Let's play ... Who Wants To Be a Bank!

0:01NPR.

0:06This is The Indicator from Planet Money. I'm Waylon Wong. I'm Ricky Mulvey. But Waylon, this isn't The Indicator. What? This is Who Wants to Be a Bank? Ah, that's right! This is The Game Show where financial technology companies vie for a shot at a U.S. banking license. There are all these companies out there that do stuff with our money, but are technically not banks. Payment apps, crypto firms, buy now, pay later companies. They don't have banking licenses, but they want them. And the Trump administration and its regulators want to grant them. In fact, they've already approved more new banks this year than in all of 2025.

0:48Today on the show, why do so many fintech companies want to be banks and what does it take to get there? Find out today on Who Wants to Be a Bank?

1:01The games will begin after this word from our sponsor.

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2:12Welcome back to Who Wants to Be a Bank? It's the game show where financial technology companies undergo a grueling process in hopes of winning a coveted banking license and some other goodies. To explain what's at stake here, we're going to bring on stage Michelle Ault. She's a co-founder of a firm called the Claros Group. It advises fintechs on becoming banks. Are you like the fintech whisperer?

2:37Dylan Matthews:Well, I like to think of myself as the regulatory whisperer. My jam is helping non-banks and fintechs navigate the very perplexing and cumbersome and Byzantine process of getting a bank license in the U.S. And that involves quite a bit of whispering to the regulators and sometimes shouting. Sounds exciting. And Michelle tells us she's been busy lately. That's because one of the main bank regulators in the U.S. has announced that it is once again open for business. It said there were years in which very few new banks got approved, and now it wants more fresh faces to increase competition in the industry.

3:19And what's in it for the fintechs? Michelle says these companies want greater access to the U.S. financial system, even if it comes with more regulatory scrutiny.

3:29Dylan Matthews:It's sort of like, ooh, encumber me, please, encumber me. I love encumbrance. So what are these prizes waiting at the end of the regulatory rainbow? Michelle, tell them what's behind door number one. Whelan, they've won deposit insurance. Yay! That's right. This prize is furnished by the Federal Deposit Insurance Corporation, or FDIC. The government backstops some types of customer deposits up to$250 ,000. Having this insurance lowers the operating costs for banks. They can collect deposits instead of relying on private, more expensive sources of funding. Now, there are different kinds of bank licenses in the U.S.

4:13Most banks get the FDIC backstop. For other types, there are additional upsides. What's behind door number two, Michelle?

4:22Dylan Matthews:Wait, there's more. They also get access to the Fed discount window. That's the ability to borrow money from the Federal Reserve. Very useful in emergencies. All right, let's open door number three. And the biggest grand prize of all, a Fedmaster account. This is a bank's account at the Federal Reserve. It allows a bank to talk to other banks and process payments. This is a critical, critical communication and payment system provided by the Fed. If you don't have that, you don't have a lot. You know, you are not kind of a real bank like Pinocchio became a real boy. So these are the fabulous prizes.

5:09And now it's time to meet today's contestant on Who Wants to Be a Bank? I'm Ahmad Akim, co-founder and CEO of Mercury. Ahmad, welcome to Who Wants to Be a Bank? Woo. Woo, indeed. Ahmad co-founded his company Mercury in 2017. It caters to startups and small businesses, and it offers checking accounts, a credit card, and short-term loans. Now, you might hear that and think, sounds an awful lot like a bank. But Mercury is technically not a bank. Instead, it partners with other banks. These relationships give Mercury access to, for example, federal deposit insurance. Ahmad says he needed these partnerships at the beginning because he was new to banking.

5:54But he always wanted Mercury to eventually become a full-fledged bank. There's definitely things that we want to do that we can't do because we're not a bank. Things like Zelle, the widely used service that lets customers send money back and forth between banks. Or cashier's checks. These are checks that are essentially guaranteed by the bank. You don't think about how many little things banks do provide. It's like tens of things and there's a very long tail. But when you really need that thing, like you really need a cashier's check, it's kind of unacceptable if your bank can't do it. Mercury filed for a bank charter last year.

6:29The company needs approval from three government agencies total, including the FDIC. In April, they got conditional approval from one. Did you celebrate when you got the conditional approval or did you not want to jinx it? We did celebrate. I mean, we're a remote company, so I think we popped some champagne and we send each other a bunch of emojis on Slack. Ahmad Ekoud of Mercury, thanks for playing Who Wants to Be a Bank? Now it's time to meet a recent winner of the show. Tell the audience who you are. Richard Rosenthal. I am currently the bank president and CEO of Square Financial Services. Richard, welcome to Who Wants to Be a Bank?

7:07I'm glad to be here. So tell me, why did Square want to be a bank? Big picture for us, it's going to be about growing more deposits and balances. Hopefully people will bank more with us to offer the best price, be the most competitive. The best way to do that is having your own bank. If you've spent money at a small business, you've probably encountered Square. The company makes cash registers and credit card readers. It got approval in 2021 to become a bank. And today it offers savings accounts and loans to both businesses and consumers. Now, Square got a different kind of bank license than what Mercury is applying for.

7:45There is a kind of bank charter designed for businesses whose bread and butter is something other than banking. You just think about the Square point of sale business, like there's a hardware technology. part of that business, that is not a banking business. So Square has gone through the approval gauntlet, and many more companies are in this process. This year through August, one of the main bank regulators, the Office of the Comptroller of the Currency, or OCC, has approved 14 applications. That's double the number of approvals for all of 2025. But getting the green light isn't easy. Michelle, our fintech advisor, used to be a lawyer at the OCC.

8:21She says it recently issued guidance for aspiring banks that she sums up like this. Stop sending us crap.

8:27Dylan Matthews:The OCC might be open for business, but there's no rubber stamp here. You got to do the work. The mountains of paperwork and compliance are to demonstrate that these new banks are up to the task of safeguarding their customers' money. Insolvent or poorly run banks can destabilize the financial system. Crypto company World Liberty Financial got conditional approval from regulators last month. That move drew scrutiny because of the company's ties with the Trump family. Still, the regulatory welcome mat is out there. Companies like PayPal and Klarna have applied for their own bank licenses. And of course, today's contestant, Mercury.

9:06Will Mercury be able to collect those sweet, sweet FDIC-insured deposits and earn that shiny new Fedmaster account? Find out next time on Who Wants to Be a Bank?

9:20This show is taped in front of a live studio audience. This episode was produced by Angel Carreras with engineering by Sina Lafredo. It was fact-checked by Sierra Juarez and edited by Julia Ritchie. Cake and Canyon is our show's editor, and The Indicator is a production of NPR.

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