(Reuters) – 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 corresponding to Robinhood Markets Inc and Charles Schwab Corp.
The launch by Revolut comes amid a broader surge in retail trading, which escalated final yr when buyers latched onto so-called “meme shares” 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 line with Vanda Research.
The new providing is a part of Revolut’s quest to develop into a so-called “superapp,” the place shoppers can handle each side of their funds, the corporate mentioned. Revolut additionally gives funds companies, cryptocurrency trading and financial savings accounts.
“This to us was simply the subsequent 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 out there to Revolut customers within the United Kingdom and Europe. The firm was valued at about $33 billion by an funding spherical in July, and is at present Britain’s second-most precious 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 move (PFOF) to earn income by its commission-free trades, a controversial observe during which brokers route trades to market makers in return for a price.
The Securities and Exchange Commission is at present contemplating whether or not to reform or ban the observe. Chair Gary Gensler has expressed concern that commission-free trading brokerages might encourage buyers to commerce extra, with a view to seize extra PFOF, even when that isn’t within the buyers’ greatest curiosity.
Vallejo mentioned Revolut just isn’t involved concerning the SEC overview and he anticipated Revolut will be capable to evolve as obligatory ought to the principles change.
“We’re assured we will proceed to supply this product to our prospects in essentially the most environment friendly method attainable,” he mentioned.
(Reporting by Hannah Lang in Washington; modifying by Michelle Price and Richard Pullin)