led by SoftBank in 2021, investor sentiment towards Revolut has fluctuated, with some downward revisions in valuation estimates. The company faces the challenge of demonstrating sustainable profitability, particularly following a pre-tax loss of GBP 25 million in 2022, contrasting with a profit of GBP 40 million the previous year largely attributed to cryptocurrency trading.

Industry experts suggest that Revolut may need to expand its services, potentially venturing into lending, to establish a more substantial and enduring revenue stream. However, the delay in securing a UK banking license has hindered its ability to pursue such endeavours effectively.

Despite these challenges, Revolut remains optimistic about the potential of its advertising-driven revenue model, noting increasing interest from potential partners and advertisers. Representatives emphasize the importance of enhancing user engagement with the app, envisioning Revolut as an integral part of users' daily routines alongside platforms like Instagram and email.

In addition to exploring advertising revenue, Revolut has diversified its offerings beyond traditional banking services, introducing products such as a mobile phone e-SIM for travellers and generating revenue through various channels including payments, subscriptions, foreign exchange, and its wealth division, which includes cryptocurrency trading.

Obtaining the license in India

The fintech company has recently secured preliminary authorization from the Reserve Bank of India (RBI) to issue Prepaid Payment Instruments (PPI) in the country. This authorization allows Revolut to offer PPI services, including prepaid cards and wallets, within India, positioning the company as a domestic player in the market.

This development builds upon Revolut's existing licenses in India, where the company has previously obtained approval from the RBI to operate as a Category-II Authorized Money Exchange Dealer (AD II), enabling it to provide multi-currency forex cards and cross-border remittance services.

With the PPI license in hand, Revolut expands its reach across India, offering customers both international and domestic payment solutions through a single platform. The company's overarching goal is to democratize access to digital financial services and enhance financial inclusion globally. In line with this mission, Revolut aims to introduce a range of digital-first money management solutions tailored for Indian customers. These solutions will provide users with a simplified, convenient, and secure experience for managing their finances, including payments and remittances, both domestically and internationally.


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Keywords: prepaid card, authorisation rate, banking license, financial inclusion, mobile banking
Categories: Banking & Fintech
Companies: Revolut
Countries: United Kingdom
This article is part of category

Banking & Fintech

Revolut

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