Qonto Pursues Banking License After Reaching 600,000 Business Customers

French fintech company Qonto, a digital bank focused on serving freelancers and small and medium-sized businesses (SMBs) across Europe, has filed for a full banking license in France. This move comes as Qonto crosses a significant milestone: the company now serves over 600,000 business customers throughout Europe.

From Payment Institution to Full Banking

Until now, Qonto has operated with a payment institution license, granted in 2018. This regulatory status allowed the neobank to roll out products like Buy Now, Pay Later (BNPL), but it limited their ability to offer wider credit, savings, and investment products – key financial tools that businesses often seek to fuel their growth.

With a banking (credit institution) license, Qonto will be able to provide loans, accept business savings deposits, and introduce more advanced financial products directly, without relying on partners. Their current license allows operations across the EU, enabling recent expansion into markets such as Austria, Belgium, the Netherlands, and Portugal. However, the absence of credit products has proved a hurdle as Qonto pursues its ambition to reach 2 million customers by 2030.

Competitive and Regulatory Landscape

The journey to becoming a licensed bank is not straightforward. Qonto’s key competitors have taken varied paths: Memo Bank launched as a full bank from inception, Finom holds an electronic money institution (EMI) license and only recently started trialing lending, while Revolut, with a bank license from Lithuania, is yet to launch business credit broadly but has announced plans to do so.

Market dynamics are heating up, especially after Revolut shared intentions to seek a French license and make Paris its Western European HQ. Still, Qonto’s leadership emphasizes that the decision to pursue full banking status stems from recently achieving profitability, reducing the need for further fundraising solely for regulatory expansion.

Profitability and Strategic Growth

With profitability reached ahead of schedule in 2023 – years after a $552 million fundraising at a $5 billion valuation – Qonto now has flexibility to invest in strategic development. Its recent acquisitions of Germany’s Penta and accounting automation platform Regate underline a shift toward becoming an all-in-one finance management hub for European businesses.

The role of credit is critical. Qonto’s Pay Later offering, launched in 2024, has already enabled €50 million in financing, but is restricted by current license limitations: only equity-based lending and loans of up to 12 months.

Deep Founder Analysis

Why it matters

The transition from a fintech/payment provider to a licensed bank represents a strategic inflection point for startup banks like Qonto. Full banking status unlocks access to core revenue streams and allows direct competition with incumbents. More broadly, it signals a shift in European fintech, where regulatory hurdles are becoming stepping stones for market consolidation and trust-building in B2B financial services.

Risks & opportunities

Securing a credit institution license involves substantial regulatory scrutiny, increased operational risk, and longer product rollouts. Yet, for Qonto and similar startups, the opportunity to provide lending, savings, and investments firsthand dramatically expands lifetime value per customer. Competition with well-funded rivals (e.g., Revolut) also means differentiation must go beyond feature parity to strong customer relationships and reliability.

Startup idea or application

The growing complexity of cross-border regulatory compliance for fintechs creates an opening for SaaS platforms specializing in real-time licensing management, multi-country product compliance, and automated risk monitoring. Founders might also explore embedded lending infrastructure tools tailored for B2B neobanks expanding into full banking services across the EU and beyond.

Customer Demand and Product Evolution

Customer trust is a powerful driver. Many European businesses want the security and deposit guarantees associated with licensed banks and the flexibility to access credit on demand. Other neobanks have validated credit demand, but Qonto’s Pay Later traction proves strong appetite among SMBs.

To support client needs beyond its own lending limitations, Qonto launched a “financing hub” in partnership with third-party fintechs like Defacto, Karmen, Riverbank, and Silvr. While these collaborations will continue, a credit license would allow Qonto to extend new lending products, use customer deposits to fund credit, and improve margins.

Operational Scaling and Next Steps

Qonto is not just pursuing regulatory milestones. The company has invested in building its own card processor – a bid to reduce dependence on tech vendors and improve product reliability. With a workforce of 1,600, Qonto also aims to bring new AI-enabled products to market, such as the newly announced “Qonto Intelligence” suite, while shoring up internal risk management and banking operations.

The licensing journey could take years, but Qonto is preparing foundational elements for future prospects, including board expansion and readiness for a possible IPO. This “growing up” phase echoes shifts seen in earlier fintech waves, such as N26 and Monzo, as they matured from disruptors to regulated institutions.

Fintech Neobank Business Banking EU Regulation Lending

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