Concept
🔗 Related
payment agents in EU/UK
In Europe, embedded banking is built on a provider's license—either a bank or a neobank. A company connects to the API and offers clients accounts, cards, and payments under its own brand, while the provider holds the license and liability. The key distinction between providers is the type of license: a full-fledged bank (credit institution) can accept deposits and lend, while a neobank (e-money issuer) issues electronic money and handles payments but does not lend from deposits.
A single home-state authorization grants a passport across the entire EEA, so a provider from France or the Netherlands can serve clients throughout the EU. The agent model, where a company becomes an agent of the provider without its own license, is covered separately in payment agents in EU/UK; here we focus on the providers themselves, on which this is built.
🍓 Choosing a provider starts with what you need to offer. Deposits and credit require a banking license (Griffin, ClearBank, Solaris); accounts, cards, and payments are covered by a neobank (Swan, Treezor, Modulr). The provider's license type sets the ceiling for your product.
Bank or Neobank: What's the Difference
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payment agents in EU/UK
A bank operates on a banking license: it holds deposits under insurance, can lend, has direct access to payment systems and central bank settlements. A neobank issues electronic money and provides payment services, but client funds are not insured as deposits—they are protected by safeguarding: segregation in a separate account or insurance. For product builders, this determines both what can be offered and what capital the provider needs.
Minimum capital requirements also differ: for a neobank it's €350K, for a bank—disproportionately more, plus prudential requirements. Therefore, a neobank is faster and cheaper as a provider, while a bank is needed where there are deposits and credit. Thresholds and license types are covered in payment agents in EU/UK.
Providers
Notable embedded banking providers in the UK and EU, grouped by license type (as of mid-2026).
Banks (credit institution)
- ClearBank (UK) — clearing bank with PRA/FCA license: accounts, virtual accounts, and access to payment rails as embedded banking. In August 2024, ClearBank Europe N.V. obtained a Credit Institution License from the ECB under DNB (Netherlands) supervision—euro accounts, SEPA, SEPA Instant, and TARGET2. This is a bank, not a neobank.
- Griffin (UK) — API-first bank and full-stack BaaS. In March 2024, it received a full banking license (PRA authorization, PRA and FCA supervision), becoming the UK's first BaaS platform with a full charter; previously operated with restrictions (mobilisation). Holds client deposits, provides accounts, savings, and onboarding.
- Solaris SE (Germany) — executing bank for numerous neobanks and fintechs; holds a German banking license (since 2017) and a neobank license. Since December 2022, under special BaFin supervision: a special representative has been appointed, new clients can only be taken with regulator approval; fines of €6.5 million (2024, for late SARs) and €500K (2025, for exceeding large exposure limits under CRR). A clear illustration that the price of a license is constant supervision.
Neobanks
- Swan (France) — embedded banking on a neobank license under ACPR supervision with an EEA passport. Through API, provides accounts, cards, and local IBANs (France, Germany, Spain, Netherlands, Italy); connected companies operate on Swan's e-money license, without their own. Founded in 2019, serves 150+ companies in 30 EU countries.
- Treezor (France) — one of the pioneers of BaaS in Europe: neobank under ACPR, operating in 25 countries, Principal Member of the Mastercard network. Since 2019, owned by Société Générale, which in 2025 was in negotiations to sell it. Qonto, Lydia, and Swile grew on Treezor's infrastructure.
- Modulr (UK/EU) — payment BaaS on a neobank license: FCA in the UK and DNB in the Netherlands, with branches in France, Spain, and Ireland. Direct participant in Faster Payments and Bacs with settlement accounts at the Bank of England, principal member of Mastercard and Visa; SEPA, SWIFT, and Open Banking. Strong point—deep access to payment schemes.
- Railsr (formerly Railsbank) — embedded finance that became a warning for the sector. In March 2023, it went through pre-pack administration and was bought by a consortium led by D Squared Capital; the Lithuanian entity was previously stopped by the Bank of Lithuania, and the new owner instead filed for a neobank license in France for an EU passport. Once valued at nearly $1 billion.
What You Need to Launch
🔗 Related
payment agents in EU/UK · BIN sponsorship · white-label under MiCA CASP
Product builders first need to decide: own license or provider. Through a provider, launch is quick—API connection, passing their due diligence, and operating under their authorization. Your own license gives independence, but a neobank requires €350K capital and 6–18 months (Lithuania is fastest, Ireland and UK take longer), while a banking license is disproportionately more. Thresholds, timelines, and the agent path are covered in payment agents in EU/UK.
Next—legal entity, KYC/AML package and safeguarding procedures, integration with the provider and their approval. If the product includes cards under your own brand, BIN sponsorship is added (BIN sponsorship); crypto services in the EU follow a separate CASP regime (white-label under MiCA CASP).
What to Look For
- License type for your product. Deposits and credit—only a bank (Griffin, ClearBank, Solaris); accounts, cards, payments—neobank (Swan, Treezor, Modulr). The provider's license sets the product ceiling.
- Provider stability. The history of Solaris (special BaFin supervision) and Railsr (administration) shows: regulatory and financial problems of the provider hit everyone built on it. Worth looking at capital, supervisory status, and concentration.
- Access to schemes and settlements. Direct participation in payment systems (like Modulr and ClearBank) is more reliable than access through an intermediary—for payment products, this matters.
Applicable Regulation
🔗 Related
regulatory perimeter · Embedded finance · BaaS and sponsor banks
Regimes for banks and neobanks differ, but the principle is the same: under the provider's license, you can conduct activities, while liability remains with the provider (and with the financial organization—under EU DORA regarding ICT risks). Payment rules in the EU are changing: PSD3/PSR (final texts—April 2026) merge neobanks and neobanks into one regime and narrow exceptions for agents (Freshfields on PSD3/PSR). Perimeter trends—in regulatory perimeter.
The full license rental model is covered in Embedded finance; the American analogue through sponsor banks—in BaaS and sponsor banks.
Q/A
How does a bank-provider differ from a neobank-provider? A bank holds deposits under insurance and can lend; a neobank issues e-money and handles payments, and protects client funds through safeguarding, not deposit insurance. For a product with deposits or credit, a bank is needed.
Is your own license needed to offer accounts and cards in the EU? No, if you build on a provider and operate under their authorization or as their agent. Your own neobank license (from €350K, 6–18 months) is needed for independence and control.
What does PSD3 change for this model? Neobanks merge into the neobanks regime, exceptions for agents narrow, and non-banks gain direct access to payment systems. This raises requirements for both providers and those built on them.
This material is prepared as an expert overview and does not constitute individual legal advice.
FAQ
What does PSD3 change for this model? neobank merges into the neobanks regime, exceptions for agents narrow, and non-banks gain direct access to payment systems. This raises requirements for both providers and those built on them.
This material is prepared as an expert overview and does not constitute individual legal advice.
Key factual claims
- Minimum capital requirements also differ: for neobank it's €350K, for a bank—disproportionately more, plus prudential requirements.
- Notable embedded banking providers in the UK and EU, grouped by license type (as of mid-2026).