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Is Revolut in Trouble?

Up until a few weeks ago, I was recommending Revolut and Revolut Business as good “challenger bank” accounts, owing to their fee-free and near-instant transactions, virtual cards, and a range of other services which made them a compelling financial technology.

However, in recent weeks, I’ve had cause to slowly step away from the service, for the following reasons.

First, a couple of disclosures. Actually, several of them:

  • I am a personal Revolut customer
  • My business has a (fee paying) Revolut Business account
  • Revolut paid me commission fees to refer them customers, through an affiliate platform called Impact.com, something I was happy to do as a satisfied customer.

The following events occured:

  • Last year, Revolut’s CFO Peter O’Higgins resigned, among some “concerns” about suspicious transactions from 2018 (which were also reported by The Telegraph) perhaps as the British banking sector started to sink it’s teeth into the challenger bank. This was to be expected, really. I didn’t much mind this at the time, and the systems involved were turned back on.
  • In March this year, rumours apparently circulated on Twitter and WhatsApp that Revolut was struggling – this article shows how they tried to reassure people that they were in good health. I don’t react much to rumours circulating online. People were bored and locked in. The response was, however, illuminating.
  • In April, Revolut suddenly announced (to me) they would be ending their affiliate program, with one day’s notice, and all commissions would be reduced to 0%. They cited “Covid-19” difficulties as the reason.
  • Revolut sent affiliate payment notifications as normal in April. But… no payment actually arrived. On clarification, they sent another payment notification, but no payment arrived. This payment (for a small amount – we’re talking under £100 GBP) has, to date, never arrived.
  • They are overdue for the May payment also, a slightly higher figure.
  • Also in May, on the business account, we were met with a sudden demand to “prove” identities which had already been proved when setting up the account. This was successfully done, but it was unclear why it was necessary. Perhaps more compliance issues? Who knows. It’s not something which inspired confidence.
  • On 28 May 2020, AltFi told how Revolut are seeking a UK Chair in order to seek a banking licence in Britain. This is also backed up by a job listing at the Revolut website.
  • 4 June 2020 Wired.com wrote an article about how some Revolut staff in Krakow, Poland, had been told to leave their jobs or be fired. Revolut has this year trumpeted it’s growing number of employees as a key metric. Read that article to discover how much these employees may have been paid. It’s not a hill of beans.
  • Today (9 June 2020) I received an email from Revolut entitled “Updates to your Revolut Account”, for my personal account, explaining how several of the services would become a) more expensive; or b) fee-paying when previously they had been free. They also were careful to explain ‘how we “safeguard” your money’

All of which lead me to wonder if Revolut was okay – or if they were in trouble. My personal reaction to their failure to pay a small amount of marketing money has been to withdraw excess balances from all accounts until such a time as they are able to furnish me with a meaningful reply.

Having received an investment totalling $500M does not mean you have cash. That’s not how investment works. It’s unclear how Covid-19 could have such a big impact on Revolut, but similar issues appear to have befallen Monzo, according to reports.

One issue here is that there has been some pushback to the challenger banks by traditional banks. For example, from my personal experience, inbound transfers are often problematic, feature additional checks, or are sometimes flat-out refused. Fraud-prevention is cited, but this additional pain for the consumer will make it a fraction more difficult to fund an account.

I want to like Revolut. I’d like to see them succeed. But something about this wobble and the way they have reacted does shake my confidence. I wasn’t overly or unduly concerned by the compliance issues of 2018 – all fledgling businesses make mistakes, and you can’t disrupt a sector like banking, without taking some shots of this nature – but the Wired revelation, and the just-plain-weird option of not paying known influencers seem to me to be decisions likely only to be taken in extremis.

At my business, it is likely we will still hold a USD balance as a business, though the amounts involved will be reduced, in line with the apparent volatility hinted at in recent weeks, and the increased risk this may indicate.

You should do your own research, and satisfy yourself. I am relatively conservative. Cash is a finite resource. I like to keep mine in a secure location.

By Robin Scott

I'm Robin Scott, a WordPress and WooCommerce expert who, along with three other people, runs a business called Silicon Dales Ltd remotely, from a base in the North West of the UK (kind of near Manchester!). I enjoy using my talents for programming to track and interpret sporting, political or retail data - and therefore you'll see me posting some content in these spaces in this, my personal website. If you're interested to talk about leveraging this for your business (in sport, entertainment, retail, etc) please contact me.

2 replies on “Is Revolut in Trouble?”

Many thanks for this article.
Your article so resonates with me.
I have been Revolut loyal business and personal customer from the start, recommending their services to all the people i knew. Signing up my family and whole business team to it. We are all metal plan holders.
This year my son’s account was frozen on the day of his birthday leaving him totally stranded abroad. I was infuriated by 4th “random” check that year, but complied. As I needed to resolve the situation.
4 weeks later account was unfrozen with no apology, no explanation, no compensation. My son now closed his account and is absolutely furious that none of the losses incurred has been compensated for. Metal plan fee is not returned either, even that services promised weren’t received.
I will follow the suit, pending all transfers to complete by the end of this week bringing my account to zero.
I have given them enough slack at the beginning, as a new start up, I
believed they will improve with time. But that trust is broken now.
I do not wish to give my money to the financial institution I no longer trust. There are better options out there that deserve it more.

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