British fintech Revolut is debuting in India with a rather blunt message for the country’s traditional banks: “Your move.” Cross-border payments cost too much, and the spread-heavy charges are “criminal” if you live in India, according to its India head. The company believes that Indians collectively lose hundreds of millions of dollars a year to inflated foreign exchange markups and ancillary banking fees — and it wants to win users by clawing those costs back using transparent pricing and mid-market exchange rates.
Why Foreign Exchange Charges Still Sting Indian Consumers
Revolut estimates that about $30 billion is spent by Indians abroad each year and that they lose approximately $600 million in bank charges. That pain is felt in many places: wide conversion spreads (far above the interbank rate), per-transaction fees for international cards and taxes piled on top of forex conversion charges. RBI data on the Liberalised Remittance Scheme reveals that outward remittances have been over $30 billion in recent fiscal years, highlighting how much can be at play when fees drift a few percentage points away from the mid-market rate.
Consider a typical example. A student wiring money to pay for $1,000 in tuition might be hit with a 2.5%–4% currency markup plus fixed processing fees and any related taxes. That’s enough to add an extra ₹2,000–₹4,000 for each transaction. Multiply that across regular international spends — on subscriptions, travel, overseas education — and you can see why consumers react with frustration to bank-led forex pricing.
Regulatory Moat and Product Stack for Revolut in India
Revolut has been building out regulatory groundwork to operate in India for years rather than riding on a bank partner’s rails. It bought Arvog Forex to obtain a foreign exchange licence and, more importantly, obtained an authorisation for a prepaid payment instrument from the Reserve Bank of India. That allows Revolut to issue prepaid cards in both countries, support a full-fledged wallet and integrate natively with the Unified Payments Interface — which includes having its own UPI handles.
The first version of the product is designed for a cross-border experience that consists of:
- Domestic Visa card and international multi-currency Visa card
- UPI-enabled wallet
- Same-day remittances through a local bank partner
- Budgeting features that show spending across categories and currencies
The company is also working on kids’ and teens’ accounts attached to a parent’s profile, a play it has employed in other markets to help embed usage throughout the family.
Compliance is a point of distinction. Revolut says it will enable the onboarding of only full-KYC wallets, conducting checks that include Aadhaar and video verification along with screening against global sanctions databases from bodies such as OFAC and the U.N. That decision will slow sign-ups compared with lighter-touch competitors, but the company argues that it will draw a denser pool of users who transact more frequently and across borders.
Behind the scenes, Revolut has also localised its tech stack to comply with India’s data sovereignty norms and made a substantial investment of tens of millions of dollars to set up its operations. The company already has thousands of workers in India — the biggest number of any country — and intends to expand that as its product line-up does.
Taking On The Spread With Transparent Pricing
Revolut’s pitch is straightforward: use near mid-market FX rates, be upfront about fees and dispense with blended bank pricing.
For cross-border card spends, that is the difference between a 0.5%–1% fee footprint and the 3%–5% consumers typically encounter once bank spread, card network fees and conversion taxes are added up. In its Remittance Prices Worldwide reports, the World Bank has long pointed to the spread between interbank rates and end-user costs — something that India’s mass of global consumers face every day.
Revolut’s India lead has described the prevailing charges as “criminal,” and although that’s rhetorical, it articulates a consumer frustration that banks have been unable to rebut: a lack of clarity over what share of the bill represents spread and how much is fixed fee. UPI may have made domestic payments virtually free of cost, but international usage continues to be a sore spot where banks depend on fee income and wider spreads to make money.
Competition and constraints in India’s cross-border market
Revolut will not be alone. Fintechs like Niyo, Scapia, Fi and BookMyForex have specialised in travel cards and remittances while global players such as Wise have conditioned users to expect interbank rates accompanied by line-item fees. Banks still have important advantages: deep compliance infrastructure, Category I authorised dealer status and large treasury operations that can price risk aggressively.
Regulatory guardrails are going to dictate how fast Revolut can move. And the funds for outward remittances ultimately travel via licensed banks, while tax-collection-at-source rules on overseas spends add another layer of hassle for consumers and providers. However, RBI pushing for data localisation and strong KYC does resonate with Revolut’s full-stack approach and may end up favouring players that invest in compliant operations rather than potential quick fixes via partnerships.
What success looks like for Revolut in the Indian market
Revolut is aiming for over 150 million digitally native Indians who travel, study, shop and invest overseas. Internally, it is prioritising “depth of use” and profitability over raw downloads, with a wait list reportedly in the hundreds of thousands. The company’s goal is to onboard tens of millions in the next few years and process billions of dollars’ annual transactions as it scales.
If Revolut can provide FX at the mid-market rate, with instant onboarding and full KYC and UPI-first convenience (RTGS/NEFT/UPI), it will force the discussion to be repriced — rather than passively seeing about 1% in bid/ask in cross-FX or waiting five days to take a passport down to your branch, for example. It is one that banks have largely been able to avoid when it comes to international repatriation. Even small share gains in outbound spend could yield meaningful savings for consumers on fees — and an early sign that the era of opaque forex markups in India is finally under threat.
