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How Revolut intends to conquer Asia

The multi-currency fintech knows how to win affluent customers from traditional banks, but will Asian super-apps get in its way?



Revolut is not gunning yet for a banking license in Asia, but it is laying the foundations to do many things in Asia that banks do: offering current accounts, debit cards and insurance, with other activities to follow.

Jakub Zakrzewski, Singapore-based general manager for Asia Pacific, says Revolut had about 700,000 users when he joined in 2017, but in the year since that figure has grown to 3.5 million. These are primarily users in Europe and the U.K., but his aim is to grow at a similar rate in Asia; the firm will launch in Singapore, Japan and Australia this quarter.

Hong Kong and other markets are on the horizon; Revolut is seeking a Hong Kong stored-value facility license, which takes longer to obtain than a money-operating license in other markets.)

Zakrzewski was previously responsible for launching e-commerce site Lazada’s Singapore business, before the company was acquired by Alibaba. He also spent a short time launching Easy Ship in Hong, a logistics company for e-commerce, which exposed him to the city’s culture of poor banking service for small companies.

“What Lazada did with the retail business in Asia, Revolut will do in financial services,” he told DigFin.

Revolut did not begin as a bank. It started in Europe serving cross-border payments and services with a VISA- or Mastercard-branded card linked to a multi-currency account that lets people spend, send and exchange foreign currency on their phones at interbank rates. Today it has a banking license in Europe.

The user interface then encouraged people to use it as an ATM or payments app at home as well as when traveling. The company added things like pay-per-day insurance and, most recently, access to buying (but not trading) Bitcoin. This coming year, starting in the U.K., the firm will roll out commission-free stock trading (similar to America’s Robinhood).

Zakrzewski says he personally embodies the ideal target customer: cosmopolitan people who travel a lot. And Singapore and Hong Kong have a large population of affluent expatriates or people who regularly cross borders.

Revolut is also gearing up to offer a SME-focused service with multiple currency accounts, letting small businesses finance trade at interbank forex rates.

This isn’t Europe
In Asia and the Americas, though, the idea is not to offer the same product everywhere. “We want to build out a core product for retail users, and then localize,” Zakrzewski said, noting that big tech companies like Uber that don’t adapt to Southeast Asia often lose to local rivals such as Grab.

“In Singapore,” he said, “the consumer is used to having multiple credit cards. They’re mobile-first and financially savvy. We’re not trying to do everything with our initial offering” but he notes that loyalty programs are especially popular in the region. Revolut will launch in Singapore, Japan and Australia with a debit card linked to multi-currency accounts offering interbank FX rates, money transfer, travel insurance, and free ATM withdrawals.

Despite the proliferation of wallets and payment fintechs, such as TransferWise in the U.S., Zakrzewski argues that in Asia, Revolut’s focus on affluent expats will set it apart from the likes of Grab, which is more focused on the under-banked.

The competitive landscape in Asia is different, though. In Europe, Revolut competes with licensed challenger banks such as Monzo or N26. There’s no equivalent in Asia yet, although digital banks are about to appear in Hong Kong and Australia. Singapore is introducing new e-payments legislation that support Revolut’s business model but also open the door to competitors.

On the other hand, Asia has many “super-apps” that don’t exist in Europe, such as WeChat Pay, including some that have acquired bank licenses, such as Korea’s KakaoBank. WeChat Pay has worked with Western Union on limited cross-border capabilities.

Zakrzewski says Revolut doesn’t see these super-apps as competitors, noting they lack experience in areas such as no-fee foreign exchange. At some point Revolut might want to cooperate with them, but for the time being the company intends to go its own way.

It would also be a challenge to get these players to agree to step beyond their own ecosystems.

Revolut will focus on attracting consumers and SMEs with its own services. “How do we get [users] into our app – what problems can we solve for them?” Zakrzewski said. “We believe better customer experience is much needed given the level of service many banks provide.”

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