London-headquartered challenger bank, Revolut is expanding its services in the United States and going to launch a commission-free stock trading service in the country.
According to a CNBC report on Tuesday, the fintech platform has already secured a broker-dealer license from the US Financial Industry Regulatory Authority (FINRA), for which it worked for 16 months.
Revolut will operate as an introducing broker and has partnered with New Jersey-based DriveWealth for clearing the trades, the company confirmed to the publication.
The fintech is already offering similar services in the European markets, but the model of its upcoming US services will be different. While the company keeps its distance from the controversial payment for order flow (PFOF) model in Europe, it will use the same for generating revenue in the US.
Interestingly, the PFOF model is currently under the scrutiny of the US financial market regulator, the Securities and Exchange Commission, but the leading zero-fee broker in the country, Robinhood, is still running its business under the model.
Riding on the Growing Retail Finance Demand
Revolut entered the US market last year as it is focusing on aggressive expansion. However, most of its revenue is still generated from its services in the United Kingdom.
“We are building a single app where people can manage all aspects of their finances, from banking and foreign exchange, to cryptocurrency and stock trading,” Revolut founder and CEO, Nik Storonsky said in a statement. “We’re eager to break down common barriers to entry around stock trading such as account minimums and complex interfaces.”
The status of Revolut as a challenger bank also made top investors open their pockets to the company. The fintech closed its latest funding round last July, raising $800 million and with a valuation of $33 billion.
Apart from the broker-dealer license, Revolut also applied for a banking charter in the United States to further expand its services in the country.
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