Revolut’s business banking arm is bidding to capture larger enterprise clients — and it’s making an ambitious push into products across hardware, credit and savings to get their attention.
The UK fintech established its B2B banking unit in 2017 to provide banking services including business debit cards, multi-currency accounts and invoicing aimed at freelancers and companies with fewer than 10 employees.
It’s since attracted hundreds of thousands of customers and now accounts for around 20% of the wider group’s topline, James Gibson, head of Revolut Business, tells Sifted. He declined to confirm the exact number of customers the business unit has.
In September, Revolut Business exceeded annual revenues of $500m. That puts it ahead of B2B banking fintechs such as Tide, which reported a turnover of £113m according to 2023 Companies House accounts and has more than 1m users.
Upscaling its clientele
Revolut’s B2B business banking unit’s drive to diversify its customer base by targeting companies with more than 50 employees may face some pushback though. They typically have very different banking needs to the smaller businesses the unit was first built to serve.
“If we want to win these larger customers, we have to develop entirely new products,” says Gibson.
Revolut Business has built out and launched entirely new products aimed at large companies in the past year. This includes the rollout of savings accounts and treasury products for larger businesses over the next few months as well as a credit product and the introduction of new payment methods such as buy now, pay later next year.
While small businesses still make up the majority of its clientele, Irish airline Aerlingus and fitness company Barry’s Bootcamp bank with Revolut.
One of its most ambitious endeavours is in the payment hardware industry, which Gibson says is new territory. In 2022, the fintech launched Revolut Reader, a lightweight card reader that marked its entry into in-person payments. And last month, it launched its payment terminal as part of a wider bid to break into the retail and hospitality sector.
The move will mean playing catch up — something the normally first-to-market neobank isn’t used to doing — as it looks to muscle in on the already-vibrant payment hardware market.
UK-based SumUp and US-focused Square, for example, have been in the market since the 2010s and have each onboarded 4m merchants. By contrast, 25k merchants have processed in-person transactions with Revolut, across Revolut Reader, Terminal and tap-to-pay on iPhone.
“It’s a new product — we’re not at like 90% penetration yet,” says Gibson. “And it’s also a new customer type. Historically, we’ve been focused on technology companies and this is more of a push into retail and physical.”
Revolut’s fraud problem
Another key obstacle will be shedding its image as a platform where customers are at risk of fraud. A recent BBC Panorama report identified Revolut as the UK bank with the most fraud cases in October. One of the key cases highlighted was on Revolut Business, where one user lost £165k in an hour.
Later reports also cited another customer of the business unit that was pressured into authorising four transfers that totalled £160k. And earlier this year, Sifted spoke to another Revolut Business customer who lost £15k on the platform.
The issue of fraud in fintech was recently pushed further into the spotlight after new legislation came into force in the UK on October 7. The Payments Services Regulator (PSR) now requires that all payment service providers must compensate authorised push payment (APP) fraud victims up to £85k within five days (with certain exceptions).
Revolut’s fraud reimbursement policy is in line with standard industry practice, says Gibson.
“The new PSR regulations obviously tighten up consumer protection but they don’t fundamentally change how we operate,” he says. “We still have the same controls and we still want to put the safety of our customers’ money first.”
To strengthen its controls, Gibson says Revolut Business is launching a specialised in-app hub where users can add more stringent account security options such as two-factor authentication. It’s also leveraging AI and machine learning to improve customer authentication processes and detect suspicious activity.
“They’re not necessarily things you would notice too much as a customer and that’s kind of the idea,” he adds.
Read the orginal article: https://sifted.eu/articles/revolut-business-bank-fintech/
