Revolut’s conditional approval for a US banking licence has been hailed as a “consequential” step in the fintech’s march towards a long-awaited public debut.
The digital bank landed approval from the Office of the Comptroller of the Currency (OCC) for its American national bank charter last week, clearing a major hurdle to launch its operations across the US.
The firm’s entry to the world’s largest-banking market comes after several of its peers failed to win approval from the watchdog or abandoned their plans. In the span of a fortnight, the OCC blocked bids from both money transfer firm Wise and Europe’s second largest neobank, Bunq. Monzo also confirmed this year it was ditching its operations in the US to turn its attention to Europe.
But Revolut has kept its global ambitions as it targets 100m customers by mid-2027.
“Direct deposit taking, lending and card issuance in the US remove the sponsor-bank drag on unit economics and materially strengthens the pre-IPO story,” Tomasz Noetzel, analyst at Bloomberg Intelligence, said.
Denis McGoldrick, head of financials research at Goodbody said the approval was a “notable step forward in its international ambitions” and “reinforces growing confidence in the group’s long-term growth prospects”.
After finally securing its full UK banking permit in March following a four year wait, Revolut’s international momentum accelerated with a string of new licence approvals.
This included authorisations in Australia in July and a fresh permit from the European Central Bank through its French operations.
Revolut began its second bid for the US licence in March after a previous attempt at the state-level in March 2021 through Californian regulators. The initial effort ultimately stalled and was withdrawn by late 2023 following years of regulatory friction, including a staggering $20m loss due to a flaw in its US payment system and concerns over its internal financial controls.
The recent wins are expected to solidify the firm’s ballooning valuation. It is currently undergoing a secondary share sale that could fetch it a $115bn price tag.
“Revolut’s conditional approval to operate as a national bank in the US is a consequential regulatory win,” Noetzel said.
Speculation had risen last year that the firm might seek to purchase a fully-fledged US bank as a way to capture the licence instead of going through the application process.
McGoldrick said the “real challenge” for the firm ahead was building trust.
He added: “While regulatory approvals are important endorsements, convincing customers to entrust Revolut with their salary, savings, mortgage and broader financial lives remains the key hurdle if it is to make the leap from highly successful fintech to genuinely mainstream bank.”