On Thursday the UK-based digital bank Revolut, launched fee-free share trading service, gaining an edge over its banking rivals such as Monzo and Starling Bank. The bank’s latest free trading deal is called a market disruptor which is likely to impact the major trading platforms such as Hargreaves Lansdown.
The company launched the service to ‘liberalise’ the investment market. Revolut’s Chief Executive, Nik Storonski said in a statement, “Investing in the stock market has been closed off to ordinary people for far too long, which has led to real problems for people as they search for effective ways to make the most of their savings.”
The company graduated from providing its customers with cheap travel money to trading in cryptocurrency with a licence in full banking services, and to commission-free stock trading services. The digital start-up which already holds banking licence in the eurozone aims to expand and gain a similar licence in its homeland, UK, and elsewhere.
As the company plans on entering new territories, Storonski added, “It’s just a start of the development of our offer of fee-free investment services. We will be broadening it to further markets and additional products in the near future.”
The company announced three free trading plans: (a) free users, (b) premium subscribers, and (c) metal subscribers. Free users could make up to three transactions for free every month and would be charged £1 per trade for further transactions. Premium subscribers would be allowed to make eight free trades with the monthly charges of £6.99, while metal subscribers would get 100 free trades transactions.
André Mohamed, Revolut’s head of wealth and trading, said that a single transaction doesn’t cost £12, as charged by UK’s largest online trading platform, Hargreaves Lansdown. Mohamed added that it even the £1 charged from users who exceed their monthly quota ‘more than covers the cost — it’s not a loss leader for Revolut’. He emphasised that the company aimed at earning mainly by encouraging users to sign up for its subscription based services.