The news: Revolut is adding to its US products lineup with a feature in its app that enables remittances to and from Mexico.
The UK-based neobank is aiming to enter a cross-border payments market between the two countries that saw a 31.0% surge in May and hit a monthly record of $4.52 billion, per research from BBVA. The company’s prospective customer base includes migrants from Mexico who are residing in the US and sending payments back to their families.
More on this: For its new feature, the neobank charges a percentage-based transaction fee of 0.30%, which is set within a fixed range: Users will pay at least $0.30 but no more than $6.00 per transaction. Revolut says that it’s competitive with fees assessed by other companies, pointing to charges that can reach 11%.
Customers will not be hit with FX fees if they stay within their free allowance limit, and their transactions will use the interbank exchange rate, the neobank noted. However, recipients may still have to pay fees to their beneficiary banks.
Signing up for the remittances feature takes just a few minutes and payments will typically be made within a single working day. To successfully receive payments, Mexican recipients need an updated tax identification number, as well as an updated Clave Única de Registro de Población (CURP), which is a government-issued identity code.
The cross-border product will help build Revolut’s US brand awareness, Revolut USA CEO Ron Oliveira told Insider Intelligence. The company hasn’t made a big marketing push since its US launch in March 2020, Oliveira noted, describing its initial move as “a quiet launch.”
However, Revolut has planned a US marketing push in the future. Oliveira noted that the neobank will “get very aggressive in the fourth quarter of this year.”
The opportunity: Revolut’s remittances launch is effectively a prelude, helping to build brand awareness and attract US users to the neobank’s platform before the company makes a broader entry into Latin American countries.
The neobank said that it’s eyeing Mexico and Brazil, with a head of operations already hired for the latter market. The company also intends to hire country CEOs for both markets and a general manager for Mexico, Oliveira said.