Revolut abandons US bank takeover, pivots to licence

Revolut has shelved plans to buy a United States bank and is instead pursuing a fresh regulatory pathway as it recalibrates its long-delayed push into the world’s largest retail finance market. The London-based digital banking group has begun laying the groundwork for an application to the Office of the Comptroller of the Currency for a national banking licence, according to people familiar with the company’s strategy, marking a shift away from an acquisition-led entry.

The change of course comes after extended talks with advisers about acquiring a small, federally regulated lender to fast-track access to the US payments system and deposit insurance. Those discussions failed to reach a deal, amid concerns over valuation, legacy compliance risks and the operational complexity of integrating a traditional bank into Revolut’s technology-led model. Executives concluded that a clean-sheet approach offered greater control, even if it required a longer regulatory process.

Founded in 2015, Revolut has grown rapidly across Europe and parts of Asia-Pacific, offering app-based payments, savings, crypto trading and investment products to more than 40 million customers worldwide. Its US presence, launched in 2020, has been limited by the absence of a full banking licence, relying instead on partnerships to provide card issuing and custodial services. That structure constrained product depth and margins, particularly in lending and deposit-taking.

Revolut shifts US strategy toward federal licence

People close to the company say preparations are under way to strengthen governance and risk controls to meet US supervisory standards, including expanding compliance teams and appointing senior executives with domestic regulatory experience. A national bank charter would allow Revolut to hold customer deposits directly and connect to payment rails without intermediaries, but it would also subject the firm to intensive oversight and capital requirements.

The decision underscores the difficulties foreign fintechs face when attempting to enter the US market through acquisition. Smaller banks that fit a fintech’s balance sheet have become scarce, while regulators have grown more cautious about approving deals that transfer control to fast-growing technology firms. At the same time, the OCC has signalled a willingness to consider de novo bank applications, provided applicants demonstrate robust risk management and a sustainable business model.

Revolut’s leadership believes a licence application, while demanding, aligns better with its long-term ambitions. The company has spent the past two years strengthening internal controls after criticism from auditors and regulators in some markets over governance and reporting processes. Progress on those fronts has helped unlock expansion elsewhere, including the rollout of full banking services in several European countries.

Industry analysts note that the US represents both a prize and a proving ground. Competition is fierce, with entrenched banks, card networks and a crowded field of domestic fintechs fighting for customers. Yet the market’s scale offers significant upside for firms able to differentiate on price, user experience and product breadth. Revolut’s global brand and multi-currency capabilities could appeal to internationally mobile consumers and small businesses, but success will hinge on regulatory approval and trust-building.

The shift away from a takeover also reflects broader trends in fintech strategy. After a period when acquisitions were seen as shortcuts to scale, many digital lenders and payment firms are reassessing the risks of inheriting ageing systems and unresolved compliance issues. Applying for a licence allows regulators to assess a business from the ground up, though it requires patience and substantial upfront investment.

Revolut has not set a public timetable for submitting its OCC application. People briefed on the matter caution that the process can take years and outcomes are uncertain. The company is expected to continue operating its existing US products during the application period, with incremental enhancements through partnerships.

For investors, the move signals a preference for strategic clarity over speed. Revolut remains privately held, with a valuation that surged during the fintech boom and has since faced pressure as funding conditions tightened. Demonstrating a credible path to profitability in the US could bolster confidence ahead of any future public listing.