The launch of a Revolut stock trading service for US users directly competes with Robinhood and Cash App for some market share.
British fintech startup Revolut plans to allow US users access to stock trading on its platform. Revolut secured the necessary approval to become a licensed US broker-dealer and launched the commission-free service on its app on January 19.
According to Revolut’s US head of wealth and trading, Gabe Vallejo, the move “was just the next logical step” for the company. The fintech’s stock trading initiative is part of its broader scheme to become a super app or one-stop shop. This would see Revolut’s huge customer base manage all financial offerings from one point. Available offerings spread across payments services, cryptocurrency trading, and savings accounts.
Following the new development, Revolut will compete more directly with other dynamic financial platforms. Some of these include the ever-popular Robinhood and the Block Inc-developed Cash App. Revolut’s US users will be privy to over 1,000 securities, including New York Stock Exchange and NASDAQ shares. In addition, the London-based fintech startup will also provide access to about 200 exchange-traded funds (ETFs).
Revolut Stock Trading Feature Showcases Utilitarian Dynamism
Some of the features from Revolut’s stock trading initiative also include fractional shares. Furthermore, other order types include limit and stop-limit orders.
The Revolut app for the stock trading option has an array of insightful tools to potentially enhance how prospective traders approach the game. Some of these include market graphs, a handful of integral news headlines, and information about the top ten holdings of each ETF. Furthermore, buying and selling stocks does not incur a commission, and users can also set up price alert functionality. However, as is the case with all securities trading platforms, there is some spread between the buying and selling prices.
Revolut’s latest initiative arrives amid a marked increase in retail trading. For instance, countless investors were caught up in the ‘meme stock mania early last year’. This saw the share prices of companies such as video game mainstay GameStop and cinema group AMC Entertainment skyrocket to astronomical heights overnight. According to Vanda Research, retail traders in the US purchased a massive $281 million worth of stocks last year. To put this in perspective, the total value of stocks purchased was just $38 billion only two years before.
New Initiative Fuels Broader Attempt to Expand Beyond Payments in America
Revolut first launched in the US as a banking app in the first quarter of 2020. The fintech is currently the second most valuable of its kind in the UK – second only to Checkout.com. Revolut’s aim to expand beyond payments in the US also saw the fintech partner with blockchain specialist Paxos in 2020 to bring crypto trading to its app.
Revolut currently has a market valuation of around $33 billion following an investment round back in July last year. At the time, the fintech raised $800 million in a funding exercise spearheaded by SoftBank (TYO:9984) and Tiger Global.
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