French fintech firm Qonto has submitted an application for a banking license in France, according to CEO Alexandre Prot.

This move could allow the company to expand its financial services to include lending, savings, and investment options.

Since 2018, Qonto has operated under a payment institution license, limiting its ability to provide credit services.

The new banking license would enable the company to offer a wider range of financial products and grow its customer base.

Its target is to reach 2 million users by 2030, up from the current 600,000 across Europe.

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🔗 Source: TechCrunch

🧠 Food for thought

1️⃣ European fintech licensing is becoming a competitive advantage

Qonto’s move for a full banking license comes amid a significant shift in European fintech regulation, with several major new frameworks set to reshape the industry in 2025.

The upcoming Payment Services Directive 3 (PSD3) and Payment Services Regulation (PSR) will establish more stringent requirements for all financial service providers, creating a more complex compliance landscape 1.

This regulatory evolution reflects a global trend of modernizing banking frameworks to accommodate innovation 2.

Qonto’s timing appears strategic, as obtaining a license before these new regulations take effect could provide a significant competitive edge and prevent potential market disruption during a crucial growth phase.

Companies that secure full banking licenses prior to the implementation of these regulations may face a smoother transition period compared to competitors still operating under more limited licenses.

2️⃣ B2B fintech competition is intensifying in Western Europe

Qonto’s banking license application comes as multiple players are jockeying for position in the European SMB banking sector, with Paris emerging as a key battleground.

Revolut has specifically announced plans to seek a French license and establish Paris as its Western European headquarters, directly challenging Qonto in its home market 3.

The acquisition of Penta significantly accelerated Qonto’s German expansion, instantly adding 50,000 clients and making Germany its second-largest market after France 4.

This pattern of strategic acquisitions has become increasingly common in European fintech, allowing companies to rapidly gain market share and regulatory coverage across multiple countries.

The competition is particularly fierce because the SMB segment has historically been underserved by traditional banks yet represents a substantial market. Qonto’s goal of 2 million customers by 2030 demonstrates the scale of this opportunity.

3️⃣ Profitability is replacing growth as the priority for mature fintechs

Qonto’s achievement of profitability in 2023 reflects a broader shift in investor expectations across the fintech sector, from growth-at-all-costs to sustainable business models.

Having raised €600 million since inception, including a massive €486 million round in 2022, Qonto now emphasizes that it doesn’t need additional funding except for potential major acquisitions 4.

This pivot to profitability marks a maturation phase for European fintechs that secured substantial funding during the 2021-2022 investment boom but now face a more challenging fundraising environment.

Qonto’s strategy of expanding beyond pure banking services to include integrated financial management solutions demonstrates how B2B fintechs are diversifying revenue streams to achieve profitability.

The company’s approach, achieving profitability while simultaneously pursuing regulatory upgrades, represents a new playbook for fintechs looking to evolve from disruptive startups into established financial institutions.

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