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Nonbanks are increasingly applying for bank charters to gain inroads into processing transactions and connecting directly to payment infrastructure

May 28, 2025 //  by Finnovate

Nonbanks, including FinTechs like Fiserv and Stripe, are increasingly applying for bank charters to gain inroads into processing transactions and connecting directly to payment infrastructure. This trend comes against a backdrop of previously muted de novo activity, with regulators potentially easing the application process. Specific limited purpose charters, such as Merchant Acquirer Limited Purpose Banks in Georgia and proposed “payments banks” in Nevada, are emerging that allow connection to rails like FedNow and merchant acquiring activities but prohibit lending. The “Nevada Payments Bank Act” would create new banks that exist for the purpose of money movement. The bill would let new banks connect, directly, to payments infrastructure including FedNow. The door would be open, then, for FinTechs to connect directly to real-time rails. Beyond the scope of those firms, other nonbanks, including retailers, would be able to gain direct access to money movement, which, according to the bill’s sponsors, would lower transaction costs. Those lower costs would come through skirting interchange fees. Securing direct access through these limited charters allows nonbanks and potentially retailers to connect directly to real-time rails, building new revenue streams and foster stronger relationships with merchants.  The direct connection to the payment rails and the card rails, as these charters are pursued and granted, would allow these (limited in scope) banks to serve merchants in new ways and in turn, forge stickier relationships with those merchants.

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