Zilch’s Power Play: What Its European Banking Licence with Fjord Bank Really Means for Fintech in 2025

In June 2024, while most of the fintech world was distracted by slashing burn rates and chasing generative AI headlines, Zilch pulled off a move that might define the next phase of embedded finance in Europe. The BNPL (Buy Now, Pay Later) darling announced it had secured a European banking licence—not solo, but through the acquisition of a Lithuanian bank: Fjord Bank.

Now, this wasn’t your run-of-the-mill regulatory milestone. This was a chess move in a game where most players are still arguing over the rules. Why does this matter? Because it’s not just a licence—it’s a passport. And Zilch now holds the keys to a regulated pan-European payment infrastructure at a time when trust, compliance, and capital efficiency are all being redefined.

So, what is Inside Zilch’s European Banking Licence with Fjord Bank? Let’s demystify it—and more importantly, decode how it changes the game for fintechs navigating the Europe-Africa corridor, where regulatory moats and operational scalability define winners and losers.

From BNPL Trailblazer to Regulated Powerhouse: Zilch’s Grand Pivot

Let’s back up. Zilch started as a UK-based BNPL provider with a twist: they combined the ease of PayPal-style checkout with the regulatory compliance of a fully FCA-approved consumer credit platform. At the same time, they avoided the Klarna trap—overextending credit in a rising interest rate environment that was brutal on customer acquisition costs and margins.

But Zilch wasn’t content with being the “good BNPL kid.” As the sector matured (read: got regulated), the company pivoted toward becoming a full-stack financial services platform. Enter Fjord Bank. Acquiring the Lithuanian digital bank gave Zilch a shortcut to an EU-wide banking licence, enabling passporting across the European Economic Area (EEA).

Forget flashy product launches—this was infrastructure. A €36 million acquisition that opened the vault to long-term strategic control of payments, compliance, and capital flows.

Inside Zilch’s European Banking Licence with Fjord Bank Explained

So how does Inside Zilch’s European Banking Licence with Fjord Bank work, practically speaking?

• Banking Passport: Through Lithuania’s membership in the EU and the EEA, Fjord Bank’s licence allows Zilch to operate across all 30 EU/EEA countries without establishing a new entity in each.
• Direct Settlement & Clearing: No more dependance on third-party banking-as-a-service providers. Zilch now controls its own EU IBANs and can process SEPA transactions directly.
• Deposit-Taking Capability: With its banking licence, Zilch can take deposits and potentially offer regulated interest-bearing products, introducing sticks and carrots for consumer retention.

The bottom line? Zilch just swapped dependency for sovereignty. And in a compliance-first environment, that makes all the difference.

Compliance, Capital & Control: Why This Licence Matters

The fintech graveyard is littered with great ideas that ran afoul of regulators. Zilch is hardwiring compliance into its operating model—an approach that forward-looking institutions like PAA Capital know well. This aligns with the broader shift we’re seeing in 2025: capital-light fintechs are going full-stack to build regulatory resilience.

Inside Zilch’s European Banking Licence with Fjord Bank Compliance Insights

• AML/CTF Alignment: Lithuania’s central bank, the Bank of Lithuania, is known for its robust AML compliance framework. Zilch now sits under that supervisory umbrella.
• Data Harmonisation: Holding a licence means adhering to GDPR, PSD2, and soon-to-be DORA (Digital Operational Resilience Act). Zilch now has to unify EU-wide data policies—no small feat.
• Capital Adequacy: The licence demands Zilch maintain tiered capital reserves, ensuring they can absorb loan defaults and operational shocks. Say goodbye to BNPL’s “move fast, break things” era.

For institutional clients, this means Zilch becomes a safer counterparty. For compliance officers, it means new assurance layers previously unavailable in the BNPL sector.

Benefits and Challenges: What Zilch Gains—and What They Must Tackle

Inside Zilch’s European Banking Licence with Fjord Bank Benefits

• Margin Expansion: Cutting out intermediaries lets Zilch keep interchange and FX revenues in-house.
• Product Innovation: With regulatory headroom, Zilch can offer savings, direct debit, virtual and physical cards, multi-currency accounts—all under one licence.
• Pan-European Scaling: From Paris to Prague, Zilch now plays as a domestic operator in each country, not a cross-border vendor.

Inside Zilch’s European Banking Licence with Fjord Bank Challenges

• Regulatory Fatigue: Operating across multiple jurisdictions requires a multi-lingual, multi-regulator compliance team. Burnout is real.
• Operational Complexity: Managing core banking systems, real-time fraud detection, capital ratios and customer service—all in-house—is a different beast from API-first fintech.
• Talent & Culture Shift: Startups value speed; banks value stability. Can Zilch retain its nimbleness while becoming institutionally compliant?

In short, Zilch gains control—but also inherits responsibility. The real test will be how they handle that balance at scale.

Implementation Guide: What This Move Signals for Other Fintechs

For fintechs eyeing continental expansion (especially those serving the Africa-Europe corridor), Zilch’s banking licence blueprint offers a template—albeit one that requires grit, capital, and execution discipline.

Inside Zilch’s European Banking Licence with Fjord Bank Best Practices

• Acquire vs Apply: Getting a licence organically can take 18–36 months. Acquiring a dormant or underutilised bank (like Fjord) is a faster route.
• Choose Your Regulator Wisely: Lithuania, Malta, and Ireland offer fintech-friendly frameworks—but supervision levels vary. Lithuania is fast-moving but expects deep AML maturity.
• Build Internal Compliance Muscle: Don’t outsource everything. Your future investors and partners want internal governance, not just vendor SLAs.

For cross-border operators like PAA Capital, this model reinforces the value of regulatory infrastructure. In fact, we’re seeing a growing appetite from African VASPs and EMIs to explore partner banking strategies in the EU—especially as the Digital Euro and MiCA regulations reshape the landscape.

What’s Ahead: Inside Zilch’s European Banking Licence with Fjord Bank and 2025 Trends

Looking forward, the Zilch-Fjord deal is aligned with three unfolding megatrends:

1. Embedded Finance, Regulated Edition

Zilch can embed services directly into apps, marketplaces, and lending platforms—without relying on embedded banking partners. Expect more fintechs to mimic this model: going full-stack to maintain control of customer flows and compliance narratives.

2. Agentic AI Meets Core Banking

With 85% of financial institutions now using AI for core operations, Zilch is primed to integrate autonomous workflows—especially for fraud detection, real-time risk underwriting, and transaction monitoring. Owning the banking core allows that AI to act, not just advise.

3. The Rise of Compliant Infrastructure

As consumer trust fractures and regulators tighten the noose, fintechs need to rebrand from “fast and loose” to “secure and sovereign.” Zilch’s licence is part of a bigger push toward controlled, regulated infrastructure models—especially critical in the Africa-Europe corridor where financial crime risks remain elevated.

Conclusion: The Licence Is the Strategy

Inside Zilch’s European Banking Licence with Fjord Bank isn’t just a regulatory checkbox—it’s a strategic playbook. In a world where embedded finance, real-time compliance, and AI automation converge, the winners will be those who control the stack, not rent it.

For HNWIs looking for stable fintech exposure, for institutional players seeking compliant partners, and for compliance officers navigating multi-jurisdictional frameworks, the Zilch-Fjord model offers a compass.

At PAA Capital, we’re watching closely—not because we’re in the BNPL game, but because the game is changing. And Zilch just told us where the next move is headed.

Want to explore how regulated infrastructure can give your institution an edge in the Africa-Europe corridor? Let’s talk.