Start-up takes aim at PayPal, raises $4.8M

by Joseph Walent 0

In identifying a market segment a large payment innovator has not turned its close attention to, and tuning a business model to provide consumers with a better deal, nascent payment service provider Revolut hopes to carve out a niche of its own.

Seven-month-old Revolut allows users to set up an account and transfer money from their domestic bank account into it. Customers can then use Revolut’s MasterCard to spend these funds abroad at the so-called interbank exchange rate.

Usually consumers buy currencies from exchanges that sell them below the interbank rate in order to make a profit from the transaction. But rather than using the exchange rate, Revolut is looking at other revenue streams.

While many payment services providers enable consumers to make purchase in non-domestic currencies, Revolut makes a point to name PayPal as its target. While unnecessary, perhaps in doing so Revolut is telegraphing the exit strategy it dreams of, acquisition by PayPal.

Overview by Joe Walent, Senior Analyst, Emerging Technologies Advisory Service at Mercator Advisory Group

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