\Fintech News/ Meet the UK’s newest challenger bank (complete with a fresh licence) Cashplus provides banking to small businesses who might struggle to secure loans from bigger banks By Freya Pratty 3 February 2021 Credit: Source: Cashplus Credit: Source: Cashplus \Fintech Inside Taavet Hinrikus’s vast angel portfolio By Isabel Woodford 24 February 2021 Member \Fintech News/ Meet the UK’s newest challenger bank (complete with a fresh licence) Cashplus provides banking to small businesses who might struggle to secure loans from bigger banks By Freya Pratty 3 February 2021 Cashplus, a digital-only banking provider, has become the latest fintech to secure a UK banking licence. That makes it the newest “official” challenger bank, despite the company now being 15 years old, and among London’s first digital banking alternatives. Like other digital banks, Cashplus offers prepaid Mastercards and current accounts to micro-businesses, as well as a growing pool of retail consumers. Its new status as a UK bank comes as fintech giant Revolut begins its own quest for a licence — a process that has proven challenging. One of Cashplus’ main assets is that — unlike most well-known digital banks — it is profitable, having made a small operating profit for nine consecutive years. Last year, the company generated £50m in revenue. Around half of this came from its business arm, which currently counts around 150,000 clients, while the remainder came from its consumer-facing services. The company says its new licence will enable it to offer a wider range of products, including cheaper lending. In its previous status as an emoney institution, Cashplus had to safeguard its £500m in users deposits, whereas now it has permission to lend a portion of them out. “Cashplus has reached this milestone at the moment when UK small businesses need us most,” says Rich Wagner, Cashplus’ founder and CEO. Wagner added that as a new bank, Cashplus wants to help bolster support for businesses as the economic repercussions of the pandemic bite. “While big banks are slamming the door shut, we’ll be welcoming customers, opening up lending and delivering enhanced products to support them through the challenging months ahead.” The journey to get banked Cashplus’ journey to becoming a bank has taken roughly three years — a process it says took longer than others because it was more established than most applicants are at the point at which they apply, meaning there was more data for the regulator to check. Securing a licence can be tricky — official data shows that between 2013 and 2019, just 31 companies out of 110 candidates were given the green light to even apply for one. Earlier in January, Revolut announced that it had been invited to apply for its licence — a process that involved months of “pre-application” meetings and several big hires. The company has a European banking licence, granted by the Bank of Lithuania in 2018, but operates as an FCA authorised e-money company in the UK. Rival fintechs Starling and Monzo both secured their bank licences several years ago as nascent startups. Cashplus CEO Rich Wagner Freya Pratty is Sifted’s news reporter. She tweets from @FPratty Want the best of Sifted in your inbox? Our newsletter brings you the latest, greatest stories on startup Europe. Sign up Terms of Use Related Articles Exclusive: Mastercard ex-chief plans to invest $100m+ fund into Europe’s payment startups By Isabel Woodford Click here to read more Member Inside Taavet Hinrikus’s vast angel portfolio By Isabel Woodford Click here to read more 6 sales tips for SaaS startups By Rebecca Bellan Click here to read more Member Fintech gets green: The startups mixing money and climate activism By Isabel Woodford and Cecile Bussy Click here to read more Get the best of Sifted in your inbox By entering your email you agree to Sifted’s Terms of Use Sign up to \Future Proof Sifted’s weekly \Corporate Innovation roundup email By entering your email you agree to Sifted’s Terms of Use Most Read 1 Member \Fintech Meet the TransferWise ‘mafia’: The employees turned entrepreneurs 2 Member \Corporate Innovation Exclusive: Barclays pulls plug on flagship payments app Pingit 3 \Startup Life Staff love working from home. Bosses… not so much 4 Member \Venture Capital Early investors in UiPath on track to make a 220,000% return 5 \Venture Capital Investors love data. So why not dig into sustainability metrics? Join the conversation Subscribe Notify of new follow-up comments new replies to my comments
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