Following on the heels of yesterday’s announcement that it will be applying for a US banking license, Revolut confirmed last night that it is launching its services in Russia. To do so, the English challenger bank has formed a partnership with QIWI, a financial technology firm that works extensively in Russia and other former Soviet states.
In many ways, QIWI and Revolut are natural partners. QIWI provides payment solutions that allow users to make physical, online, and mobile payments. The company also provides prepaid Visa cards through QIWI Bank.
It is QIWI Bank that will be the focal point of the new partnership. QIWI Group has open access application programming interfaces (APIs) connected to the bank and it will grant Revolut access to them. This will enable Revolut to make use of QIWI Bank’s infrastructure, including its card issuance, identity protection, and payment processing capabilities.
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Back to basics
The launch will mean that Russians now have access to the services that enabled Revolut to take off in the UK. A mobile application and a multi-currency Visa card that allows users to make payments, money and FX transfers in 130 currencies, along with international cash withdrawals, without the traditionally extortionate fees applied by banks.
Revolut already has ties to Russia as a large segment of its technological development team is based there. Nikolay Storonsky, one of the firm’s co-founders, was also born there
Perhaps as a result of this, some Russians are already familiar with the brand. Russians will also be happy to have a new firm countering its current market for money transfers and currency exchange which is expensive and inefficient.
This combination of brand familiarity and poor competition means Revolut’s Head of Russia, Bogdan Uzbekov, felt comfortable enough to estimate that his firm would have over a million Russian users within the next two years. Given the firm’s success in the UK thus far, this would not be a surprise.