The Revolut Innovation Series [Part 4] Designing a business model for growth and profit
The Revolut Innovation Series [Part 4] Designing a business model for growth and profit

The Revolut Innovation Series [Part 4] Designing a business model for growth and profit

Numerous business models change the way companies create value and get paid for it. Google and Facebook disrupted the world of advertising. After having completely transformed the taxi and vacation rental models, Uber and Airbnb became the flagships of the sharing economy.

Just like Amazon revolutionized the way we shop, Revolut has forever changed the way we handle money. The final part of our Revolut Innovation series highlights how the Amazon of banking has innovated its business model reaching 10 million users, achieving $800 million in venture capital and 58.24 million GBP in revenue (in 2019).  Included is the special BottomUp Skills podcast episode uncovering how Revolut laid out its business strategy for growth and profit.

#1 Removing the middleman from their infrastructure

By applying vertical integration, Revolut removed any intermediaries from the equation. All services – core and adjacent are run, built, deployed, and managed internally. Without any dependency on third-parties for service provisioning, the effort is exponentially reduced in the back office and on the bottom line.

For most banks out there, this scenario is very much impossible because core banking systems are a heavy legacy. Revolut is free from legacy systems, and this is one of their unfair advantages. Whatever they want to change in their product, they can do it quickly and cost-effectively.

“Effectively when you run all the infrastructure in-house, you can make money out of this business, and the business becomes quite profitable.”


– Nikolay Storonsky, CEO of Revolut

What’s more, Revolut has created an unfair advantage with an exponential effect. By cross-selling to customers, without any legacy systems and third-party dependencies, their profit gets even bigger.

#2 Creating an abundance of revenue streams

Revolut is more than a savings solution. They’ve built several revenue streams from:

  • Subscription revenues from 2 types of consumer plans;
  • Transaction fees for every successful physical card transaction;
  • International money transfers with a 0.5 % fee applied to transfers over £5,000;
  • Perks for customers who pay with the Revolut card at their selected partners;
  • Travel and device insurance;
  • Trading – you can buy or sell stocks from various companies via Revolut Trading LtD;
  • Loans & overdrafts from £500 to £25,000 with repayment options from 12 to 60 months;
  • Business accounts for businesses and freelancers, including an expense management tool to manage employee spending, bulk payments, Open API to connect to accounting software, and many more.

Apart from getting a cut from each stream, their revenue increases even more because they own their infrastructure and they don’t need to split the money with any third-party.

#3 Creating a viral experience

Status is one of the key drivers of all consumer behavior. In the new economy, people are turning to rewarding experiences that show off their status. When you pay for the Revolut product, you get a sleek, metal card that comes with a bunch of perks.

Revolut offers customers not only a product worth paying for, but also a status symbol. It marks them out as special and they will gladly share their experience with anyone – especially with those who do not own a Revolut card just yet. This organic product virality fuels an accelerated rate of adoption, which naturally increases promotion and profit. No paid campaigns needed. Just a natural, simple, rewarding experience.

To sum up, Revolut started by providing the product for free, then they began cross-selling other services and kept adding new features in order to have large customer numbers. Their main focus is to expand globally, and becoming profitable is not a priority for the time being. However, the strategy to eventually turn a profit is strongly laid out by a product worth paying for, a “hard and fast” working culture, an embedded sharing experience, and a turbo-charged business model.

To gain free access to the end-to-end case study on the Revolut innovation, which inspired our 4-part series, you can sign up to BottomUp Skills.

About BottomUp Skills

BottomUp Skills is the e-learning platform created and supported by the QUALITANCE global thought-leadership team for innovators, makers, and creatives who want to sharpen their skills in innovation, design thinking, and technology. Usually, such courses are exclusive to our clients such as Ford Motor Company, News Corp Australia, Breville, and many others around the world. Now, we have opened the paid subscription courses and made them available to everyone for life.