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Revolut drops out of Singapore digibank race over high capital requirement
AS THE deadline for digital banking applications creeps closer, high-profile payments fintech Revolut has closed the door to joining Singapore's digital bank landscape over high capital requirements, its top executive told The Business Times (BT).
"Based on our initial analysis, it does not make sense to have a banking licence here because of the high capital requirements," said Revolut chief executive Nikolay Storonsky on the sidelines of the Singapore FinTech Festival and Singapore Week of Innovation and TeCHnology (SFF x SWITCH) conference.
This comes even as the UK-based fintech has been in talks with "almost every single company" in Singapore that has mulled a digital banking licence, a Revolut spokesperson further told BT.
The Monetary Authority of Singapore is accepting applications for up to five digital banking licences (up to two for retail banking, and up to three for wholesale banking) until Dec 31.
An applicant for the digital full bank should meet the minimum paid-up capital of S$1.5 billion within three to five years from commencement of business. At the restricted stage, the minimum paid-up capital stands at S$15 million.
To be clear, Revolut will still be chatting with potential partners up until the deadline next month.
But when asked if the firm is likely to send in an application, Mr Storonsky told BT: "Purely based on how high the requirements are, for now at least, it's a 'no'."
Revolut recently made its mark in Singapore with the launch of its multicurrency e-wallet last month.
Through the Revolut app, individuals can hold and exchange 14 currencies at the interbank "Google" exchange rate, send and receive money from Revolut users for free, as well as spend in over 150 currencies using a FX-linked Visa debit card.
The firm is not the only one among its peers to have shied away from a digital banking licence.
Earlier this month, Bloomberg reported that homegrown payments startup Instarem (recently rebranded as Nium) will not contest for a licence.
In October, BT reported that UK-based fintech TransferWise has also ruled out plans to become a digital bank, and will instead look to ramp up its core business of cross-border payments in the region.