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

A trader watches his chart as he works on the floor of the New York Stock Exchange on July 8, 2014. REUTERS/Brendan McDermid

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

Revolut’s launch comes amid a broader retail boom, which escalated last year when investors acquired so-called “meme shares” that include retailer GameStop and cinema group AMC Entertainment.

US retailers bought $281 billion worth of stock in 2021, up from $38 billion in 2019, according to Vanda research.

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

“For us, this was just the next logical step,” said Gabi Vallejo, head of wealth and commerce at US Revolut.

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

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

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

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

The Securities and Exchange Commission is currently studying whether the practice should be reformed or banned. Chairman Gary Gensler has expressed concern that commission-free trading brokerages may encourage investors to trade more, in order to get more PFOF, even if it is not in the best interest of investors.

Vallejo said Revolut is not concerned about the SEC review, and he expects Revolut will be able to develop as necessary if the rules change.

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

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(Reporting by Hannah Lang in Washington.) Editing by Michael Price and Richard Boleyn

Our Standards: Thomson Reuters Trust Principles.


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