British neobank Revolut granted direct lending license in Brazil

Less than a month after officially launching its app in Brazil on a wait-list basis, British fintech Revolut has been granted a direct credit society (SCD) license, paving the way for the neobank to offer a digital account with more payment and transfer options and to launch new products soon. 

Revolut debuted in early May through alliances, using Bexs’ banking as a service infrastructure and offering Visa-branded prepaid cards — in the future, there will also be an agreement with Mastercard. 

During Web Summit Rio, the fintech’s country manager Glauber Mota (the former executive responsible for creating the digital banking arm of BTG Pactual, one of Brazil’s leading investment banks), spoke with The Brazilian Report. He did not disclose the number of customers on Revolut’s waiting list, but said that “thousands” were gaining access to the app “every week” and that “it may take some time to clear the waiting list.”

The fintech does not rule out the possibility of also seeking a securities dealer (DTVM) license — as it is doing in Mexico — if it makes sense to expand its investment offering. With an SCD license, companies can also enter the lending market. 

With nearly 29 million customers in Europe, Australia, Singapore, and Japan, Revolut is taking its first step into Latin America. It is also exploring the Mexican market and targeting a more aggressive expansion in the U.S., but given the market size, Brazil is likely to become one of the company’s primary operations.

With aspirations of becoming a super-app, Revolut offers a wide range of products and services worldwide. For its debut in Brazil, it chose to start with an offering that not all of its competitors have: a multi-currency account and investments in crypto assets.

“Brazilians are still relatively underserved in terms of cross-border transactions, and we want to make that faster, easier, and cheaper,” Mr. Mota said in early May, adding that buying dollars through the app can be 3 to 10 percent cheaper than the traditional way of loading up an international debit card or using an international credit card. 

That is possible because the fintech’s spread is no more than 2 percent, and the conversion rate used is the so-called “commercial dollar” — used in B2B transactions such as imports, exports, and foreign loans — and not the “tourism dollar,” the less-favorable rate applied to individuals in credit card purchases, international airfares, and bureaux de change. Brazilian multi-currency accounts are limited to USD 27,000 per month, and a 0.5 percent fee will be charged above that.

Currently, Revolut users can make purchases using their prepaid card, Google Pay, Apple Pay, and PIX, Brazil’s instant payment system, in addition to making immediate transfers to other Revolut users in 150 countries and converting the Brazilian real to U.S. dollars and then to 27 other currencies and 90 crypto tokens.

Revolut is not the only foreign fintech trying to succeed in Latin America. Along with the British fintech, Germany’s N26 recently started to roll out its app via a waiting list. The Berlin-based brand landed in Latin America’s largest economy in 2020, but it only started testing its app in 2022. Now, it is gradually integrating 3,000 customers per day from a waiting list of more than 500,000.

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