The Revolution logo appears on a smartphone next to a branded debit card issued by the UK fintech company.
British fintech firm Revolut has partnered with Mastercard to help it expand to the US by the US at the end of the year.
The agreement means that all Revolut's first US debit cards will be issued with Mastercard, while at least half of the European cards will carry the payment giant's branding.
CEO Nik Storonsky said the company would also use some of Mastercard's new technology, including a platform that allows payments to be sent directly from one card to another.
"When we tried to launch in the US two years ago, Mastercard became our first offer on it," Storonsky told CNBC in a telephone interview, adding that he believed the company had "great technology and great infrastructure." 1
But this new merger means Mastercard will get first dibs when it comes to Revolut cards issued in the US Visa will still be the card network behind 75% of Revoluts cards across Europe, and has said it is still planning to support the company's US launch at some point in the future.
"What we've been working very hard on accelerates Revolut's launch in the United States," Sue Kelsey, MasterCard's Executive Vice President for Global Prepaid and Financial Inclusion, told CNBC. "This will allow us 100% issuance of Revolut accounts on Mastercard" to begin with, she added.
Revolut is one of the many digital challenger banks that has gained a foothold in Europe by offering consumers colorful cards and smooth mobile apps. Despite not having any branches, such as Revolut, Monzo and N26 have attracted millions of users.
London-based Revolut has already hired 30 employees in the United States and says they plan to triple the number there in the next six months. Rival fintech companies Monzo and N26 began rolling out in the US earlier this year.
Revolut started in 2015 with a prepaid debit card and currency service that allows people to spend abroad without paying high fees. It has since expanded its suite of products to add support for corporate accounts and trading of cryptocurrencies and, more recently, shares.
But like many of its peers in the fintech space, Revolut has yet to make an annual profit. The company's latest accounts showed losses more than doubled in 2018 to £ 32.8 million ($ 42.6 million) from £ 14.8 million the previous year. TransferWise is a notable exception in the industry, after being profitable for three straight years.
Revolut has continued to grow rapidly, registering between 800,000 and 900,000 new users a month.
Bankers have not been without their teeth. U.S. startup Chime recently had a widespread interruption that left millions of customers without access to their accounts. According to fintech consulting business 11: FS, many upstarts in the UK faced similar problems in the first days of the operation as they relied on third parties for certain processes.
And Revolut has not been immune to controversy, having been hit by a series of negative headlines towards the beginning of the year. Several reports highlighted a toxic work culture at the firm and alleged compliance issues. The company denies that it ever failed to meet government requirements, but admitted that mistakes were made regarding culture.
The Challenger banks have proven to be a hot investment target for venture capitalists who want to capitalize on their wild growth. According to CB Insights, the company had $ 649 million in risk financing over 17 deals in the second quarter.
Revolut is currently in talks with investors for a new round of funding that could be completed later this year. A recent Sky News report said the company aims to raise $ 1.5 billion in a financing agreement consisting of $ 500 million in equity and $ 1 billion in convertible notes. Storonsky declined to comment on that report.
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