Britain-based digital banking app Revolut launched commission-free stock trading within the United States on Wednesday, a transfer that can see it compete with on-line brokerages comparable to Robinhood Markets Inc and Charles Schwab Corp.
The launch by Revolut comes amid a broader surge in retail trading, which escalated final 12 months when buyers latched onto so-called “meme stocks” that included retailer GameStop and cinema group AMC Entertainment.
U.S. retail merchants purchased roughly $281 billion value of shares in 2021, up from $38 billion in 2019, in response to Vanda Research.
The new providing is a part of Revolut’s quest to grow to be a so-called “superapp,” the place shoppers can handle each facet of their funds, the corporate mentioned. Revolut additionally presents funds companies, cryptocurrency trading and financial savings accounts.
“This to us was just the next logical step,” mentioned Gabe Vallejo, Revolut’s U.S. head of wealth and trading.
U.S. Revolut prospects can commerce full and fractional shares of greater than 1,100 securities listed on the New York Stock Exchange and Nasdaq, together with greater than 200 exchange-traded funds.
Zero-commission stock trading is already accessible to Revolut customers within the United Kingdom and Europe. The firm was valued at about $33 billion via an funding spherical in July, and is at present Britain’s second-most worthwhile fintech firm after Checkout.com.
Revolut launched within the United States as a banking app in March 2020, and secured a U.S. broker-dealer license in September 2021.
Similar to Robinhood, Revolut will depend on fee for order stream (PFOF) to earn income via its commission-free trades, a controversial apply through which brokers route trades to market makers in return for a payment.
The Securities and Exchange Commission is at present contemplating whether or not to reform or ban the apply. Chair Gary Gensler has expressed concern that commission-free trading brokerages could encourage buyers to commerce extra, with the intention to seize extra PFOF, even when that isn’t within the buyers’ finest curiosity.
Vallejo mentioned Revolut isn’t involved in regards to the SEC assessment and he anticipated Revolut will be capable to evolve as obligatory ought to the foundations change.
“We’re confident we can continue to offer this product to our customers in the most efficient manner possible,” he mentioned.
(Reporting by Hannah Lang in Washington; enhancing by Michelle Price and Richard Pullin)