The United States-based zero fee trading app, Robinhood revealed its plans of expansion. The company is eying on the United Kingdom and has already started the recruitment.
According to a recent report by Techcrunch, Robinhood has plans to open an office in London. The company is planning to hire the employees before its U.K. launch. The fintech giant is quietly hiring to fill the positions for operations, marketing, public relation, customer support, and others in the city. Robinhood is also recruiting executives for product and compliance positions. It is a wise strategy for the company which is planning to get multiple licenses from the financial watchdog of the United Kingdom, the Financial Conduct Authority (FCA).
Robinhood is a financial services company which is headquartered in Menlo Park, California. The company offers Robinhood smartphone mobile app which allows the users to invest in publicly traded companies and exchange-traded funds listed on the United States stock exchanges. Robinhood does not charge any fees from the users, the company makes money from interest earned through users’ cash balance and margin lending. The company is currently valued at $5.6 billion.
Last month, the company launched a saving and checking account for its U.S. users. The company offers a fee-free, commitment-free, and surprise-free account which pays the users 3% interest for every deposit the user made into the account. In a blog post, the company said that,
“Currently, traditional checking and savings accounts cost more for people who make less, are riddled with unfair and hidden fees, and earn you minimal returns on your savings. We believe you should earn more on your money, and shouldn’t be charged fees to access it.”
The newly launched account will come with a debit card which will be personalized and can be used at over 75,000 ATMs across the United States for cash withdrawals.
In the U.K., Robinhood has to compete with the similar fintech startups which have won the heart of the U.K. traders by offering “fee-free” trades. Robinhood has also followed the same strategy in the United States by offering zero fee trades. United Kingdom-based company Freetrade also follow the same strategy and offers fee-free trades which are executed at the close of business each day. For instant execution of the trade, the company charges £1 per trade.
Another company which is the competitor of Robinhood is Revolut. Revolut is a London based fintech startup which has recently announced its plans to offer commission-free trading to its users via its banking app.
It will be interesting to see how these companies will compete with each other. The success of fee-free trades has motivated the new platforms in the United Kingdom to launch their fee-free platforms.