Armed with a freshly received prepaid payment instrument (PPI) licence by the Reserve Bank of India, the global fintech platform is also looking to complement its cross-border services with domestic payment capabilities, Paroma Chatterjee, chief executive officer, Revolut India, said in an interview.
“The India environment is such that customers are used to having a separate medium for domestic payments and a different solution for international payments such as a prepaid forex card,” said Chatterjee, who joined the Indian subsidiary of the $45 billion fintech’s India subsidiary in 2021 from Lendingkart and held senior roles at Airtel Money, Flipkart and Via.com.
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With the licences, Revolut has secured, said Chatterjee, one can have both domestic and international payments on the same platform. The platform of one of Europe’s most-valued fintechs in India will offer three different kinds of payment options to users—the PPI wallet and a linked prepaid card for domestic payments, a forex card for international merchant payments and the third for remittances.
“The domestic PPI wallet balance will be linked to UPI (unified payments interface) and we are going to have our own UPI handle ‘@revolut’ by virtue of having our PPI licence wallet,” said Chatterjee, adding that a combination of this is how the platform aims to create a niche for itself.
She said that no other platform promised same-day international transfers as of date. Typically, cross-border transfers done through banks take two to six days on average for Indian users, depending on the geography and connectivity of the location.
Creating a quasi-bank
With the first mover advantage of a combined payments platform, competition for the fintech is not from peers but from traditional banks to create a complete digital bank, according to Chatterjee.
While the Reserve Bank of India does not authorize digital or neo banks in India, the platform has so far secured an authorized dealer-II (AD-2) licence, which allows it to manage its own treasury and offer its own foreign exchange rates. It has also received authorization to become an issuing entity for cards.
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“In India, we still do not have a full-fledged digital banking licence framework. Our banking license framework is still a physical bank branch-oriented, which is why we decided to pursue the payments and other digital licenses format so that we can offer consumers a similar experience from a transaction point of view,” she said.
To be sure, Revolut has a banking licence for the European Economic Area and is under the supervision of the European Central Bank and the Bank of Lithuania. In 2024, it received its UK banking licence with restrictions from the Prudential Regulation Authority, the regulator responsible for overseeing the UK banking sector.
Cross-border use cases
Under the umbrella of cross-border payments, the UK-based digital bank app is focused on three main segments—education, tourist expenses, including retail consumers and business travellers, and inward remittances from Indians working overseas.
These focus areas are based on the company’s insights, which showed that 20% of these use cases account for 80% of the transaction volumes. Chatterjee added that these three use cases address around 60-70% of the cross-border transactions.
The opportunity in travel comes from the forex mark-up currently charged by banks and the surge in Indians travelling overseas. Indians spent $30 billion overseas last year, of which around $10 billion was spent only on charges and cross-currency mark-ups, Chatterjee said.
“Having our own treasury management, just like a bank does, allows us to offer best-in-class rates to consumers, which basically means that users can see what the conversion rate is without additional mark-ups,” she said.
Experts are sceptical that Revolut will be as successful in India as it has been in other geographies. In the Asia-Pacific region, Revolut has operations in Japan, Singapore and Australia.
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Vivek Mandhata, managing director and partner—payments and fintech, Boston Consulting Group, said that UPI had ensured that users did not need a wallet for P2P (peer-to-peer) digital payments. However, given the concentration there, capturing the UPI market space is not easy in India and the top three players remain dominant, he said.
“Capturing the digital payments landscape is going to be an interesting challenge for Revolut because wallets have taken a back seat in the country. I think what they stitch around it is going to be interesting and in that context, cross-border might be that option,” said Mandhata.
More than remittances—because India has a lot more inward remittances than outward—a cross-border travel card-type proposition would make more sense, wherein a user can create a forex card in combination with UPI International. He added that it would come down to the kind of experience Revolut could create in terms of being able to pay abroad conveniently using the same application.
Journey so far
Chatterjee joined Revolut in April 2021 and her first order of business was to get the foreign entity registered in India with the corporate affairs and external affairs ministries—which was done by July 2021. In February 2022, the company acquired Arvog Forex, enabling it with an AD-II licence, following RBI’s approval. By September 2022, Revolut had undertaken a full change of the control, management and processes to “Revolutise” the new company, christened ‘Revolut Forex India Pvt. Ltd’.
In April 2023, the fintech submitted its application for a PPI licence, for which it received the in-principle approval within 12 months by April 2024.
“It’s almost like building another Revolut in India,” Chatterjee said, reflecting on her journey. As of date, both the domestic and forex cards are being used by the company’s employees and will soon be opened up to a closed user group, she added.
Given that the payments business has proven less monetizable domestically, Revolut is banking on cross-border operations to bring revenue for the platform in India.
Revolut is aiming to become the fastest cross-border payments platform in India, enabling international transfers within a day.
