Switzerland Is Replacing Its FinTech Licence. Is the New Licence Actually Better?
Switzerland will replace its FinTech licence under Article 1b of the Banking Act with a new payment instrument institution licence under the Financial Institutions Act (FinIA).
At first glance, moving from a licence under the Banking Act to a payment instrument institution licence sounds like a downgrade.
But is it?
Most discussions focus on the new regulatory framework. I think there is a more interesting question: what do existing licence holders, their customers and potential buyers actually gain or lose?
1. The CHF 100 million limit: not quite what everyone thinks
The existing FinTech licence is commonly described as allowing institutions to accept up to CHF 100 million in client deposits.
That is correct, but incomplete.
The ceiling applies to public deposits as legally defined, not necessarily to every franc received from every customer.
Under Article 5 of the Banking Ordinance, certain funds are excluded from the definition of public deposits, including qualifying funds from regulated financial institutions and institutional investors with professionally managed treasury operations.
Consequently, an existing FinTech institution may already hold substantially more than CHF 100 million in total customer funds, provided those additional amounts qualify for the relevant legal exclusions.
An ordinary corporate customer does not automatically qualify for an exemption simply because it is a company.
The proposed payment instrument institution regime would remove the existing CHF 100 million ceiling.
That is certainly an advantage, particularly for institutions serving retail customers and businesses whose deposits currently count towards the limit.
But it would be misleading to suggest that every FinTech institution is currently restricted to CHF 100 million in total customer balances.
2. Better protection for customers: perhaps the most important improvement
Under the current Article 1b licence, customer deposits do not benefit from ordinary Swiss bank deposit insurance.
In the event of insolvency, customers generally face the risk of becoming unsecured creditors.
The proposed regime introduces a different approach: segregation of customer funds.
These funds would, subject to the applicable legal requirements, be separated from the institution’s bankruptcy estate.
That is a substantial improvement in legal protection.
Of course, segregation is not the same as deposit insurance. The CHF 100,000 Swiss deposit insurance protection applicable to eligible bank deposits would not automatically extend to payment instrument institutions.
Nor does segregation eliminate every risk, particularly where customer funds are held through third-party institutions.
Nevertheless, stronger protection of customer assets is a real benefit of the proposed reform.
And ultimately, what matters more to a customer: the name of the licence or the legal protection of their money?
3. A more specialised licence, with some restrictions
The reform would introduce two distinct categories: payment instrument institutions and crypto-institutions.
This creates an important distinction between providing payment services to cryptocurrency businesses and directly conducting regulated crypto activities.
A company offering fiat accounts, transfers and payment services to crypto businesses would not necessarily require a crypto-institution licence.
However, a company directly providing crypto custody or trading services could face additional authorisation requirements or need to reconsider its corporate structure. We explain the current rules in our Swiss crypto licence guide.
The distinction matters.
Serving crypto companies does not automatically make you a crypto-institution.
The new payment instrument institution regime would also expressly permit the issuance of certain regulated stablecoins, subject to specific requirements.
So while the new licence may be more specialised, it is not necessarily less useful.
4. Existing FinTech licence holders have another advantage
Under the proposed transitional arrangements, existing Article 1b FinTech institutions would not have to start the licensing process from scratch.
They would move into the new regulatory framework, with a transitional period to comply with the new requirements.
That is commercially significant.
Obtaining a FINMA authorisation takes time, money and considerable preparation.
An existing institution with an established compliance structure, operational infrastructure and regulatory history may therefore enjoy an advantage over a new applicant.
Of course, regulatory continuity does not mean that a purchaser can simply acquire the company and change its shareholders, management or business activities without considering FINMA’s requirements. See what to check before buying a Swiss regulated company.
5. What happens to the value of existing FinTech licences?
This is where the reform becomes particularly interesting from an M&A perspective.
Consider an existing FinTech institution focused on payment services.
Under the proposed framework, it could potentially:
- Accept client funds without the existing CHF 100 million public-deposit ceiling.
- Offer customers stronger statutory protection through segregation.
- Benefit from regulatory continuity without a completely new licence application.
- Issue certain regulated stablecoins, subject to additional requirements.
There will also be costs. Stronger safeguarding, governance and compliance obligations do not come free.
And for institutions combining payments with regulated crypto activities, the new framework could create additional complications.
But for a payment-focused institution, the commercial advantages may outweigh the restrictions.
That raises an interesting question for potential buyers.
Could an existing Swiss FinTech institution become more valuable under the new regime, rather than less?
I believe that is entirely possible, although the answer will depend on the business model, regulatory obligations and financial condition of the company.
6. But scarcity is about to disappear.
Whatever its flaws, the FinTech licence had one commercial quality: it was rare. Only a handful of companies ever held one, so a licensed company had real resale value, and its holders faced little direct competition.
The reform changes that. SRO-affiliated companies that want to keep accepting client funds or issue stablecoins will need the payment instrument institution licence, and crypto firms that hold or trade assets for clients will need the new crypto-institution licence. Not every SRO company will make the move, but the market could go from four or five licence holders to dozens, possibly a hundred or more, holding an equivalent licence.
For a buyer, that changes the price of a licence. For a seller, it means the window to sell on the basis of rarity is closing. Today’s FinTech licence still has a head start: no new application, a transition period, an existing track record. That advantage is real, but it has a shelf life.
My conclusion
I would not describe the proposed payment instrument institution licence as a downgrade.
It may be more specialised, but it could also offer greater commercial capacity, stronger customer protection and potentially better growth opportunities.
The CHF 100 million ceiling is only part of the story, particularly since certain institutional funds are already excluded from its calculation.
For customers, segregation may be the most important improvement.
For existing licence holders, regulatory continuity is valuable.
And for potential buyers, the reform could change the economics of acquiring a Swiss regulated financial institution.
The real question is not whether the new licence sounds more prestigious than the old one.
It is what the licence allows you to do, how well it protects your customers, and what the business is worth under the new rules.
Three different questions. And three very different answers.
For the background to the reform, read Switzerland’s Fintech Licence Failed. Here Is What Replaces It. Holding a FinTech licence, or thinking of buying one? Write to insight@fintechlex.com.
This analysis is based on the Federal Council’s consultation proposal of 22 October 2025. The final legislation, transitional arrangements and implementation timetable remain subject to the legislative process. General information, not legal advice.
