Riverty, the fintech arm of Bertelsmann, has secured a Luxembourg banking licence to turn its Buy Now, Pay Later (BNPL) and credit unit into a regulated European bank — the latest sign that BNPL providers are chasing bank charters to fund their loan books with deposits rather than wholesale debt. The licence, issued by Luxembourg’s Commission de Surveillance du Secteur Financier (CSSF) and the European Central Bank (ECB), clears Riverty to begin operations as a credit institution in July 2026.
The move mirrors a pattern The Industry Spread has tracked across the sector: BNPL and neobank players are converging on deposit-funded models to cut their cost of capital. Klarna now funds 91% of its lending book with customer deposits, and Riverty’s charter gives it the same structural option — a cheaper, stickier funding base than the securitisation and warehouse lines that financed first-generation BNPL.
Riverty obtained the licence in roughly ten months, fast by European standards, transforming its Pay and Credit Unit from a BNPL provider into a regulated EU credit institution. The unit already serves more than 1,800 merchants and about 25 million customers, processing more than 235 million transactions a year across Europe, according to Bertelsmann. The Luxembourg base lets Riverty passport embedded payment, credit, and liquidity services across the European single market under one supervisory regime rather than stitching together national permissions.
The licence lands amid a wider rush for charters and regulated status. In the United States, business-banking startup Mercury cleared an Office of the Comptroller of the Currency national bank charter alongside a $200 million raise, while Bunq filed for a Mexican banking licence in its North America push. Each reflects the same calculation: owning the balance sheet, rather than renting it from a sponsor bank, lowers funding costs and removes a layer of partner risk. For embedded-finance providers selling credit at the merchant checkout, a deposit base also funds receivables at a fraction of wholesale rates.
“Receiving regulatory approval for Riverty’s banking licence in under a year is a major milestone for Bertelsmann and confirms Riverty’s strong position and long-term experience as a leading European fintech,” said Carsten Coesfeld, member of the Bertelsmann Executive Board responsible for Riverty (Bertelsmann). The framing — a media conglomerate operating a licensed European bank — underscores how far embedded finance has travelled from a checkout feature toward regulated infrastructure.
For competitors, the charter sharpens an existing divide. Klarna and Riverty now both hold banking permissions and can fund lending with deposits, while PayPal’s Pay Later and Block’s Afterpay continue to lean on group balance sheets and funding facilities. The regulated route brings heavier capital and conduct obligations — the CSSF and ECB will supervise Riverty’s capital adequacy, governance, and consumer-credit conduct — but it also confers the deposit-taking permission that BNPL pure-plays lack. As Klarna’s deposit-funded first quarter showed, that funding structure can materially reshape unit economics once scale arrives.
The timing also reflects a maturing European regulatory backdrop for consumer credit. The EU’s revised Consumer Credit Directive pulls BNPL squarely into regulated lending, raising affordability-check and disclosure requirements that favour providers already operating under a bank licence. By securing credit-institution status before those rules bite hardest, Riverty positions its merchant-facing credit products inside the regulated perimeter rather than scrambling to retrofit compliance — a contrast with BNPL operators still treated as light-touch payment providers in several markets.
What happens next will hinge on execution. A banking licence is permission, not a deposit base; Riverty must now attract and retain customer deposits to realise the funding advantage, build out treasury and risk functions, and absorb the fixed costs of prudential supervision. If it succeeds, expect more European BNPL and embedded-finance providers to follow the charter route, accelerating consolidation between those that can fund a balance sheet and those that cannot. The July 2026 launch will be the first test of whether a media group can run a competitive European bank — and of whether the deposit-funded BNPL model travels beyond Klarna.
This article is informational analysis only and is not financial, investment, or legal advice. Company financials and regulatory details are based on sources available at the time of writing and may change.
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.
