Revolut plans commission-free stock trading in Singapore

Singapore

LONDON-BASED fintech unicorn Revolut is planning to launch commission-free stock trading in Singapore, possibly in the next year, as it ramps up expansion in Asia.

The feature will let users invest in stocks commission-free, up to a certain limit. Subscribers to Revolut will get access to more commission-free trades each month, said co-founder and chief executive Nikolay Storonsky.

He was speaking to The Business Times on the sidelines of the Singapore FinTech Festival and Singapore Week of Innovation and TeCHnology (SFF x SWITCH) virtual conference last Friday.

Revolut, which launched in Singapore in October 2019, is better known for its instant crossborder money transfers at only a small fraction of what banks charge. The company is now looking to offer wealth management services in Singapore, including stock trading, cryptocurrency trading and commodities trading.

Revolut Singapore has submitted a formal application to the Monetary Authority of Singapore (MAS) to vary its Major Payment Institution licence to include the business of providing a digital payment token service. It has also informed MAS of its intention to launch commodities trading and pursue a capital markets services licence.

Asked whether Revolut Singapore has informed MAS about its plans for a stock trading service, a spokesperson said the company is unable to comment officially as it is still exploring the possibility of a launch.

As it ramps up its suite of products, Revolut could benefit from a planned review on e-wallet payment limits in 2021.

With the UK-Singapore free trade agreement signed on Thursday as the backdrop, Singapore has agreed to a review next year to consider raising the e-wallet payment limits under the Payments Services Act, which impacts fintechs like TransferWise and Revolut. MAS earlier told BT this is a planned review, and would apply consistently to all e-wallets operated by major payment institutions.

In Europe, Revolut users have been able to access US-listed stocks - with the option to buy a fraction of a share - since September last year. The company has seen a boom in stock trading in almost every country amid a low interest rate environment.

Mr Storonsky said customers will not have to worry about high currency exchange fees, unlike with traditional stockbrokers.

For example, buying Apple or Airbnb stock could have caused them to lose up to 3 per cent in fees when they convert their home currency to US dollar using the foreign exchange rates offered, he said. (see amendment note)

Online brokerages touting cheaper fees for US-listed stocks include TD Ameritrade, which charges no minimum fee and commission, and Tiger Brokers, which charges a US$1.99 minimum fee and US$0.01 per share.

As the fintech market for small and medium enterprises (SMEs) heats up, Revolut is planning to enter the fray with the launch of business accounts in Singapore in the second quarter of 2021. Revolut Business is aimed at helping companies send and receive overseas payments at a lower cost, and supports integration with popular business software. (see amendment note)

The move will pit Revolut against local startups, such as NIUM and Aspire, that are eyeing a piece of the lucrative SME market. In Europe, Revolut Business has signed up over 500,000 clients since its launch in 2017.

Plans are also underway for the company, reportedly one of Europe's most valuable fintech startups, to expand its Asia-Pacific footprint to include India, South Korea, Indonesia and the Philippines. Besides Singapore, the company already has operations in Australia and Japan.

Mr Storonsky estimated that Revolut will have to hire for another 160 roles for the new markets. The company is currently hiring a local team in India, though it takes one to one-and-a-half years to launch in a new market. He said the firm could not commit to any timeline for the Philippines, Indonesia and South Korea as those markets are still in the "scoping stage".

Singaporean Sarveen Chester, who led Revolut's launch in Singapore, has moved to London where he is working on the Asia-Pacific expansion. Mr Chester became global expansion manager in January.

Mr Storonsky said Revolut will also grow its team in Singapore, the hub for its Asia expansion, from 25-30 staff to 40-50 staff "in the near future".

The Singapore team recently lost its heavyweight compliance chief after about a year. Rayson Tan, an ex-Credit Suisse banker, left in October, BT reported. "The departure wasn't really anything noticeable because we were prepared, and the handover was smooth," Mr Storonsky said.

Amendment note: The article has been amended to clarify Mr Storonsky's comments on foreign exchange.