▼ Summary
– Qonto is not currently a bank but has applied for a banking license in France to expand its services beyond its current payment institution license.
– A credit institution license would allow Qonto to offer lending, savings, and investment options, helping it reach its goal of 2 million customers by 2030.
– Competitors like Memo Bank, Finom, and Revolut have taken different approaches to licensing, with Revolut planning to seek a French license and expand its B2B credit offerings.
– Qonto achieved profitability in 2023, enabling it to pursue a banking license without additional fundraising beyond its $552 million 2022 valuation.
– Obtaining a banking license would help Qonto attract more customers, reduce reliance on third parties, and unlock new revenue streams from lending and deposits.
Qonto, the French fintech company specializing in financial services for freelancers and small businesses, has reached a significant milestone with 600,000 customers across Europe. Now, the company is taking a major step forward by applying for a full banking license in France, a move that could transform its business model and expand its offerings.
Currently operating under a payment institution license obtained in 2018, Qonto provides basic financial services, including a buy now, pay later (BNPL) feature. However, securing a credit institution license would allow the company to offer loans, savings products, and investment options, key services that many of its customers demand.
Expanding beyond its current capabilities is crucial for Qonto’s long-term growth. While its existing license enables operations across the EU, the lack of a full banking license limits its ability to compete with traditional banks and other fintech players. Competitors like Revolut and Memo Bank have already taken different approaches, Revolut holds a Lithuanian banking license, while Memo Bank launched as a fully licensed institution from the start.
Qonto’s CEO, Alexandre Prot, emphasized that profitability in 2023 has positioned the company to pursue this next phase without needing additional fundraising. The firm has already made strategic acquisitions, including German competitor Penta and financial automation platform Regate, strengthening its position as an integrated financial management solution.
The demand for credit among Qonto’s customers is clear. Its Pay Later service, introduced in 2024, has already facilitated €50 million in short-term financing. However, current regulations restrict lending terms to 12 months and prevent the company from using customer deposits for loans, limitations that a banking license would remove.
Beyond revenue growth, Prot sees the move as a way to reduce reliance on third-party partners and accelerate product development. The company has already taken steps toward greater independence, such as building an in-house card processing system to improve transaction success rates.
With a team of 1,600 employees, Qonto is also investing in AI-powered financial tools and strengthening its risk management framework, key steps in securing regulatory approval. While the licensing process may take years, the company is positioning itself for long-term expansion, including a potential IPO down the line.
For now, Qonto remains focused on deepening its presence in existing markets, with Germany emerging as its second-largest market after France, followed by Spain, Italy, and newer entries like Austria and Belgium. The banking license could be the game-changer needed to reach its ambitious goal of 2 million customers by 2030.
(Source: TechCrunch)
