Free Trading App Robinhood Sets Sights On Britain

Robinhood, the investment app that upended its market by elimination of commissions on stock trades is bringing its brand of disruption to the United Kingdom.

The UK launch is anticipated for early this year since it has obtained regulatory approval. Since November 2019, about 60,000 UK users have signed up for the service, according to the Financial Times Thursday (Feb. 6).

“Robinhood made money and picked up business without focusing on the rules,” said Tyler Gellasch, executive director of trade association Healthy Markets Association in a statement. “As they grow and that comes to an end, they will just become another brokerage.”

The broad consumer appeal of free trading compelled the 2015 launch of Robinhood. It chiefly attracts millennials interested in trading stocks and cryptocurrency. In the United States, by 2016, it grew to 1 million subscribers and 6 million by October 2018. As of December of 2019, Robinhood is now at 10 million subscribers.

Robinhood declined to comment about the imminent UK expansion.

Late last year, Robinhood began offering a cash management service.

“Our entire business was built knowing we weren’t going to be charging trading commissions,” said Co-CEO Vlad Tenev. “We’ll still have existing revenue streams, and, in addition, we’ll add revenue from interchange on debit card transactions. As we launch even more products covering even more needs of customers, that revenue stream will continue to diversify.”

The Robinhood cash management feature is offered in partnership with a bank, and includes debit cards, and, critically,  deposits backed by the Federal Deposit Insurance Corporation (FDIC). Earlier last year, Robinhood debuted a checking and savings product that did not have a bank partnership and ultimately was not successful.