Revolut disrupted banking in Europe—can it do the same in the U.S.?

Since launching in 2015, financial upstart Revolut has become a force in Europe by offering cheap foreign exchange and a growing suite of digital banking services. Now, it plans to conquer the U.S. market—provided, that is, Americans take note of its existence.

While Revolut’s products like no-fee accounts and cash advances may prove enticing, the country is already awash in other so-called challenger banks that offer similar services. These include the likes of Chime and Varo, as well as other financial firms like Robinhood and SoFi that are quickly expanding into banking.

Revolut’s founder, Nik Storonsky is undaunted by the challenge. The 36-year-old Russian has a long blond mane and a laconic demeanor that suggests he runs an underground nightclub rather than a global bank. But he has excelled at navigating the business and regulatory challenges of launching banks in different countries.

In an interview with Fortune, Storonsky says that, since launching last March, Revolut has acquired 150,000 U.S. customers, and that it expects that figure to grow to 1 million in the next year. And, in November, the company broke even for the first time en route to what it says is a path of sustained profitability.

As for competition, Storonsky claims that other digital U.S. challenger banks like Chime and Square Cash are based on specific use cases, such as unbanked consumers or peer-to-peer payments. In contrast, he believes Revolut’s comprehensive offerings, which include insurance, cryptocurrency and global money transfers, will set it apart.

Storonsky also noted that Revolut is not acquiring its customers from fintech rivals, but from thousands of legacy banks, which he says have failed to offer millennial and Gen-Z customers the services they want. But the question remains of how it will attract those customers’ attention in the first place.

“We do have an awareness problem,” concedes Revolut U.S. CEO Ronald Oliveira, but adds that the company is now paying customers to refer their friends, and using social media influencers to spread the word.

In other countries, Revolut has gained a foothold by catering to ex-pats looking for a better deal on foreign money transfers, and Storonsky says that is a pillar of the country’s U.S. strategy. That strategy will prove harder in the U.S., though, which is only close to two other countries, while most of its citizens don’t have a passport.

Oliveira notes that a big opportunity for Revolut lies in the remittance market. He says its banking services are gaining traction in border states like California and Arizona, where many blue collar workers are using it to send small amounts of money home to Mexico.

Revolut is also betting on a fledgling service targeted at small businesses, which offers a low-cost way for entrepreneurs to pay suppliers in different countries. That strategy mimics that of Revolut rival TransferWise, a U.K. firm that has been offering “borderless accounts” to merchants since 2017. Both London-based TransferWise and Germany’s N26 digital bank are also trying to make inroads into the U.S. market.

Despite potential to gain footholds in different niches, Revolut still faces a big challenge in the U.S. A partner at a prominent venture capital firm, who spoke on condition of anonymity, said the company’s flagship offering—”frictionless foreign exchange”—has a more clear-cut use case in Europe, added that Revolut will have a hard time standing out in the U.S.

Conversely, the venture capitalist said Revolut stands a fair chance of success in the U.S. owing to the relatively low penetration of digital banks in this country, and to Revolut’s innovative products that are popular with customers.

“They’re hard charging and get shit done,” he said.

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