Robinhood charges for speed, India gives it free: Nithin Kamath drops a brutal reality check

What if your broker made $100 million—just from letting people take their own money out faster? That’s exactly what Robinhood is on track to do, thanks to its 1.75% fee on instant withdrawals. And to Zerodha co-founder Nithin Kamath, it’s both a masterclass in monetization, and a sign of just how broken the U.S. banking system still is.

In a LinkedIn post, Kamath shared his reaction after discovering that Robinhood could generate $150 million (~₹1,300 crore) in revenue this year from just one feature: instant withdrawals. With processing costs of around $35–40 million, that’s a clean $100 million profit—no trading, no advisory, just moving money faster.

“I’m still shocked that people pay 1.75% on an instant withdrawal transaction,” Kamath wrote. “This really shows how broken the US banking system is.” Despite being a tech-forward market, the U.S. in 2025 still doesn’t have a true instant payments backbone like UPI—most transfers take 1–3 days.

In contrast, Kamath pointed to India’s radically different approach:

“We don’t charge Zerodha clients for deposits (thanks to UPI) or instant withdrawals. We’ve processed over ₹50,000 crore in instant withdrawals in less than 2 years—at zero cost.”

The Robinhood model, while profitable, reveals a larger gap in infrastructure—and how fintechs monetize around it. Where Indian startups focus on efficiency, U.S. platforms are monetizing friction. Kamath noted that Indian founders often look at these non-core revenue streams—loans, insurance, payments—with envy, but few manage to crack them.

And while Robinhood customers pay up for speed, Indian users have come to expect real-time, zero-cost transfers as standard. “It just shows how far behind India is compared to the US,” Kamath said—not in tech, but in what customers are willing to pay for.