Revolut India Revolut India CEO Chatterjee said that the global fintech platform also hopes to supplement its cross-border services with domestic payment capabilities with the Reserve Bank of India’s freshly received advance payment instrument (PPI) license.
“The Indian environment has made customers accustomed to having separate domestic payment media and offers different solutions for international payments such as prepaid foreign exchange cards,” Chatterjee said.
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With the license, Revolut has been secured to ensure that domestic and international payments can be made on the same platform, Chatterjee said. One of Europe's most important fintechs, India's platform will provide users with three different payment methods: PPI wallet and linked domestic payment prepayment cards, foreign exchange cards for international merchants and a third remittance card.
Chatterjee said: “The domestic PPI wallet balance will be associated with UPI (Uniform Payment Interface) (Uniform Payment Interface), and we will own UPI Hander'@revolut' by owning a PPI license wallet.”
So far, no other platforms have promised an international transfer on the same day. Typically, cross-border transfers through banks take an average of two to six days depending on the location’s geography and connectivity.
Create a quasi-bank
Chatterjee said that with the first driving force of the merged payment platform, the competition in fintech is not from peers, but from traditional banks to create complete digital banks.
Although the Reserve Bank of India does not authorize a digital bank or new bank in India, the platform has so far obtained an authorized Dealer II (AD-2) license that enables it to manage its own finance ministry and provide its own foreign exchange fees. It has also been authorized to be a card issuing entity.
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“In India, we still don’t have a mature digital banking license framework. Our banking license framework is still for physical banking branches, which is why we decided to adopt payments and other digital licensing formats so that we can provide consumers with similar experience from a transactional perspective,” she said.
To be sure, Revolut has a bank license for the European Economic Area and is under the supervision of the European Central Bank and the Bank of Lithuania. In 2024, it obtained a UK banking license and was restricted by regulators responsible for overseeing the UK banking industry.
Cross-border use cases
Under the protection of cross-border payments, the UK-based digital banking app is concentrated in three major market segments, including education, travel expenses, including retail consumers and business travelers, and introverted remittances from Indians working overseas.
These focus areas are based on company insights that 20% of these use cases account for 80% of transaction volume. Chatterjee added that these three use cases involve 60-70% of cross-border transactions.
The opportunity for travel comes from the current allegations of foreign exchange markups by banks and the surge in Indians traveling overseas. Chatterjee said Indians spent $30 billion overseas last year, with about $10 billion of them only on charges and cross-currency markup.
“Having your own financial management, like a bank, we can provide consumers with top-notch interest rates, which basically means users can see what the conversion rate is without other markups,” she said.
Experts' revolution on India will be as successful as other geographical locations. In the Asia-Pacific region, Revolut operates in Japan, Singapore and Australia.
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Managing Director and Partner Vivek Mandhata Payment and Fintech Group (Fintech), Boston Consulting Group (Fintech), said UPI ensures that users do not need P2P (PEER-TO-PER) wallets for digital payments. However, given the concentration there, it is not easy for India to capture the UPI market space, and the top three players still dominate.
“Capturing the landscape of digital payments will be an interesting challenge for the revolution, as the wallets are already in the back seats in the country. I think what they stitch around it will be interesting, and in this case, cross-border might be the option.”
It's not just remittances, as there are a lot more internal remittances in India than to foreign exchange – the cross-border travel card proposition will make more sense, where users can use forex cards in conjunction with UPI International. He added that it will depend on the experience that Revolut may create to be able to use the same application to conveniently pay abroad.
Journey so far
Chatterjee joined Revolut in April 2021, and her first order was to enable foreign entities to register in India with the Ministry of Corporate Affairs and Foreign Affairs, which was completed in July 2021. In February 2022, the company obtained Arvog Forex after RBI approval and obtained an AD-II license. By September 2022, Revolut has made comprehensive changes to control, management and processes to “make” new companies, Christed’Revolut’Revolut Forex India Pvt. Ltd'.
In April 2023, FinTech submitted a PPI license application, and by April 2024, it received in-principle approval within 12 months.
“It's almost like building another traitor in India,” Chatgi said, adding that as of now, the company's employees have used domestic and forex cards and will soon be open to closed user groups.
Given that payment business is less monetized in China, Revolut is relying on cross-border operations to bring revenue to India’s platform.
Revolut aims to be India's fastest cross-border payment platform and enable international transfers in one day.
