Revolut has struck a deal with Mastercard that will see the US giant handle the fast-growing digital bank’s credit card business when it first launches in America.
The agreement with British-based Revolut also means Mastercard will handle “a minimum of 50 per cent of all existing and future cards Revolut issue in Europe”.
Loss-making Revoult is adding more customers than almost any other fintech in Europe, growing its base to more than 7 million customers since it was launched in 2015.
This deal comes less than a month since the fintech struck a deal with Visa, which it said would allow it to add a further 3,500 staff and expand in up to 24 new countries.
Revolut’s deal with Mastercard, announced today, allows the fintech to “offer financial services to consumers in the US by the end of the year”.
It added its expansion plans are to reach markets in Asia Pacific and Latin America such as: Australia, Singapore, Japan, New Zealand, Brazil and Mexico, without giving a timeframe.
Revolut co-founder and chief executive Nik Storonsky (pictured) said: “As a launch partner of Revolut, Mastercard has been an important contributor to our success, and today’s agreement will enable us to meet our ambitious goal of offering innovative financial and payment solutions to people all over the world.”
Mastercard chief product officer Michael Miebach added: “Revolut’s success and its speed to new markets, such as the US, is welcome proof of our commitment to tailoring support for fintechs.”
Revolut’s Storonsky said last month that the business plans to grow from 1,500 staff currently, to around 5,000 next summer to support its growth plans. He added the start-up could double or triple its customer base over the next 12 months.
Battling with high street banks
Revolut, along with rivals such as Germany’s N26 and Britain’s Monzo have amassed millions of customers in recent years who are attracted to their slicker apps, money management tools and lower offers on foreign exchange.
This has left high street banks to race to upgrade their services, or, buy fintech rivals to keep hold of their large customer bases.
However, few of these fintechs turn a profit. Revolut’s most recent accounts showed losses more than doubled to £32.8m in 2018 from £14.8m a year ago.
Revolut’s Storonsky said last month the average customer holds around 1000 euros in their account, giving a total deposit balance of around 8bn euros. This compares to the with trillion-dollar-plus deposit totals held by traditional rivals such as Britain’s HSBC or America’s JPMorgan.
Fintechs have raised billions from investors who are betting these firms will grow as big as BigTech giants such as Facebook and Google. So far, Revolut has raised around $340m from venture capital firms such as Index Ventures, Ribbit Capital, Balderton Capital and DST Global.