Nikolay Storonsky CEO & Founder of Revolut

Nikolay Storonsky, CEO
& Founder of Revolut.
Revolut

LONDON — International money exchange startup Revolut has become
to latest fintech to increase the fees it charges to customers.

Revolut announced in a
blog post on its website late last week that it is lowering
the cap for free ATM withdrawals on its cards from £500 a month
to £200 a month. Customers will be charged 2% for any withdrawals
above that monthly limit.

The startup, founded by a former Credit Suisse trader, is also
introducing a £5 charge for its cards and now charges £6 to
replace lost or stolen cards.

London-based Revolut offers a prepaid foreign exchange card
linked to an app. Users load money onto the card using the app
and then can spend it around the world, getting the best rate
available, directly from MasterCard.

A spokesperson for the company told Business Insider over email:
“Some of the services we provide are particularly costly for us –
namely ATM withdrawals. Simply to cover our costs, we have
introduced a £200 free monthly limit, with a fair and competitive
2% fee thereafter.”

N26, a German app-only bank,
shut around 160,000 customer accounts earlier this year, blaming
high ATM withdrawal costs.

The Revolut spokesperson said: “Likewise, the £5 fee for a
RevolutCard is merely to cover the cost to produce, package and
post the card. Customers will make their money back the
first-time they use their card abroad.

“We’re confident that Revolut provides the ultimate value for our
customers. Most UK banks and competitors within this space charge
anything between 3 – 6% for every ATM withdrawal, alongside
marking up the FX rate by up to 6%.”

While Revolut still offers a better deal than many rivals — with
the best rate of currency interchange over its app — the
increased fees highlight
the growing issue of revenue generation and profitability in the
consumer fintech space. So-called “neobanks” — app-only banks
or banking services — face particular scrutiny as many give away
costly services such as ATM withdrawals and currency interchange
as a means to acquire customers.

Revolut’s fee changes come weeks after it
radically scaled back its operations and stopped accepting new
customers. Revolut used to operate globally but has reduced
its scope to just Europe after a disagreement with partner
Paysafe, a company that issues cards and processes payments on
behalf of Revolut. The freeze on sign-ups is also due to the
disagreement, according to an earlier report by Business
Insider.

CEO Nikolay Storonsky told BI at the time that Revolut was
applying directly to MasterCard for a license to issue its own
cards. Storonsky said in late November that he hoped to get a
licence within the week.

A spokesperson for Revolut told BI in an email on Thursday:
“Regarding the MasterCard licensing application, we’re currently
reaching a conclusion and things should be finalised very soon.”

Revolut, founded just a year and a half ago, has proved hugely
popular with consumers,
with more than 330,000 people signing up and a billion dollars
spent on its cards.