Revolut, TransferWise clash over Brexit effect in fintech
Revolut boss speaks out against TransferWise's take on London post-Brexit.
Nik Storonsky, founder and CEO of banking challenger Revolut, is sticking it to global money transfer firm TransferWise.
Speaking at the Treasury’s first International Fintech Conference last week, TransferWise CEO Taavet Hinrikus said that he wouldn’t set up shop in London if he were setting up his firm today. He later told reporters from Reuters that TranferWise would be setting up a new European headquarters as a direct result of Brexit. The global headquarters will remain in London, but the message was clear.
A week later, Revolut boss Nik Storonsky has hit back. Storonsky, who is himself a Russian immigrant to the UK, said that London would remain at the top of his list if he were to start over again, irrespective of Brexit.
“Fintech companies chose to set anchor in our capital city, with amazing access to top of tech talent, an adaptive regulatory environment, and the strength of its traditional financial services sector and there is no doubt in our minds that London will remain a hub for Fintech irrespective of what a few fear mongering individuals might say,” he said.
Storonsky pointed to the fact that fintech produces more “unicorns” that any other segment in the UK. Revolut’s own growth certainly doesn’t appear to have been dampened by Brexit. The firm recently launched a £4m equity crowdfunding campaign on Seedrs, part of a larger institutional round for which details have not yet been disclosed.
Meanwhile the app has been adding partners and products at breakneck speed, most recently partnering with digital mortgage broker Trussle.
Another of those new products was its new subscription service, which launched in tandem to the Seedrs’ campaign. Among the core benefits of the premium membership service is the ability to send money overseas for free (minus the cost of subscription, which is set at £6.99 per month).
This premium account is a clear attempt to take on TransferWise, which makes its money by charging users a small percentage of each transaction.
The two firms divergent takes on Brexit is indicative of the general uncertainty that has surrounded London’s status as a fintech hub since last summer. Last week’s conference was supposed to solidify confidence across the sector, with key figures like Mark Carney and Philip Hammond voicing their support for the industry.
But the comments of Hinrikis threw something of a spanner in the works.
Storonsky isn’t blind to the challenges created by Brexit, but says that London isn’t “giving up its crown as the global FinTech capital any time soon”.
"We are confident that the government will continue to ensure that Britain is a great place to invest, so businesses like Revolut can attract the financing they need to innovate and expand and we have no intention of turning our back on the UK," said Storonsky.