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(Original link: businessinsider.com)
This story was delivered to Business Insider Intelligence Banking Briefing subscribers earlier this morning. To get this story plus others to your inbox each day, hours before they're published on Business Insider, click here. The UK neobank has officially launched its app and banking services in the US, allowing customers to sign up for a Revolut account and debit card, TechCrunch reports .
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Revolut has partnered with Metropolitan Commercial Bank for US licensing and FDIC insurance. US accounts currently only come with core Revolut features, such as very low-fee currency conversions, the ability to receive salary deposits two days in advance, and in-app features like transaction notifications, card freezing and unfreezing, and the ability to generate a virtual debit card.
The features currently available to US users represent only a fraction of what Revolut offers to European customers. In Europe and the UK, Revolut has built out its app into a financial services hub of sorts, offering features like the ability to purchase cryptocurrencies or gold , paid monthly subscriptions to insurance products, mobile phone insurance, and stock trading , per TechCrunch.
This implies that, while Revolut's US offering may currently be fairly basic, there is plenty of room for the neobank to flesh it out in the near future, once it gauges the services US consumers want and forms partnerships with third-party solution providers to add those features.
There is both an upside and a downside to the timing of Revolut's US launch, which comes in the midst of the coronavirus pandemic:
Incumbent banks' branch advantage is diminished by the coronavirus. One of the clearest advantages that legacy banks hold over digital challengers is physical branches that offer access to cash and in-person assistance with customer service issues, among other benefits. However, because of the coronavirus crisis, many major US financial institutions are reassessing their branch strategies, i.e. temporarily closing or restricting access to physical locations. This could create a large base of US consumers who are actively seeking out online and mobile banking tools, potentially for the first time — and whom Revolut could pull in with its digital prowess. But consumers may be hesitant to try a new neobank in uncertain economic times. The financial impact from the coronavirus is expected to be severe: A BofA economist declared last week that the US has already entered a recession, and that unemployment rates could double between February and July. This could make consumers more risk-averse and apprehensive about moving their funds to a new bank — especially one that's nontraditional — and instead push them toward legacy institutions, which they may perceive as more secure. In that case, Revolut's US launch may fall flat, jeopardizing any early momentum the neobank may have otherwise enjoyed. Want to read more stories like this one? Here's how to get access:
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