UK digital banking app Revolut launches US stock trading

By Hannah Lang

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

Revolut’s launch comes amid a broader retail wave, which escalated last year as investors clung to so-called “meme stocks,” including retailer GameStop and movie theater group AMC Entertainment.

U.S. retailers bought about $281 billion worth of stock 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 payment services, cryptocurrency trading and savings accounts.

“This was just the next logical step for us,” said Gabe Vallejo, head of wealth and commerce at Revolut in the US.

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

Commission-free stock trading is already available to Revolut users in the UK and Europe. The company was valued at around $33 billion in an investment round in July and is currently Britain’s second most valuable fintech company, after Checkout.com.

Revolut was launched in the United States in March 2020 as a banking app and received a US broker-dealer license in September 2021.

Like Robinhood, Revolut will rely on payment for order flow (PFOF) to generate revenue through its commission-free trades, a controversial practice in which brokers send trades to market makers in exchange for a fee.

The Securities and Exchange Commission is currently considering reforming or banning the practice. Chairman Gary Gensler has expressed concern that commission-free trading brokers may encourage investors to trade more to acquire more PFOF, even if it is not in the investor’s best interest.

Vallejo said Revolut is not concerned about the SEC’s assessment and that he expects Revolut to evolve as needed as the rules change.

“We are confident that we can continue to offer this product to our customers in the most efficient way,” he said.

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