Challenger bank Revolut takes on fintech startup Transferwise with free international money transfers

Lynsey Barber
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International folk transfering money can now do it for free up to £5,000 (Source: Getty)

Revolut is ramping up its rivalry with fellow fintech startups undercutting the likes of Transferwise with free international money transfers.

The foreign exchange startup turned challenger bank has scrapped its fee of 0.5 per cent on international money transfers of up to £5,000 each month.

It will also launch an innovative new feature called "Turbo" that lets users pay £5 to speed up the transfer from three to five business days to between one and two.

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The nearly two-year-old fintech firm has been beefing up its monetisation efforts, launching an Amazon Prime-style subscription for banking in March which gives users unlimited fee free transfers for a monthly fee along with other features. And it has partnered with other fintech firms to offer users loans and mortgages in recent months. These efforts have prompted the firm to make transfers free on the first £5,000 on a permanent basis compared to rivals.

“Despite the rhetoric from many companies claiming to eliminate fees and offer the cheapest rates, Revolut is the only company letting you transfer up to £5,000 each month for free," said Revolut founder and chief executive Nik Storonsky.

"The launch of our Turbo will give our customers the option to speed up transfers to one to two days while still being cheaper than the likes of TransferWise and Western Union.”

Read more: UK fintech unicorn Transferwise is heading for Singapore

Revolut is currently raising a series B round of investment from investors in tandem with plans for a £4m crowdfunding round prioritising the first customers who sign up to its premium service.

Balderton Capital, Index Ventures, Seedcamp and Ribbit Capital are among investors who have ploughed $15m (£12m) into the startup which raised an additional £1m cash via an over subscribed crowdfunding.

The fresh cash will help fuel aggressive growth plans, which include international expansion and the launch of Revolut for Business. The beta programme already has more than 10,000 people pre-registered to sign up for the service offering international payments, a corporate card and expense reports. It's understood the startup has interest from a range of companies, from FTSE 100 firms to fellow startups.

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