Revolut under pressure in Hungary: demands for ATM access in remote areas, fintech called 'a free-rider'

Hungary’s Orbán-led government recently changed the Constitution to grant access to cash for all citizens, introducing a new measure that forces banks and other financial institutions to set up ATMs in most villages to make access to cash more “equal.” This means banks should set up a common fund to finance the ATMs, which is totally independent of whether or not these machines would be used.

And this is where the distortion of competition starts. Revolut does not contribute to the fund as it does not place ATMs or run country-based branches. Hence, the Hungarian Banking Association and other financial experts have labeled the fintech company a “free rider”:

“If Revolut were a Hungarian bank, it would have to install 826 ATMs in Hungary, based on the number of bank cards issued. The neobank may see it as a stowaway when its domestic competitors are forced by the government to develop their ATM network in unprofitable neighborhoods, thus undermining fair competition.”

Innovative fintech is not a "free rider"

Labeling Revolut a "free rider" ignores the benefits that fintech companies have brought consumers: low fees, innovative and user-friendly solutions, fast transactions, and international usability. Its advantage over traditional banks is precisely that it does not invest in physical infrastructure but serves consumers digitally—which is why they choose it.

Revolut has been doing well in Hungary so far: there are around 2 million Revolut users in Hungary today—more than 20% of the population. One in five people prefer Revolut to traditional banks—banks that are significantly owned by the state.

So, the competition is not just between banks and fintech companies but also between market players and state-funded institutions. In this situation, any regulation that imposes an artificial burden on market players distorts competition and puts the state's interests ahead of consumer interests.

Political profiteering:  the consumer pays

The Hungarian Banking Association is understandably unhappy about the forced burden sharing. Still, its reaction is also problematic: instead of criticizing the government's market distortion, it proposes that Revolut should contribute to the costs - even though it has nothing to do with this infrastructure. The  association claims: 

“Foreign-based financial service providers that provide a bank card to account holders resident in Hungary must participate in this social function without discrimination.”

This is nothing other than an anti-market transfer of the expenses to an operator that can offer better services precisely because of its efficiency.

The association is joined by Minister of Nation Economy Marton Nagy, who has just expressed his wishes, saying:  

“Anyone who holds an account for residents must ensure access to cash.”

The political motives behind the decision cannot be ignored: a significant part of Fidesz's voters live in small villages, precisely where the new ATMs will be installed.