Global payments and currency exchange service Revolut has for the first time launched its services in New Zealand – four years after its official debut in Australia – promising a shake up of NZ’s banking-domimated forex sector that would “increase consumer choice and drive market competition”.

Revolut’s all-in-one forex transfer and money management app boasts real-time, low-fee foreign currency exchange, a peer-to-peer payments capability, and various money management features.

More than 26,000 New Zealanders were placed on a waitlist to join the Revolut platform, the fintech revealed, which was tested for 12 months before its official debut this week.

Through the platform, Kiwis will be able to send and spend money in more than 200 currencies, of which five – NZD, AUD, GBP, EUR, and USD – they can hold on their Revolut digital wallet.

Primarly targeting travellers, Revolut promises NZ customers foreign exchange at interbank exchange rates for up to NZ$2,000 each month.

Transfers to AUD, GBP, USD, EUR, and CAD from a Revolut NZD wallet, for instance, will incur a 0.30 per cent fee of the total value of the transfer (to a maximum of $45NZD). For a less traded currency, like the Brazilian Real, the fee incurred is 1.00 per cent.

By comparison, Revolut states, NZ’s major banks charge on average between 3 per cent and 4 per cent on individual remittance transactions.

In 2022, Kiwis spent upwards of NZ$ 1.4 billion on personal remittances. Based on the average fee rate charged for these transfers, this amounts to around NZ$43.2 million in fees.

Revolut notes that it does not charge monthly fees for its service. Australian consumers do, however, currently have the option of a ‘Premium’ subscription service, providing, for a $9.99 fee each month, higher foreign exchange limits. A new ‘Metal’ plan also offers 1 per cent cashback and an 80 per cent reduction in forex fees.

Kiwi users are also limited to up to $350 NZD in free ATM withdrawals per month. After this, a 2 per cent fee will be charged on the value of the ATM withdrawal.

The Revolut app also boasts features including instant notifications, budgeting assistance and a card payments round-up tool which automatically transfers spare cents into a transaction account.

Users can also make free peer-to-peer payments and payment requests, as well as split group bills, such as utilities or restaurant bills, through a ‘split the bill’ feature.

Revolut, which is headquartered in the UK, said it has commenced the hiring of a dedicated local team in NZ to support its expanding product offerings, including in wealth and trading.

Matt Baxby, Revolut Australia & New Zealand chief executive, said the fintech’s latest overseas venture would offer New Zealanders “a seamless and affordable global money management experience, secure budgeting and analytics features and advanced physical and digital card control capabilities, in one seamless location”.

“We are excited to not only empower Kiwis with greater financial well-being, control, convenience, and transparency, but also increase consumer choice and drive competition across the financial services sector in New Zealand which has traditionally been underserved”.

Revolut boasts that more than 30 million customers around use its products to make more than 400 million transactions a month.

Regulated, but without a banking licence

Revolut notes that it is a registered financial services provider and a member of NZ’s Financial Service Complaints Limited, and as such adheres to regulatory requirements, including Anti-Money Laundering (AML) and Know Your Customer (KYC) protocols.

It adds that is had worked with local industry bodies, including Fintech New Zealand, Consumer New Zealand and Payments New Zealand and local regulators “to ensure the product meets the needs of Kiwis and satisfies all regulatory requirements”.

However, the fintech currently operates without a banking licence (or ADI) in NZ and Australia (despite holding an Australian Financial Services Licence and Australian Credit Licence), meaning that customer funds lack direct protection of a government guarantee in either jurisdiction.

Like in Australia, NZ customers’ funds are effectively held in trust, backed through deposits in regulated local banks.

Revolut is currently awaiting a decision on its application for an ADI licence from Australian banking regulator APRA.