Revolut Launches in India: A New Era for Cross-Border Payments

Overview of Revolut’s Entry into the Indian Market

British fintech company Revolut is making its debut in India, aiming to revolutionize the cross-border payments sector, which it considers significantly underserved. According to company estimates, Indian citizens spend approximately $30 billion each year on international transactions, incurring about $600 million in bank fees—charges that Paroma Chatterjee, CEO of Revolut India, describes as “criminal.”

Identifying Gaps in the Indian Financial Landscape

Chatterjee emphasized that traditional banks have long dominated currency exchange and foreign payment services, resulting in exorbitant fees. “Customers typically rely on their banks for currency exchange, obtaining travel cards that come with hefty charges,” she stated in an interview with TechCrunch. With the aim of addressing these challenges, Revolut has been preparing for its India launch since 2021.

Strategic Acquisitions and Licenses

Revolut’s strategy included acquiring Arvog Forex in 2022, allowing them to obtain a license for remittance and multi-currency account services. Additionally, in April 2023, the company secured a prepaid payment instrument (PPI) license from the Reserve Bank of India. This license enables Revolut to issue prepaid cards, support digital wallets, and integrate with the Unified Payments Interface (UPI), further solidifying its presence in the Indian market.

Target Audience and Growth Ambitions

Revolut is targeting over 150 million digitally savvy and globally aspiring Indians aged 25 to 45. The fintech aims to onboard approximately 20 million users by 2030 while aiming to process at least $7 billion in transactions. As Chatterjee explained, the new regulatory permissions allow for a more unique customer experience compared to competitors reliant on bank partnerships.

Product Offerings in India

Revolut plans to introduce a comprehensive suite of services, including:

• Prepaid Wallet: Featuring UPI support and branded UPI handles.
• Domestic and International Visa Cards: Both a domestic card for local use and a multi-currency international card.
• Children’s and Teen Accounts: Linked to parental profiles for better financial education.
• Subscription Model: Offering budgeting tools and analytics to provide insights into spending behavior.

The startup also holds necessary approvals for domestic and international transactions, including same-day remittance services through local bank partnerships.

Compliance and Customer Verification

Unlike many Indian fintech platforms that utilize minimal Know Your Customer (KYC) checks for quicker onboarding, Revolut will implement full KYC processes. New users will be validated against international sanctions lists from agencies such as the Office of Foreign Assets Control and the United Nations. Chatterjee noted that this approach is designed to attract more engaged customers who are invested in using their services.

Measuring Success Beyond User Numbers

Chatterjee rejects the notion that mere download numbers should be seen as a success metric. “In India, curiosity often drives app downloads, but our focus is on engagement and profitability,” she stated. With a user base of 65 million customers across 39 countries, Revolut is adept at balancing customer growth with transactional value, processing over $4 billion and generating substantial profits.

Launch Plans and Competition Ahead

Currently, Revolut has built a waitlist exceeding 350,000 prospective users in India. The company’s plan is to onboard these users swiftly before opening the app to the broader audience, contingent on the completion of KYC and anti-money laundering (AML) checks.

With an initial investment of $45 million dedicated to establishing its operations in India, Revolut has localized its tech infrastructure to comply with Indian data sovereignty laws. Chatterjee mentioned that about 3,500 of Revolut’s global workforce of 10,000 is already based in India, making it the company’s largest location.

While Revolut’s entry into the Indian market is promising, it will face stiff competition from established players in the remittance and cross-border payment sectors, including Niyo, Scapia, Fi, and BookMyForex.

Conclusion

Revolut’s launch in India marks a significant development in the fintech landscape, particularly in cross-border payments. By leveraging regulatory approvals and offering innovative products tailored to the Indian market, Revolut aims to transform financial services and provide a competitive alternative to traditional banking practices.