(Bloomberg) -- Revolut Ltd., one of the UK’s fastest-growing startups, is betting it can sustain its breakneck pace in Asia, even as it comes under greater scrutiny from regulators at home and abroad.

Months after a run-in with Japan’s financial watchdog, the fintech startup is now in talks about the regulatory approvals necessary to service small-to-medium-sized businesses in the world’s No. 3 economy next year, according to founder and Chief Executive Officer Nik Storonsky.

Revolut, which was valued at $33 billion in its fundraising round last year, is targeting Japanese exporters looking to cut international money transfer fees in a country that still lags behind in cashless payments. It wants to reach a million users in Japan -- a key step to hitting a target of at least 10 million customers in Asia by end-2025. The company says it now has about 80,000 users in Japan and 600,000 users in all of Asia.

“From a competition point of view, Japan’s a very attractive market,” Storonsky said in an interview with Bloomberg News in Tokyo. The country’s top banks “don’t really provide modern services.” Cashless payments comprised 30% of all transactions in Japan in 2020, compared with 94% in South Korea and 56% in the US, according to the Payments Japan Association.

So far, the seven-year-old app has been off to a rocky start in a country whose complicated regulations have flummoxed new and old financial players alike. 

Japan’s Financial Services Agency slapped Revolut’s 40-person local unit with a business improvement order in September, saying there were “serious problems” in its control measures. The unit outsourced many of its services such as transaction verification to the parent company, was unaware that such services were then outsourced further and was unable to provide oversight, the administrative order said. 

Revolut now has increased checks to make sure that it meets compliance requirements in each country in which it operates, Storonsky said. In Japan, Revolut plans to add 10 more people over the next year. About half of its existing staff in Japan is now devoted to risk and compliance, according to Storonsky.

“Every single country was quite ad hoc. And when things are ad hoc, certain things are being missed,” Storonsky said of the firm’s early days. “But now, launching in a country is a much more robust process.”

Calling Asia “a huge opportunity,” Storonsky said the company helps customers save money with its cheaper fees and instant peer-to-peer money transfers. The one million target for Japan -- where it went online two years ago -- “is definitely possible if you look at the trajectory in Europe,” he said. 

Launched in 2015 as a prepaid card offering cheap foreign-exchange fees, Revolut says it now has 25 million customers, primarily in Europe, with a goal to grow four-fold in three years. In the Asia-Pacific region, Revolut operates in Australia and Singapore and is considering expanding into New Zealand, India and the Philippines.

Backed by SoftBank Group Corp.’s Vision Fund 2, which holds a roughly 2% stake, Revolut has no immediate plan to go public or raise money, as the business turned profitable last year, Storonsky said. 

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