Revolut, a financial technology (fintech) firm that offers foreign currency to consumers abroad at the interbank rate available on the financial markets is to expand into the business sector with claimed interest from large European corporations such as Virgin Atlantic.
Users of the new Revolut for Business app can set up an account within five minutes and hold, exchange or transfer money from 25 currencies, including British pounds, euros or U.S. dollars from this home bank account.
Customers do not face the extra expense of using a traditional exchange that would take a cut or typically offer less generous foreign exchange (FX) rates.
A MasterCard contactless corporate card is issued to business end users and no fee is charged for transactions when it is used abroad to make transfers between fellow Revolut business account holders.
Revolut makes its money by advertising to its consumer end users, of which it claims 650,000 since its establishment two years ago, but it will charge its new business users an account fee.
Three packages ranging from £25 up to £1,000 per month are available to business end users, who get additional features such as real-time spending notifications and data analysis alerts, plus dedicated customer support.
The first month is free to enable businesses to explore the app and see if they want to sign up over the longer-term. 12,000 businesses have pre-registered prior to today's launch, which essentially means they've expressed an interest in it since it was announced at the turn of the year.
This includes Emirates airlines' UK operation and Virgin Atlantic. Start-up companies such as AirSorted, which is an Airbnb host management service, and Market Invoice have also expressed an interest. The latter enables businesses to sell their unpaid invoices to provide working capital.
The London-based start-up says it has raised a total of £17 million to date. The latest finance includes venture debt from U.S.-based Triplepoint Capital, according to a regulatory filing, which does not specify the exact amount of this financial input.
The company has previously raised £11 million in equity financing from two seed rounds and a Series A fundraising, according to Crunchbase, from backers including Seedcamp, Index Ventures, Balderton Capital, Venrex, Point Nine Capital and Ribbit Capital. A crowdfunding campaign on CrowdCube also contributed £1 million towards the Series A fundraising effort last year.
Revolut faces competition from fellow fintech start-ups such as Transferwise and WorldRemit, who offer low fees, and incumbent technology giants such as PayPal.
All these type of value-adding services rely on using the existing payment 'rails' provided by credit card companies and banks around the world. But they provide extra convenience, ease, data and service, plus a cheaper price than traditional transaction banks that have historically charged excessive cross-border transfer fees.
Nikolay Storonsky, founder and CEO of Revolut, said in a statement that he wants "to help businesses across the UK and Europe eliminate unfair banking fees" and that "launching a business service was the next logical step for us."
"To have more than 12,000 businesses pre-registered, from FTSE 100 firms to tech startups, gives us great confidence that Revolut for Business will experience the same demand as our consumer service has."