Hello TWIF UK & Europe friends,

The main fintech story that caught my eye this week was Zilch’s acquisition of Lithuanian lender Fjord Bank. Zilch is one of the UK’s privately held fintech unicorns, and this deal will allow the company to expand across the European Union from its new base in the Baltics. Fjord Bank’s full banking licence will allow Zilch to fund its lending directly via deposits. This will make for a different approach to the UK market, where Zilch does not hold a banking licence and has so far relied on investor capital for its lending products.

Zilch offers flexible payment options including pay now, pay over six weeks, and pay over three months. While its instalment payment offering puts the company in the BNPL category, unlike many of its competitors it obtained a consumer credit licence before its full launch in 2020. Operating within the Financial Conduct Authority's consumer credit regime has meant a consistent focus on affordability and clear credit agreements.

Rising interest rates in late 2021 and 2022, coupled with stricter regulation, led to many BNPL companies struggling, or even exiting the market. Zilch weathered the changes successfully, having been built from the ground up to consider consumer credit — not work around it. I could see this when I signed up to use Zilch. I noticed that the credit line on offer was conservative compared to other lenders. Over time, limits get adjusted upwards as repayments are made.

Zilch had a busy 2025, launching a physical payment card with Visa and in December securing a second payments services licence from the FCA. Now with the European banking licence secured, speculation is likely to increase that an IPO could be on the cards in 2026.

One of the UK's other fintech success stories — Monzo — acquired its European banking licence at the end of last year, indicating that the expansion of British neobanks into the European Union looks like a story to watch this year.

Please find another week of fintech news, financings and exits below!

-Matt

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Funding 💸

Highlights below of deals since the last post in the fintech space across the UK & Europe. Deal data powered by Dealroom.

🇬🇧 Barclays acquired an undisclosed minority stake in US-based stablecoin settlement infrastructure startup Ubyx 

Challenger Banking 🚀

🇪🇺 UK fintech unicorn Zilch acquired Lithuania’s Fjord Bank, paving the way for its expansion into European Union markets

🌍 EU challenger bank bunq applied for a US banking licence

Digital Assets ₿

🌍 In 2025, Circle’s USDC stablecoin grew faster than Tether’s USDT for the second consecutive year

🌍 KAST expanded payouts to additional local currencies, including GBP and EUR

🌍 Stripe partnered with Crypto​.com to enable merchants to accept crypto payments directly at online checkout

🌍 Morph and Bitget wallet launched a payments accelerator aimed at speeding up on-chain adoption

Traditional Banking 🏦

🇬🇧 Lloyds Bank completed what it described as the UK’s first public blockchain transaction using tokenised deposits 

🌍 JPMorgan Chase will take over the $20 billion co-brand Apple Card credit-card program from Goldman Sachs

Infrastructure 🚧

🌍 Modulr launched in the US with FIS, supporting the Money Movement Hub product

🌍 Flutterwave acquired Nigerian Open Banking fintech Mono

Payments 💰

🇬🇧 Blink Payments has introduced a Card Present API to enable ISV partners and merchants to integrate in-person payments seamlessly    

🇬🇧 UK retailer Curry’s partnered with Stripe to launch micro-donations at point of sale terminals alongside UK charity Pennies

🇪🇺 Mollie is to become a Principal Member of EPI, and will offer Wero as a payment method to its merchant base in Germany and the Netherlands in H1 2026

🇪🇺 BVNK achieved direct access to the SEPA payment scheme through the Bank of Lithuania’s CENTROlink system

🌍 Aevi announced a strategic partnership with Verifone to combine Aevi’s acquirer-agnostic orchestration platform with Verifone’s global device portfolio

Regulatory Corner 🔎

🇬🇧 The Bank of England awarded £180m in digital transformation contracts

🇪🇺 Revolut, Wise and Bits joined the European Payments Council, expanding fintech representation within European payments governance

🌍 The OECD’s Crypto‑Asset Reporting Framework (CARF) came into force this week and is now operational in 48 countries

🌍 The Central Bank of the Republic of Turkey authorised two major Turkish payment companies — iyzico and Ödeal — to provide Open Banking services

Longer Reads 📜

FinTech Investment Landscape 2025 - Innovate Finance

How payments will evolve: 6 industry trends to watch in 2026 - Payments Dive

What to expect: UK financial services regulation in 2026 - EY