UK fintech Revolut has launched commission-free stock trading in the US in a bid to compete with online brokerages including Robinhood.
The launch follows a surge in retail trading during the pandemic which saw investors start trading from the comfort of their own homes during lockdown. US retail traders bought approximately $281bn worth of stocks in 2021, a sevenfold increase compared to 2019 when $38bn of assets were snapped up by non-professionals, according to Vanda Research.
“This to us was just the next logical step,” said Gabe Vallejo, Revolut’s US head of wealth and trading in comments to Reuters.
US Revolut customers will be able to trade shares of more than 1,100 securities listed on the New York Stock Exchange and Nasdaq.
Commission free trading is already available to UK and European Revolut customers, with a recent $33bn valuation making the payments giant Britain’s second most valuable fintech.
Revolut secured a US broker license in September 2021 and uses a controversial payment method which sees brokers route trades made on the app to market makers on behalf of customers.
The Securities and Exchange Commission is currently considering whether to reform the practice which Chair Gary Gensler has said may not be in investors’ best interest. Gensler has also raised alarm bells over the rise in mobile apps which lure retail traders and “gamify” investing.
“We don’t want to promote irresponsible investing,” said Vallejo in comments reported by Bloomberg. “We made sure to have nothing that would look or feel like gamification in our app.”
Vallejo said Revolut is confident about the outcome of an upcoming the SEC review and said he expected Revolut will be able to adapt to any rule changes.