In a country where mobile payments are dominated by some of the world’s largest Financial Services Companies, the last thing you would think of is the entrant of a relatively young challenger bank. But Revolut might prove us all wrong! So let’s take a deep dive into Revoult’s reported expansion into China.
Revolut took the FinTech community by a storm when they published that they are seeking a “head of operations” in China. In their vacancy, Revolut listed:
“looking for strong players to lead their mission as we continue to expand into the Asia-Pacific region”.
The challenger’s expansion into China, kicks off an ambitious process that requires approval from Chinese regulators to enable them to operate in the country.
This is an interesting market entry, especially considering that Alibaba and Tencent alone control over 90 percent of the Chinese mobile payments market. Not to mention that China has launched a central bank digital Yuan which could further fuel the competition in payments.
This has left many payments enthusiasts wonder how Revolut plans on stand out in China’s unpredictable payments market. Revolut’s CEO is clearly aware of this as he recently emphasized that China is extremely competitive and it will probably require a lot of investments.
That being said, Revolut has proven to be bulletproof in a highly competitive yet young digital banking landscape. The business has attracted 15 million customers, nearly the size of the Irish and Greek populations combined. Not only that, but Revolut is one of the few challenger banks that broke even in 2020 despite immense losses in 2019.
While the Chinese payments market is very competitive, we believe that the Chinese government is ready to give Western payments and FinTech companies a go, with founders pointing to PayPal becoming the first Western business to gain a local banking licence in 2019 as a key milestone. But.. these two are not the only Western FinTechs to expand into China, the CEO of Checkout.com also mentioned that he opened a Hong Kong office a while back already in preparation for eventual expansion into the country.
We are interested in seeing which market Revolut plans on targeting and how it will be perceived by the Chinese population.
To conclude, the Chinese market remains extremely competitive, but the government is showing signs of embracing Western financial services firm. Revolut’s market entry just highlights the window of opportunities that lie within the region. Do you think Revolut will succeed in operating in China?
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