Revolut Modifies Pricing Structure During Economic Downturn
In the face of the ongoing Covid-19 crisis, digital banking platform Revolut, with over 12 million customers and a recent $500m funding, is feeling the impact. The company is implementing changes to its pricing and service offerings in a bid to focus on sustainable growth and revenue generation.
One of the most significant changes is the decrease in the limit for free transfers on Revolut's base account. Previously set at £5,000 per month, the new limit stands at £1,000. This change may suggest a shift in Revolut's target customer demographic or usage patterns. According to the company, the typical customers who do not reach the monthly transfer limit of £1,000 are primarily students and individuals with low-income or low financial activity.
The increase in market volatility has led to an increase in weekend pricing on Revolut. For most currencies, the weekend pricing has risen from 0.5% to 1%. This might impact the cost of transactions made over weekends for Revolut users.
Revolut's "super app," unveiled last week, offers a platform for customers to manage all their finances and bank accounts within the Revolut platform. This move is a response to the open banking trend, allowing Revolut to offer a more comprehensive financial management solution. The "super app" could potentially drive the revenues that Revolut is looking for.
The changes in Revolut's pricing and transfer limits may affect customers who frequently make international transfers. The company's research indicates that most of its customers will not reach the new limit of £1,000 on free transfers. However, this could necessitate a reevaluation of financial planning strategies for some Revolut users.
The Covid-19 crisis has affected Revolut's revenue, which is primarily driven by interchange fees and travel money. To counteract this, Revolut is looking to focus on more sustainable growth and is seeking to generate more revenue, which has been accompanied by some cost cutting.
It is worth noting that Revolut's terms and conditions are a valuable resource for learning about changes in their services. Customers are encouraged to regularly review these terms to stay informed.
Many money transfer companies and card networks have increased their pricing across corridors, especially in March, due to currency volatility and adverse macro-economic shocks. Revolut's changes in pricing and transfer limits may be a part of the company's strategy to generate more revenue.
In conclusion, Revolut is adapting to the challenges posed by the Covid-19 crisis by implementing changes to its pricing and service offerings. These changes, including the introduction of weekend pricing and the decrease in the free transfer limit, may necessitate a reevaluation of financial planning strategies for some users. However, the launch of the "super app" offers a comprehensive financial management solution, which could potentially drive the revenues that Revolut is looking for.
