The fintech has gone from strength to strength since its launch several years ago and now lays claim to almost two million users in Ireland alone. But a common question that’s often asked is whether it’s a bank?
Revolut is one of the most popular apps in Ireland and has truly shaken up the financial sector since it launched in 2015.
It charges users no day-to-day transaction fees or no foreign exchange fees on purchases up to €1,000 a month, and provides detailed, up-to-the-minute analytics and push notifications on your spending, a host of great security features, disposable virtual cards, access to Google and Apple Pay, and a rewards scheme to name but a few great benefits.
It’s no surprise then that the fintech has almost two million users in Ireland now.
However a question that’s often asked is whether Revolut is actually a bank?
And the short answer is: Yes. Revolut has a full banking licence and operates in Ireland as a bank.
Though this wasn't always the case...
What is Revolut?
Revolut is referred to as many different things: a fintech, an app, an online-only bank, and a challenger bank to name a few.
Up until recently Revolut operated in Ireland under a so-called e-money licence. Before Brexit it used an e-money licence that it had passported over to Ireland from its UK business, and after Brexit, it used an e-money licence that it had passported over to Ireland from its Lithuanian business.
Under EU passporting rules, a bank or financial institution which is licensed in one EU country is able to ‘passport’ or transfer that licence to another country and operate there without having to get full regulatory approval all over again.
However as Revolut was technically an e-money institution and not a bank, it wasn't covered by the Deposit Guarantee Scheme or the 'bank guarantee'. Nor could it give out loans.
However, since March 2022, Revolut has operated in Ireland under its Lithuanian banking licence.
Revolut received a Lithuanian banking licence in 2018 but for various reason continued to operate in Ireland and other countries under an e-money licence for a few years. This is now no longer the case.
However if you're an existing customer you do need to 'upgrade' your account to banking status in the app first. Otherwise you'll still be using Revolut under the e-money licence.
Deposit Guarantee Scheme
As Revolut is a bank it means customers are covered by the The Deposit Guarantee Scheme (DGS) - provided you have upgraded your account.
In Ireland, the Deposit Guarantee Scheme (DGS) protects depositors in the event of a bank, building society or credit union that is authorised by the Central Bank of Ireland being unable to repay deposits. The DGS is administered by the Central Bank and is funded by the credit institutions covered by the scheme.
The scheme covers deposits of up to €100,000 per institution in things such as current accounts, savings accounts, demand deposit accounts, fixed-term deposit accounts and share accounts.
As Revolut has a Lithuanian banking licence and is therefore regulated by the Lithuanian Central Bank, its customers in Ireland are covered by Lithuania's own version of the DGS up to €100,000.
What this means is that in the unlikely event of something happening to Revolut, any money you have up to €100,000 will be protected by the Lithuanian central bank.
As Revolut operates here under a Lithuanian banking licence, it issues Lithuanian account numbers.
This can sometimes cause difficulty for people who are trying to set up direct debits or standing orders or get paid by their employer.
However Revolut says it has plans to start issuing Irish account numbers later this year with existing customers likely to be able to port over their account to an Irish number.
More on Revolut
For further information on Revolut and to learn more about the fintech, take a look at the following:
- Revolut recently announced that the CEO of its Irish operations, Joe Heneghan, was set to lead the company’s European operations in Lithuania.
- We recently outlined the advantages and disadvantages of Revolut in an episode of our bonkers.ie podcast, which revolved around the topic of current accounts.