As fintechs chase OCC licenses, sponsor banks get more competition but not less demand

German fintech Pliant has hired Coastal Financial to support its U.S. expansion, using a sponsor bank setup to move faster on cards and other payment products. The bigger picture for PSPs is straightforward: as more fintechs pursue bank charters and OCC licenses, sponsor banks face more competition for business, but the market for banking-as-a-service partners is not disappearing.

1. Coastal Financial this week signed a deal with Berlin fintech Pliant to act as its sponsor bank for U.S. expansion. The arrangement lets Pliant add payments and other financial services without first obtaining licenses and building out the full compliance stack itself.
2. Pliant CEO Malte Rau said the company’s first U.S. step is to issue cards, and that requires a bank license. In his words, the sponsor bank structure gives Pliant licenses for all 50 states. Pliant already has a money transmitter license in the European Union, and it says using a sponsor bank in the U.S. improves speed to market.
3. Brian Hamilton, president at Coastal Financial Corporation, said demand for sponsor banks remains high even as more fintechs seek bank charters. His view is that many financial firms still have trouble reaching new customers because of tech challenges, which is exactly where a sponsor bank can fill in the gaps.
4. Pliant, founded in 2020, recently raised $40 million from Illuminate Financial, Speedinvest, PayPal and others to fund the U.S. push. It has more than 3,500 clients in Europe and recently acquired Austrian insurtech hi.health to reach healthcare clients.
5. Coastal Financial, based in Everett, Washington, runs both a sponsor bank business and a retail banking business through Coastal Community Bank, which has 14 branches, mostly in the Seattle area. Rau said Coastal keeps part of the interchange on card transactions and also supplies bank identification numbers, which he described as another useful compliance function.

For high-risk operators and their payment partners, the practical point is that sponsor banks still sit in the middle of card issuance, compliance, onboarding and product expansion. Coastal’s existing fintech roster includes Dave and Robinhood, and it also partners with Walmart on the OnePay card, which is a reminder that the same sponsor-bank model is used across consumer brands and fintech programs when speed and licensing matter.