Revolut applies for UK banking license

It’s hard to believe that fintech startup Revolut doesn’t have a proper banking license in its home country. But this is about to change, as the company has applied for a banking license in the U.K. Up next, the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) are going to look at the application.

Revolut  already has a banking license in the European Union. The Bank of Lithuania has granted a license and the company is taking advantage of European passporting rules to operate in other European countries.

It is slowly starting to offer its own banking products in Europe. Revolut is testing a credit offer in two European markets.

Revolut dubs itself as a financial super app. After you create an account, you get an e-wallet and a debit card. You can send and receive money, hold money in your account and use your card for in-store and online purchases.

Over the past few years, Revolut has greatly expanded beyond that simple premise. You can buy cryptocurrencies, stocks and commodities. You can set money aside in a vault. You can get travel and mobile phone insurance products.

Some of these features have been developed in-house. Other features have required partnerships with other fintech companies. While you can do a lot of things with your Revolut account, it’s still not technically a bank in the U.K.

It has been great when it comes to growth, but it can be limiting when it comes to revenue opportunities and product offering. If Revolut gets a banking license, the company will be able to offer full-service current accounts with overdrafts and loans in the U.K. Revolut could also offer credit cards.

Customers will also be protected under the Financial Services Compensation Scheme (FSCS). If Revolut becomes a bank and disappears, customers are protected up to £85,000 per person.

Revolut currently has 13 million customers and a valuation of $5.5 billion. While the company doesn’t break down its user base based on markets, the U.K. represents one of the most important markets for the company.