Revolut: a Quiet Revolution in the Financial Industry. Payment Systems Are Leaving Ukraine

On December 22, the British neobank Revolut announced the termination of services for Ukrainian users. Clients were given two months to withdraw funds, after which the accounts would be closed.

With approximately the same text of announcements of this event, various media sources drew a line under a rather interesting and productive period of Ukraine’s financial life. Wise, Stripe, PayPal, Paysera, Ducascopy and other payment financial systems are also leaving (being pushed out) from the domestic financial market.

The example of Revolut is indicative. As a financial startup, Revolut appeared in 2015 in London, co-owned by Ukrainian Vlad Yatsenko from Odesa region. In 2021, Revolut became the most expensive startup in Britain, attracting $ 800 million. Currently, Revolut’s services for Ukrainian citizens are provided by the Lithuanian company Revolut Bank UAB, whose work is regulated by the European Central Bank and the Bank of Lithuania. At the beginning of the war, Revolut became the first international financial platform that allowed opening accounts with a Ukrainian passport, a Ukrainian address, and connection to local cards. It also became the first international bank that allowed confirming identity and logging into the application through “Diia”.

For individuals – tax residents of Ukraine, this story, at least in relation to Revolut, is over. There are still several tens of thousands of its Ukrainian clients who have temporary protection, a work or study visa, a tax number in the country of residence, and a confirmed local address. All of them can continue to use Revolut, provided that all KYC requirements are met.

Without analyzing the entire history of Revolut’s entry into the Ukrainian market, it is worth considering several points that are also characteristic of other payment systems. Revolut provided financial services to Ukrainian citizens abroad and was preparing (or at least it so announced) to obtain a financial license in Ukraine. In turn, the National Bank of Ukraine stated in its information letter: “…any company that intends to provide financial services to residents of Ukraine must undergo an authorization procedure in accordance with the requirements of Ukrainian legislation…” This statement is quite dubious, from it we can conclude that when a citizen of Ukraine wants to open an account in a foreign financial institution, such a financial institution must first obtain permission from the NBU. According to this logic, UBS, PKO Bank Polski, Deutsche Bank, etc. must also undergo such a procedure. The same NBU information letter further states: “…at the same time, Revolut will continue to service accounts of Ukrainians residing and officially registered in the countries of the European Economic Area.” However, the NBU’s public actions are already having negative consequences for this category of Revolut clients. In EU countries, Ukrainians have begun to receive requests from Revolut to confirm their tax resident status in the country of residence, provide a local tax identification number — Tax ID, and confirm their address of residence with relevant documents. In case of delay in providing information, accounts will be temporarily blocked.

There is still a certain “trail” of competitive jealousy in this Revolut story. Some financial analysts recall a quote by Oleh Horokhovskyi, co-founder of the Ukrainian monobank: “We would be happy to see Revolut in Ukraine, but it must be done with respect for Ukrainian laws. Such “market entry” would be impossible anywhere else in the world. But what can we say, they did not let us into Poland at all without any reason, and here Revolut behaves as if Ukrainian laws do not deserve any attention at all.” Later, he wrote in one of the messengers: “Some “experts” believe that I closed them. In principle, if it’s convenient for you, blame everything on me.”

By the way, for those who still want to work with the money of Ukrainian residents, the NBU reported that “…the issue of starting a foreign player’s activity in the Ukrainian banking market is also the subject of consultations with the banking supervision authority of the country of origin of such an entity.” Translated into human language, this means: if another payment system wants to enter the Ukrainian market, we will hold such consultations with its financial regulator that it will lose its local licenses.

For some reason, publications on this topic do not mention another obvious consequence. The users of payment systems, among individuals, are overwhelmingly IT specialists, various old-timers, freelancers, consultants, sole proprietors with foreign clients. If they work in Ukraine, they will be forced to receive foreign currency earnings into accounts in Ukrainian banks. It is no secret that previously some part of such income was not declared. Now the cost of their work/services will increase not only by the amount of bank tariffs, exchange rate differences, but also by the amount of accrued taxes.

So, neobank payment systems close the door for those who do not have some kind of European residency and tax status. Revolut and Wise are leaving Ukraine, PayPal operates with restrictions, Stripe requires registration in the EU. What alternatives remain?

Firstly, you can still count on other payment systems for some time: American Payoneer, Polish ZEN.com, Lithuanian Paysera, etc. They have optimal-minimum options: remote account opening, multi-currency accounts, virtual cards, relatively acceptable tariffs. Additional bonuses are possible; for example, Payoneer has its own acquiring, while the entire financial cycle of freelancers/merchants on Amazon or Airbnb resources takes place without additional integrations.

Secondly, there is cryptocurrency. It can be opened through physical exchangers, online services, or simply from a bank card – directly on the exchange. You can replenish your account from a bank card, and then withdraw funds back, also to the card. Transfers between accounts within the exchange take place in a matter of minutes, so it works as an alternative to classic banking transactions. Additionally, crypto wallets, which are an alternative to exchanges for those who want to store and transfer cryptocurrency without intermediaries, give full control over funds without being tied to a platform. There are no limits, no bank checks, only a private key and a network connection. Still, it should be taken into account that in 2026, European initiatives will be implemented in the field of automatic exchange of information regarding crypto-assets. 69 countries, including Ukraine, have committed to introducing a crypto-asset reporting system (CARF – Crypto-asset Reporting Framework) by 2027-2028. In Europe, this standard will come into effect from January 1, 2026 on the basis of the DAC8 directive. This means that by 2028 at the latest, information on all transactions with virtual assets will be subject to the same automatic exchange as is currently the case with information on bank accounts in order to prevent tax evasion.

And just for the sake of statistics, there are options for solving the issue of the movement of funds without internal Ukrainian restrictions – registration of a self-employed individual (analogous to an individual entrepreneur) with Estonian e-residency. But it should be noted that e-residency does not automatically mean tax residency, which is confirmed by staying more than 186 days/year in the territory of Estonia. In other words, if the payment system meticulously analyzes the confirmed fact of tax residency and physical stay outside Ukraine, then the whole “legend” will crumble.

Finally, there is the usual solution: “as it is written, so it is read”. Close an account in the payment system, open an account for your individual entrepreneur in a Ukrainian bank, the terms and rates of which suit you, and pay taxes depending on your group. After all, why not?

Volodymyr Harkusha,

Auditor

Managing Partner of K.A.C. Group