What's Happening?
Stellantis, along with other major companies like Ford and GM, is pursuing a bank charter to transition its buy-now-pay-later (BNPL) operations to a deposit-funded model. This move comes as the Federal Deposit Insurance Corporation (FDIC) has conditionally
approved several industrial-bank deposit-insurance applications since January 2026, signaling a regulatory shift. The transition from a capital-markets-funded model to one based on insured deposits is expected to redefine the competitive landscape of BNPL services in the U.S. Klarna and Affirm have also filed for similar charters, indicating a broader industry trend towards securing cheaper and more stable funding sources.
Why It's Important?
The shift towards deposit-funded models in the BNPL sector is significant as it promises to lower funding costs from approximately 7% to around 3-4%, providing a competitive edge. This transition could reshape the financial landscape by allowing companies like Stellantis to have greater control over their funding and customer relationships. The move is also indicative of a broader trend where nonbank financial institutions are seeking bank charters to enhance their competitive positioning. This could lead to increased consolidation in the BNPL market, as smaller players may struggle to compete with larger firms that secure cheaper funding.
What's Next?
As the regulatory environment becomes more permissive, more companies are expected to file for bank charters. The success of these applications will likely determine the future competitive dynamics in the BNPL sector. If approved, companies like Stellantis could begin offering deposit-funded loans and savings products by 2027, potentially leading to a significant shift in how checkout credit is funded. However, the process is slow and contested, with incumbent banks opposing these applications, which could delay or complicate the transition.
