November 16, 2015
|By Consulting Group|
At Black Swan Partners we are passionate about new Fintech products and we also like to give credit where credit is due. This week a storm has been brewing in the Black Swan office, and it goes by the name of Revolut; a mobile app attempting to save your hard-earned cash from the peril of exchange rate fees.
How Does It Work?
Revolut is an smartphone app and a prepaid travel MasterCard that automatically exchanges your currency at the point of sale (Sterling, Dollar or Euro) into over 84 other currencies at the interbank rates – this means zero fees for the user.
How Much Does It Cost?
Revolut generates revenue through MasterCard’s cut on every transaction, so all other stages of the customer lifecycle (depositing, withdrawing, exchanging) are free of charge. The closest alternatives recommended by MoneySavingExpert are WeSwap; a p2p exchange site that matches with users in other countries – but they charge inactivity fees and ATM fees, or Fairfx, which charges €1.50 ATM fees abroad and the card must be loaded with at least €60.
We are so enthusiastic about this product, not just because of the price, but because the UI and UX are efficient, innovative and attractive. The account opening process is slick; I signed up via Facebook, verified my phone and ordered a Revolut card in a couple of minutes. To confirm my identity (for deposits of over £1,000) there was no scanning and sending off utility bills; instead, I took a photo of my driving license and then held up my phone whilst the app captured a picture of my face. I did have trouble making a first deposit so I used the instant messaging support to raise the issue which was swiftly sorted. After that I could instantly transfer funds via Whatsapp, sms and social media to other users. Revolut just stands out because every interaction between customer and product has been well thought through, and although there are still bugs to sort, it is not far off being an excellent all-round service.
Whether Revolut’s low-margin business model is sustainable remains to be seen; the Terms and Conditions only guarantee the current pricing structure for a users first year, which seems to acknowledge a degree of uncertainty. Colleagues at Black Swan have suggested the possibility of Revolut undertaking cross-selling in order to make the pricing more viable long-term. Whatever happens, I will be taking my Revolut card abroad this Christmas to see if it’s all I’ve cracked it up to be. Stay tuned.