Revolut Scraps Merger Strategy, Pivots to Direct U.S. Banking License Application
Revolut just ripped up its playbook. The fintech giant is ditching a planned merger—its shortcut to a U.S. banking charter—and going straight for a de novo license application. It's a high-stakes, all-or-nothing move.
The Long Game Over the Quick Win
Forget backdoor deals and regulatory workarounds. Revolut is now betting on the traditional, grueling path: building a standalone U.S. bank from the ground up, under the microscope of the OCC and FDIC. This isn't just a pivot; it's a statement of intent. They're not looking to piggyback—they're looking to build.
Why the Hard Road?
The calculus is clear. A de novo license, while slower and more expensive, offers ultimate control. No legacy systems to untangle, no cultural mergers to manage—just a clean slate designed for a digital age. In a sector where moving fast and breaking things is often punished, Revolut is opting for the marathon, not the sprint. It's a rare moment of patience in an industry addicted to hype cycles.
The U.S. Chessboard
This move throws down the gauntlet to both Wall Street incumbents and neobank rivals. Success would give Revolut a formidable transatlantic platform with full banking powers. Failure? A costly lesson in American regulatory reality. They're essentially telling U.S. regulators: 'We'll play by your rules, but we're rewriting the game.' A bold strategy, especially when you consider that traditional banks still view fintechs as overfunded apps playing dress-up in suits.
One thing's for sure: the battle for the future of U.S. retail banking just got a lot more interesting. Revolut isn't knocking on the door anymore—it's bringing its own tools to build a new one.
Revolut concludes that the acquisition could be tricky
Apparently, the Revolut team made a U-turn on the acquisition after concluding that a takeover would be tricky if it had to keep bricks-and-mortar branches open. An acquisition would also require the fintech to engage with U.S. regulators, who would need to approve changes to the targeted lender’s ownership.
Meanwhile, Revolut believes that the U.S. has a more expansive traditional banking sector and a large number of wealthy consumers that UK-based banks seek to tap into.
The decision comes as British fintechs reportedly set their sights on the U.S. as a potential market for growth amid a significant slowdown in consumer growth in the home market. However, applying for a national charter through the OCC can sometimes take years to get approval.
On the other hand, the TRUMP administration has revoked a Biden-era OCC rule that imposed strict oversight of bank mergers.
Fintech executives are now saying that they have noticed a change in the OCC’s attitude, and many are pushing their individual companies to apply for the bank charter. Law firm Freshfields’ data reveals that 14 applications were submitted to the OCC for a de novo charter to become a limited-purpose national trust bank, many from fintechs.
Revolut seeks a full banking license in Peru
Revolut is also looking to compete with some of Latin America’s fintechs, having recently applied for a full banking license in Peru. The license would allow the London-based company to roll out a range of localized services and products, offering Peruvians greater financial control.
Meanwhile, Peru is reportedly the fifth country in the region that Revolut has entered. The company has already won approvals in Mexico, Colombia, Brazil, and Argentina. On the other hand, SBS, Peru’s national banking regulator, says that the country has a highly concentrated financial system, with only four of the country’s largest banks accounting for over 82% of the total loans.
“Our main competitors are going to be incumbents, because there are no huge new players like Nubank or Mercado Pago…I see ourselves as a way to increase competition and improve the experience of the banked and unbanked population in Peru.”
–Julien Labrot, Peru Chief Executive Officer at Revolut
According to Labrot, Revolut offers notable remittance and multi-currency services, which give it a competitive edge in Peru. He also notes that approximately 1 million Peruvians live on remittances from overseas.
Meanwhile, the expansion is part of the company’s broader push to reach 100 million customers worldwide, a significant jump from the current 70 million. Revolut also hopes to generate over $100 billion in annual revenue as it continues to penetrate more global markets.
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