Revolut, PayPal and other: what are they getting out of banking license?

Just a few years ago, fintechs universally prided themselves on not being banks. They were faster, cheaper, free from legacy systems and regulatory burdens, and this made them attractive to both individual customers and businesses that often need quick solutions without compliance delays. Today, the same companies are queueing for banking licenses, particularly in the U.S., and this queue is rapidly growing.

In 2025 alone, the OCC received 14 applications for new banking charters — nearly as many as in the previous four years combined. And in just the first two and a half months of 2026, the regulator approved four new applications and received over seven more. Revolut, PayPal, Affirm, Circle, Ripple, and even Ford and General Motors are standing in this line.

What has changed, and why have all fintechs suddenly wanted to become banks?

Let’s figure it out today.

Why Banking License Matters?

A straight logical question that clients immediately ask themselves: what exactly are the benefits for fintechs in obtaining a banking license? Why has their rhetoric shifted from an agile approach to a regulated one?

The reason may seem mundane to many, but essentially, it comes down to operational costs and securing the profits. Operating without a banking license, a fintech is forced to build its product on top of someone else’s infrastructure. This creates the need to account for additional expenses for maintaining external agreements and fees. For example, Revolut currently provides banking services in the U.S. through Lead Bank in Kansas City, allowing it to offer accounts and payments, but under bank’s name.

In addition to fees expenses, such partnerships place financial company in full dependence on the banking partner. It will have to consider its operating conditions, limits, and preferences for client profiles. Thus, the fintech cannot independently manage its business processes and must adapt to what the bank partners allow, which are often very conservative. This can hinder the development of new products, entrance of new markets, or new business segments.

Profit also decreases because it has to be shared — at least between the company itself and the bank, and other intermediaries may also be involved in the process.

A national banking charter in the U.S. provides four key opportunities: operating in all 50 states under a single federal regulator, direct access to payment rails including Fedwire and ACH, the ability to issue loans and credit cards, and deposit insurance through the FDIC. All of this is a guarantee of full banking coverage and a new status. Not “some fintech company” that not everyone is willing to trust with their money, but an official bank.

For crypto companies, the logic is slightly different. Many of them apply not for a full banking license, but for a specialized permit that allows them to be custodians of assets in the federal legal field without the need to accept deposits or engage in credit lines. This option is the most justified for them, since issuing loans is not a target service for crypto exchanges or companies with virtual assets. Their task is to be official operators of crypto and fiat funds and simplify the processes.

PayPal has chosen another excellent path by applying for the creation of an industrial credit institution — an ILC under Utah law, which will allow it to accept FDIC-insured deposits while remaining outside the framework of banking regulations at the parent company level. This is a simplified way to access the service that the wallet wants to implement first — lending. Ultimately, everyone is focused on optimizing costs, which have grown significantly over the years of operating as fintechs.

Why Now?

First of all, it should be noted that not all fintechs are looking at banking licenses, but only established large companies that have simply outgrown their current status. The partnership model with banks was convenient for entering the market and rapid expansion, but it does not allow taking everything into their own hands and fully managing their set of services, prices, and solutions.

Someone else’s license, someone else’s rails, someone else’s balance sheet, as they grow, begin to limit because banks dictate the terms and take a margin just for existing between fintech and client.

Secondly, this is the ideal moment from a regulatory perspective. In the U.S., with President Trump, it became much easier for both crypto and financial companies to operate. They decided to take advantage of this moment and obtain permits while the window is open. Back in 2016, there were attempts to expand fintech operations, but they ended in failure. A new opportunity ten years later has essentially become their second chance.

What’s Next?

This news is unpleasant for traditional banks, and perhaps such positive dynamics will slow down somewhat in the near future. The lobbying group Bank Policy Institute, which represents the interests of 40 largest American banks, including JPMorgan Chase, Goldman Sachs, and Citigroup, is already considering the possibility of suing the OCC over the approval of new licenses. Competition for deposits and payment business is becoming tougher — and now companies with tens of millions of loyal users and modern technological infrastructure are entering the game. Banks are concerned about losing control and will do everything to hinder this market shift.

For fintechs themselves, obtaining a license is just the beginning of this journey. Even the most optimistic analysts do not expect them to pose serious competition to major banks in the coming years — the real effect will be seen in about five years. But the direction shows that the regulatory infrastructure has ceased to be a barrier and is becoming a competitive advantage, and being first really makes sense.

For merchants, the situation is ambiguous: requirements for businesses may grow stricter because financial companies themselves will now have to meet higher standards. If EMIs are traditionally open to various business models and work with higher-risk segments, banks usually avoid them. For some types of businesses, such a shift may mean a narrowing of available payment options. Additionally, despite the technological advancements, regulatory pressure is not going away and is only increasing in terms of AML. We can expect that compliance procedures will become more complex. On the other hand, there is potential for reducing fees and expanding services for existing clients, as well as higher security of assets.

If you are looking to open bank account for your project or have already faced difficulties along the way, Monoup is here to help you. Despite all market shifts and regulatory updates, we keep up and update our approaches to achieve the best results.