Revolut applies for NZ banking licence as it seeks to challenge banks’ savings and lending products

One-stop-shop money app Revolut wants to offer banking services on its own, without partnering with a bank.

Financial technology firm Revolut is eyeing a New Zealand expansion, applying to the Reserve Bank to become a registered bank.

The one-stop-shop money app, popular in Europe and the United Kingdom, says a banking licence would enable it to offer interest-bearing savings products, credit cards, consumer loans and mortgages.

The requirements the London-based firm would need to meet to get the coveted licence would also give Revolut legitimacy to support its growth.

“It brings with it an element of trust with consumers,” Revolut chief executive for Australia and New Zealand Matt Baxby told the Herald.

“They know we’re being held to the highest regulatory standards.”

Revolut has been expanding its offering to Kiwis, having added 18 products and features to its local platform since launching here in July last year.

It offers payment, money transfer and foreign exchange services, and precious metal and cryptocurrency trading platforms.

Positioning itself as a challenger to traditional banks, Revolut also offers budgeting and educational tools, and innovative products like a debit card number you can use to make a one-off payment if you’re worried about handing over your credit card details to an online merchant.

Revolut head of New Zealand Georgia Grange wouldn’t disclose how many users Revolut had in New Zealand, but said it had processed $350 million since July 2023.

She explained Revolut could legally take deposits from consumers and issue loans without a banking licence if it partnered with a traditional bank.

“However, our ambition is to really stand on our own two feet, and we’re here to try to shake things up with the traditional banks as well,” she said.

Grange hoped banks would be forced to innovate more in the face of competition from financial technology firms like Revolut.

Revolut is the first financial technology firm to apply to the Reserve Bank to become a bank.

A Reserve Bank spokesman said the regulator had received a further 11 enquiries from parties interested in becoming banks in the past 18 months.

The bar to becoming a bank is regarded as being very high, with those acquiring banking licences typically already being Reserve Bank-licensed non-bank deposit takers, or big overseas banks, rather than financial technology firms or newcomers.

One of the requirements those applying for bank licences need to meet is they need to have at least $30m of capital.

The Reserve Bank has the power to lower this threshold, should it wish, without a law change.

However, it’s looking at the issue as it modernises the way it regulates deposit takers under the new Deposit Takers Act.

It’s been consulting on lowering the amount of capital smaller firms (with less than $2 billion in assets) must hold to become a bank to between $5m and $10m.

The Reserve Bank spokesman couldn’t say what the outcome of the review would be.

“In the meantime, we have no plans to amend the current $30m minimum capital level,” he said.

The Deposit Takers Act is due to take effect in 2028.

Revolut has banking licenses in the European Union and United Kingdom, and has applied for one in Australia.

Jenée Tibshraeny is the Herald’s Wellington business editor, based in the Parliamentary press gallery. She specialises in Government and Reserve Bank policymaking, economics and banking.