Riverty, the payments and credit arm of Bertelsmann’s Arvato Group, begins operating as a licensed bank in Luxembourg this month, converting a Buy Now, Pay Later (BNPL) business serving more than 1,800 merchants into a regulated European Union (EU) credit institution. The licence, granted under the EU Capital Requirements Regulation (CRR) after a ten-month application, is the third BNPL-to-bank conversion announced in six months — and the pattern is not about ambition. It is about the cost of money.

BNPL books funded by wholesale debt carry a cost of funds that reprices with policy rates. Deposit-funded books do not. That single line on the liability side explains why Klarna has filed for a United States bank charter, why Nubank secured conditional approval from the Office of the Comptroller of the Currency (OCC) in January 2026, why Revolut applied for a US charter in March, and why a German media conglomerate has now stood up a bank in Luxembourg. The charter is not a trophy. It is a funding instrument.

Riverty’s payment and credit unit already processes more than 235 million transactions a year across 10 European markets, serving approximately 25 million customers, according to Bertelsmann. Those volumes were previously intermediated. From July they sit inside a balance sheet Riverty controls.

Why Luxembourg

The jurisdiction is a deliberate choice rather than a tax one. Amazon, PayPal and eBay all run European operations from Luxembourg, and Riverty’s model depends on sitting inside merchant checkout flows rather than alongside them. Proximity to the platforms that own those flows is the point.

“We operate at the core of the transaction, enabling merchants to improve conversion and cash flow,” said Oliver Kuhaupt, Chief Risk Officer at Riverty and designated chief executive of the new bank. (IBS Intelligence)

That framing — conversion and cash flow, not consumer lending — is the tell. Riverty is positioning the bank as merchant infrastructure, competing less with Klarna’s consumer app than with the embedded-finance stacks that payment service providers have been assembling for three years.

The competitive response is already visible

European payments incumbents have not been idle. Adyen has spent two years extending from acquiring into issuing and embedded business banking for merchants. Stripe has done the same through Treasury. Both arrived at merchant banking from the payments side; Riverty is arriving from the credit side, with a customer base already habituated to deferred settlement.

The open-banking cohort is converging on the same territory from a third direction. TrueLayer added credit to its Pay by Bank product with in3 as new Financial Conduct Authority rules landed, precisely because account-to-account payments without a credit option lose the basket to a card. Everyone is trying to own the same moment — the instant the customer decides how to pay.

“Financial decisions happen in every transaction,” said Andreas Barth, chief executive of Riverty, who has said the company intends to become “the best integrated bank in the merchant ecosystem.” (Finextra)

What the licence actually changes

A CRR licence brings capital requirements, supervisory reporting and resolution planning — real costs that a BNPL provider does not otherwise carry. Riverty is accepting those in exchange for deposit-taking permissions and the funding economics that follow.

The trade only pays if the deposits arrive. This is the part the charter narrative tends to skip: a licence grants the right to take deposits, not the ability to attract them. Nubank has a consumer brand that gathers deposits at scale in Brazil. Riverty does not have an equivalent retail franchise in Europe, and merchant-side balances are stickier but smaller. The funding advantage is theoretical until the liability side fills.

“The license is of great strategic importance for Riverty,” said Carsten Coesfeld, the Bertelsmann Executive Board member overseeing the business, adding that it confirms the company’s “strong position and long-term experience as a leading European fintech.” (Bertelsmann)

What happens next

Expect two things. First, consolidation pressure on sub-scale European BNPL providers: once the leaders fund receivables with deposits and the followers fund them with wholesale debt, the margin gap widens every quarter that rates stay elevated, and the followers become acquisition targets rather than competitors. The same logic drove the payments consolidation we saw when REPAY closed its $372m KUBRA deal.

Second, watch the credit-data layer. A bank that underwrites merchant credit needs bureau-grade data on the merchants themselves, not just the shoppers — the gap that made Equifax pay $750m for Círculo de Crédito. Riverty inherits a decade of transaction history across 25 million customers. Whether it can turn that into a durable underwriting edge, rather than merely a cheaper cost of funds, is the question that decides whether this licence was strategic or merely defensive.

Rick Steves

Rick Steves has seen business and economics through many lenses. He joined the financial services industry in 2009, and has been a financial journalist since 2011. He holds a degree in Business Administration and has experience producing real-time news, from both buy-side and sell-side, as well as for retail traders, brokers and service providers. Steves' work has appeared in a variety of online publications including FX Street, NewsBTC, FinanceFeeds, and The Industry Spread. Rick has great interest in the dynamics of the trading industry. The never-ending clash between technology, economics, regulation, and more importantly, the people.