This week, an email from Revolut Business landed in our inbox: “Hire abroad in days, we’ll handle compliance.” Revolut now offers to employ your staff in other countries, run their payroll, pay their taxes and manage their benefits. Accounts, cards, currency exchange, trading, crypto, and now human resources.
It is worth asking what this tells us about Revolut, and what it should tell every fintech founder.
One brand, several companies
Read the small print of that email and you find not one Revolut, but several:
- Revolut Bank UK Ltd, a bank authorised by the Prudential Regulation Authority and regulated by the FCA and the PRA.
- Revolut Ltd, an electronic money institution authorised by the FCA, also registered for crypto services.
- Revolut Trading Ltd, the investment firm.
- And for the new hiring service, a licensed partner: “Revolut Ltd does not act as an employer.”
Add the European bank in Lithuania and the Swiss banking licence application we discussed in Revolut in Switzerland: buy or build?, and you have a group that is a bank, an e-money institution, a broker and a payroll reseller, depending on which button you press in the app.
For the client, that matters. Money held with the bank is a deposit, covered by the deposit guarantee. Money held with the e-money institution is safeguarded, but it is not a deposit. Same app, same logo, different protection. Every business customer should check which entity actually holds their account.
Why Revolut does it
A hiring service is not really about hiring. It is about keeping salaries, and the currency exchange on those salaries, inside the Revolut account. Winning a business client is expensive; once you have one, every additional service lowers the cost of that client and makes the account harder to leave. That is the logic of every “super app”.
And it works: the more a client does inside one app, the less likely they are to move.
What it costs
- Every product is a new way to fail. A new regulator, a new partner, a new category of complaint.
- The partner’s mistakes carry your name. Legally, the partner is the employer. Commercially, if a salary is wrong or an employment contract goes wrong in another country, the client blames the logo on the screen. Reputation does not read footnotes.
- Regulators get nervous. A group that grows in every direction at once looks like a group whose controls may not keep up. Regulators expect a firm to remain responsible for what it outsources.
- One incident hits everything. A failure in payroll damages trust in the bank account too.
Breadth or depth
There are two ways to build a financial business. Revolut bets on breadth: everything, everywhere, for everyone, at scale. The Swiss private bank bets on depth: fewer services, done perfectly, for clients who stay for thirty years.
Both can work. But they are not the same business, they do not need the same capital, and they do not carry the same risks. Revolut can afford breadth because it has the balance sheet, the licences and the compliance teams to absorb the mistakes. Most fintechs cannot.
What a fintech founder should take from it
- Master one licence before you add five products. Your first regulated activity is the foundation; everything else rests on it.
- Know which entity does what. Your clients, your bank and your regulator will ask.
- Choose partners as if their mistakes were yours, because commercially they are.
- Add products in sequence, when your controls can carry them, not when the market is excited.
- Decide early whether you sell breadth or depth. Trying to do both is the most expensive option.
If you are deciding which licence to build your business on, see our EMI licence guide and our white-label banking solutions, or write to insight@fintechlex.com.
This article is for general information only and does not constitute legal or financial advice.
