Revolut, a London-based fintech company, has reportedly suffered a $20 million loss due to fraudulent activities resulting from a flaw in its payment systems. The security incident occurred over a period of several months and was linked to a discrepancy between Revolut’s payment systems in Europe and those in the US.
Sources familiar with the matter revealed that unsuccessful transactions were being refunded to customer accounts due to the technical issue, which allowed fraudsters to exploit the situation. Organised criminal groups took advantage of the flaw, encouraging users to initiate large transactions that were likely to be declined. The funds involved in these transactions were then withdrawn from ATMs and covered by Revolut from its corporate accounts.
The problem came to light when one of Revolut’s banking partners in the US alerted the company about erroneous account balances. Upon discovering the issue, Revolut transferred funds to its US subsidiary to offset the losses. The technical flaw was subsequently addressed in the spring of 2022.
Revolut, which is currently expanding its services globally, recently launched operations in New Zealand, marking its entry into the region. The company’s financial services app aims to provide users in New Zealand with access to foreign currency exchange services, peer-to-peer payments, and more.
Matt Baxby, CEO of Revolut in Australia and New Zealand, expressed enthusiasm about the launch, highlighting the benefits of a seamless and affordable global money management experience for Kiwis. Revolut has also introduced robo-advisors for its US users, offering automated and personalised investment advice through algorithms and computer programs.
In addition, Revolut has been pursuing a banking license in Australia and launched business accounts in the country. However, the company is still awaiting a banking license in the UK, despite submitting an application in 2021.
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