Elina Rayberg, Prinicipal at the Peter Thiel-backed VALAR Ventures
Wise’s exploration of a UK banking license is more than a single company milestone; it’s reflective of a significant, wider industry trend. Fintechs are no longer content to operate on the periphery of payments; they are stepping out of the shadows to compete directly with traditional banks. The implications for the payments ecosystem are profound.
Expanding Beyond the Payments Value Chain
For many years now, fintechs have added various components to the payments value chain. From BNPL, cross-border transfers, embedded payments and beyond, building financial infrastructure that allows businesses to integrate simpler, varied payment options for consumers has been a lucrative and innovative industry, one that’s attracted swathes of investment.
Until very recently, these fintech players haven’t felt a need to expand into more consumer-facing, traditional banking settings, and particularly not the need to tackle the various compliance and capital requirements needed to become a bank. This is changing.
Wise’s Strategic Move
Wise is a payments giant. It already operates at a global scale, with over 10 million customers and billions in transfers each quarter. By seeking a banking license, Wise is demonstrating an ambition to move beyond payment infrastructure and offer regulated financial products such as savings and credit. This would open new revenue streams while strengthening its position as a consumer brand, not just a payments rail.
A Broader Competitive Landscape
Wise is part of a wider movement. Revolut has been pursuing banking licenses in both the UK and US. Block (formerly Square) holds a banking charter, whilst both Stripe and Apple have partnerships with Goldman Sachs to offer banking products and services. Together, these moves illustrate a convergence: fintechs expanding into regulated banking, while incumbent banks adopt fintech-driven product strategies to protect market share.
The Full-Stack Future
The movement of both fintechs into the banking space and banks integrating fintech product strategies is reshaping the payments ecosystem in real time. Broad advances in technology since the inception of banking and financial services mean that it is entirely possible for one platform to operate as a full-stack digital bank proposition.
Traditional banks, challengers, and neobanks are all racing to execute on this opportunity, though with varying degrees of success, often constrained by regulation and the complexity of scaling financial infrastructure.
Regulatory Implications
As fintechs edge deeper into banking, regulators face the challenge of adapting rules to a landscape where the line between payment providers and banks blurs. This presents both opportunity and risk. Companies that can scale responsibly within regulatory frameworks may unlock significant advantage; those that outpace their compliance capabilities risk severe consequences.
Looking Ahead
Fintechs have historically been content to capture slices of the payments market. Today, signals suggest they are preparing to compete head-on with traditional banks. Non-bank firms that successfully leverage technology, regulatory approval, and customer reach stand to evolve into diversified, full-stack financial institutions, reshaping the future of payments in the process.