FinTech: Revolut Adds Gold To Its App
Revolut’s customers can now use the app to buy gold in amounts convenient to them.
Revolut has partnered for gold custody services with the London Bullion Market Association. This firm will hold the gold purchased by a customer via the Revolut App. The customer need not bother with physical handling or storage of the yellow metal. Gold purchases via the app are now available to users with a Metal or Premium account. (THE FINTECH TIMES)
Revolut expanded its basic banking app previously with cryptocurrencies (December 2017) and stocks (July 2019).
It now offers gold, held by the user in his account as “precious metal exposure.”
Revolut and gold – regulation
However, Revolut is careful to clarify the regulatory angle on its new gold service:
“Gold is not like the e-money in your Revolut account. Gold is not e-money and as such, our gold services are not regulated in the UK by the Financial Conduct Authority. Funds received by us in relation to your gold transactions and your gold itself, will not be safeguarded under the UK Electronic Money Regulations 2011, or the Payment Service Regulations 2017. When you purchase exposure to gold through Revolut, it will also not be protected through the Financial Services Compensation Scheme.”
Pricing and costs
Revolut’s gold-selling rate is derived from the XAU market rate plus a small markup.
Currently, the markup is 0.25% during market hours and 1% during out of market hours.
Users can also set the price they want to buy their gold exposure. The company’s app will execute the transaction when the market price matches with the user’s buy order price.
A user’s gold exposure is securely held by Revolut’s service partner in the form of real, physical bullion.
Interestingly, a user can transfer his gold exposure to another Revolut user via the app, or convert it instantly into cryptocurrency, or e-money to make purchases.
Democratizing financial services
Ivan Chalov, Product Owner for Precious Metals at Revolut said: “Access to gold is the latest step we’ve taken towards allowing our customers to further diversify their portfolio. Much like investing in the stock market, many have felt closed off from obtaining access to gold, finding it difficult to know where to begin. We’ve made sure that obtaining access to gold exposure is as simple and low cost as possible, with users being able to trade at amounts that suit them. Our goal is to open up new financial products for our users and give them as many options as possible so they can save, invest and manage their money in the way that they want.”
Last month, Revolut raised $500 million in its ‘D’ round led by TCV. Though it is yet to report a profit, Revolut now ranks as one of the most highly valued startups worldwide.
In 2019, it grew customers by 169%, and revenues by 354% year-on-year. Its Premium and Metal subscription accounts grew by 154% and now generate significant revenues.
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