Revolut, the UK based fintech organization, has introduced crypto services for the platform’s users. This announcement comes shortly after an Italian bank announced support for Bitcoin trading. Understandably, firms servicing traditional financial markets are hungry for the massive fees generated on cryptocurrency trading.
On April 1, Revolut announced that regular users are allowed to use cryptocurrency accounts and trading services, and the platform will charge a 1.5% fee per crypto trade. The pandemic has created economic instability and as a result of this, the company has rolled out its services prior to schedule, in an effort to potentially capitalize on the surging volume in cryptocurrency trading.
In an e-mail announcement, Revolut mentioned that the COVID-19 had provoked economic turbulence. The firm warned its users, “we are starting to see quantitative easing and currency devaluation happening again right now.”
The firm further described:
“We had planned to make this official later this year, but in light of recent events, we’ve decided to give all Revolut customers the opportunity to explore different ways of diversifying, including through crypto, right now.”
Competition for Lucrative Crypto Trading Fees Heats Up
Revolut has emerged as a leader in Europe digital banking segment. From Revolut’s view, services for digital banking and acquiring Crypto go hand in hand as both appeal to a largely millennial audience, offering an easy means to cross-sell services to the same customer base.
Currently, Revolut is charging standard users a 1.5% fee, which is well beyond typical exchange rates. Even the hefty 0.5% charged by Coinbase is a noble rate compared to Revolut’s fees. Revolut may argue that it is stemming into a new segment, beyond its core stock trading services, but that argument fades given that Robinhood, another stock-focused app offers Crypto trading at no cost.
Given Revolut’s exorbitant fee, it’s likely to appeal to smaller purchases at which the 1.5% fee would not sting as much. However, in May, once the fee will increase to 2.5% for all standard consumers, it’d be surprising if Revolut manages to attract more than a meager share of the Crypto market.