Is Stripe Becoming a Bank?

Stripe's Application for a U.S. Banking License

Recent reports have surfaced regarding a U.S. banking license application filed by Stripe, a leading fintech company.

Speculation arose on the social media platform X concerning whether this development would lead to Stripe being formally recognized as a bank, in addition to its existing services.

Understanding the Scope of the Application

The core answer is that Stripe will not become a traditional bank.

This application represents Stripe’s initial attempt to secure a banking license, but its focus is quite specific.

Crucially, the license sought does not authorize Stripe to accept customer deposits.

Approval would enable Stripe to independently process payments, alongside its current network of payment processing partners.

Stripe’s Official Statement

A Stripe spokesperson explained to TechCrunch: “As Stripe’s operations have expanded over the last several years, we have significantly increased the number of banking and other partnerships we maintain.

This application is intended to broaden the options available to support our users and build upon our existing collaborations with banking partners throughout the U.S.

Stripe is already a direct network member in several markets, including the United Kingdom, and this action aligns with our overall strategic goals.”

The Benefits of Independent BIN Processing

According to a source with knowledge of the situation, obtaining its own Bank Identification Number (BIN) will provide Stripe with “enhanced resilience in payment processing.”

Currently, Stripe relies on various BIN sponsors, which differ based on geographic location.

The move towards independent processing reduces Stripe’s reliance on external partners.

Mitigating Risks from Partner Departures

In 2024, Wells Fargo, a previous partner of Stripe, unexpectedly withdrew from the BIN sponsorship business.

This type of action by banks can create potential service disruptions for fintech companies like Stripe, which depend on them for access to payment networks such as Visa and Mastercard.

Having the ability to process payments directly mitigates these risks.