Connect with us


British digital banking app Revolut launches U.S. stock trading

British digital banking app Revolut launches U.S. stock trading 1

By Hannah Lang

(Reuters) – Britain-based digital banking app Revolut launched commission-free stock trading in the United States on Wednesday, a move that will see it compete with online brokerages such as Robinhood Markets Inc and Charles Schwab Corp.

The launch by Revolut comes amid a broader surge in retail trading, which escalated last year when investors latched onto so-called “meme stocks” that included retailer GameStop and cinema group AMC Entertainment.

U.S. retail traders bought approximately $281 billion worth of stocks in 2021, up from $38 billion in 2019, according to Vanda Research.

The new offering is part of Revolut’s quest to become a so-called “superapp,” where consumers can manage every aspect of their finances, the company said. Revolut also offers payments services, cryptocurrency trading and savings accounts.

“This to us was just the next logical step,” said Gabe Vallejo, Revolut’s U.S. head of wealth and trading.

U.S. Revolut customers can trade full and fractional shares of more than 1,100 securities listed on the New York Stock Exchange and Nasdaq, including more than 200 exchange-traded funds.

Zero-commission stock trading is already available to Revolut users in the United Kingdom and Europe. The company was valued at about $33 billion through an investment round in July, and is currently Britain’s second-most valuable fintech company after

Revolut launched in the United States as a banking app in March 2020, and secured a U.S. broker-dealer license in September 2021.

Similar to Robinhood, Revolut will rely on payment for order flow (PFOF) to earn revenue through its commission-free trades, a controversial practice in which brokers route trades to market makers in return for a fee.

The Securities and Exchange Commission is currently considering whether to reform or ban the practice. Chair Gary Gensler has expressed concern that commission-free trading brokerages may encourage investors to trade more, in order to capture more PFOF, even if that is not in the investors’ best interest.

Vallejo said Revolut is not concerned about the SEC review and he expected Revolut will be able to evolve as necessary should the rules change.

“We’re confident we can continue to offer this product to our customers in the most efficient manner possible,” he said.

(Reporting by Hannah Lang in Washington; editing by Michelle Price and Richard Pullin)

Editorial & Advertiser disclosure
Our website provides you with information, news, press releases, Opinion and advertorials on various financial products and services. This is not to be considered as financial advice and should be considered only for information purposes. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third party websites, affiliate sales networks, and may link to our advertising partners websites. Though we are tied up with various advertising and affiliate networks, this does not affect our analysis or opinion. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you, or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish sponsored articles or links, you may consider all articles or links hosted on our site as a partner endorsed link.
Global Banking and Finance Review Awards Nominations 2022
2022 Awards now open. Click Here to Nominate


Newsletters with Secrets & Analysis. Subscribe Now