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Revolut’s US payment flaws allowed thieves to steal $20mn

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Summary

Revolut has faced a major security breach in their US payment system, resulting in over $20 million of their funds being stolen. The incident has not been publicly disclosed yet, and has caused further pressure on the highly valued fintech company. The problem was caused by differences between US and European payment systems, where certain declined transactions resulted in Revolut erroneously refunding accounts, leading to the theft. The company was able to recoup some of the funds, but the total net loss was $20 million. Revolut has also faced other issues, such as a qualified audit from BDO and a delay in obtaining a banking license in the UK, in addition to senior departures.

Q&As

How much money did thieves steal due to a flaw in Revolut’s US payment system?
Thieves stole $20 million due to a flaw in Revolut’s US payment system.

What prompted Revolut to close the loophole?
A partner bank in the US notified Revolut that it was holding less cash than expected, prompting Revolut to close the loophole.

What caused the problem in Revolut's payment system?
The problem stemmed from differences between European and US payment systems, which meant that when certain transactions were declined Revolut would erroneously refund accounts, handing them its own money.

How has Revolut's valuation been impacted?
Revolut's valuation has been slashed by 40% and 46% respectively by venture capital firm Molten Ventures and asset manager Schroders.

What is the status of Revolut's UK banking license application?
Revolut is still awaiting its banking licence in the UK, more than two years after first announcing its application.

AI Comments

👍 It is impressive that Revolut was able to close the loophole to prevent further thefts and recoup some of its losses.

👎 Revolut's payment system flaw has caused a great financial loss and disruption to the company, which is concerning and concerning for its customers.

AI Discussion

Me: It's about Revolut's US payment flaws that allowed thieves to steal $20 million. It's a big issue, and it could have an impact on other fintech companies as well.

Friend: Wow, that's a lot of money. What implications might this have?

Me: Well, it could mean that the company will face more pressure from regulators, investors, and customers. It might also make other fintech companies more cautious about their payment systems, which could lead to more stringent security measures. In addition, it could lead to more public scrutiny, as well as potential legal action against Revolut for the theft.

Action items

Research the differences between European and US payment systems to better understand the loophole that was exploited.
Review your own payment systems to ensure that similar loopholes do not exist.
Stay up to date on the latest news and developments in the fintech industry to ensure that you are aware of any potential risks.

Technical terms

Revolut: A digital banking app that allows users to manage their finances, make payments, and transfer money.
Fintech: Short for financial technology, fintech is the use of technology to provide financial services.
BDO: BDO is an international network of public accounting, tax, consulting, and business advisory firms.
ATMs: Automated Teller Machines (ATMs) are machines that allow customers to withdraw cash from their bank accounts.
Valuation: The process of determining the current worth of an asset or company.
Checkout.com: A payment processing platform that enables businesses to accept payments online.