Revolut secures $110 million capital to operate in Mexico

Fintech giant Revolut has acquired a banking license in Mexico in major step expand its presence within Latin America’s second-largest economy.

In a press release, the UK challenger bank revealed plans to operate as a multiple banking institution in Mexico, following approval from the country’s National Banking and Securities Commission (CNBV).

With a global customer base exceeding 40 million, Revolut’s entry into the Mexican market is part of its strategic plan to broaden its footprint in key regions for international expansion. The company has been actively pursuing regulatory approval since 2021, a process that involved hiring former RappiPay executive Juan Miguel Guerra to lead its Mexican operations.

The banking license will enable Revolut to offer a suite of financial products and services to Mexican consumers, including cross-border remittances. Remittances is a critical component of Mexico’s economy, having soared to a record $63.3 billion in 2023, which offers huge market potential for Revolut’s services.

As part of the regulatory process, Revolut is preparing for a third-party audit by Mexican authorities. The fintech will initially focus on launching money transfer services, with plans to roll out an extensive range of financial offerings subsequently.

To meet CNBV’s regulatory requirements, Revolut had to secure a decent starting capital of roughly MXN 1.44 billion ($88 million). The figure was later adjusted to MXN 1.81 billion ($110 million) ahead of its operational launch.

Mexico will join a list of 41 other countries where Revolut currently offers its money transfer services free of charge. The company will compete with Grupo Financiero Banorte, one of Mexico’s largest financial institutions, which recently introduced a new digital bank named bineo. It plans to expand its customer base by adding 2.8 million new clients over the next five years.

Banco Banorte GFNORTEO.MX, part of the Grupo Financiero Banorte, currently serves 12 million clients and ranks as the second-largest bank in Mexico by credit portfolio size. The group’s president Carlos Hank hoghlighted in a Reuters interview the growing demand for entirely digital banking services among their clients.

Revolut’s expansion into Mexico follows its recent entry into Brazil, as part of the company’s broader strategy to establish a strong presence in the Americas. Potential customers in Mexico are currently invited to join a waiting list for these services, with the company signaling an imminent operational launch in the near future.