Dive Brief:
- Kraken parent Payward has agreed to acquire Lithuania-based Saldo Bank and its Finnish holding company, the fintech announced Wednesday.
- The move would give Payward access to a European Union banking license – an upgrade from the electronic money institutions license it carries courtesy of the Central Bank of Ireland.
- Financial terms were not disclosed, but the deal is expected to close in 2027, Payward said.
Dive Insight:
The Saldo acquisition builds on other licensing advancements Payward has made this year – particularly, the master account it received in March from the Federal Reserve Bank of Kansas City, and the national trust bank charter it applied for in May from the Office of the Comptroller of the Currency.
"Payward Banking is not a new ambition - it is a business we have been building license by license, market by market," Arjun Sethi, Payward’s co-CEO, said in a statement Wednesday. "A regulated EU bank is the piece that lets us serve European clients the way a primary financial institution should: one place to hold assets, move them freely, and put them to work. We believe whoever owns that relationship earns the right to serve everything around it. We are starting in the EU, and the ambition is global."
The Saldo acquisition is expected to let Payward offer its European users interest on deposits, lending products and banking-as-a-service capabilities such as card issuance and small and medium enterprise lending.
“A banking license is only as valuable as what you build on top of it,” Saldo Bank President Jarkko Mäensivu said in a statement Wednesday. “Payward has spent years assembling regulated infrastructure across the US and Europe. Saldo Bank’s infrastructure was built to be Europe-wide, enabling innovative banking solutions including embedded services for other fintechs. Combining these capabilities with our five-market footprint means far more customers can access the full range of what both businesses offer.”
Saldo Bank is licensed in Lithuania, with passporting capabilities to four other markets: Finland, Sweden, Germany and the Netherlands.
The bank offers retail deposits in all five of its markets, but other products are more limited. Consumer loans are available in Lithuania, Finland and Sweden. Small and medium enterprise loans are available in Lithuania and Finland.
And Saldo operates a credit-card business in Finland, with expansion to Sweden expected next year, the company said. Saldo also offers embedded lending to other fintechs in Finland and Germany.
