Neobanks Push Beyond Interchange to Build Full-Service Platforms

Earnings season has made one trend abundantly clear: the neobank is evolving.

What began as a digitally native model built on debit cards and simple spending apps has become something more complex, more regulated, and, increasingly, more sustainable. The models, underpinned by platforms, are enabling broad suites of products that include deposits, lending, premium subscriptions, balance sheet banking, and full retail payments networks.

What a Neobank Is Today

At its essence, the neobank is a digital-only financial institution that offers consumer or business banking services without physical branches, often through a partner bank that provides insured deposits and regulatory footing. PYMNTS’ long-running coverage of digital banking has emphasized that neobanks grew quickly because they delivered intuitive apps, instant payments, fee-free accounts, and card-driven spending experiences.

But as the industry matured, interchange alone could not support the cost of customer acquisition, compliance and ongoing product innovation. That pressure pushed neobanks toward more diversified revenue streams.

In Europe, Monzo and Revolut show how the earliest neobanks built scale, then expanded beyond interchange because card economics were capped. Both firms grew by offering fee-free accounts and instant spending alerts. But EU interchange limits restricted how much they could earn per transaction.

That is why both shifted early into broader product suites. Monzo expanded into overdrafts, savings and subscription accounts such as Monzo Plus and Monzo Premium, which PYMNTS has covered even as far back before the pandemic as key contributors to recurring revenue. Revolut built out foreign exchange, wealth, business banking, and a tiered subscription model that PYMNTS reported has become one of its most important revenue (and profit) engines.

Diversification is not optional. It is structural.

Klarna’s New Neobank Ambition

Klarna’s Q3 2025 earnings reinforced that shift. The company reported strong results driven by U.S. revenue, fair financing growth and expanding product lines, as we reported on Tuesday in the wake of the announcement. CEO Sebastian Siemiatkowski used the call to describe Klarna’s evolution into a full neobank supported by a global retail payments network. His language underscored a model rooted in customer trust and data-rich experiences. He also highlighted Klarna’s ambition to “give people back time,” “give people back money” and “give back them control.”

Klarna’s revenue mix now spans merchant fees from its checkout network, interest income from fair financing, card economics via the Klarna Card, and value-added services such as price comparison and package tracking. Its network scale also gives it SKU-level data across a majority of transactions, a differentiator highlighted in earnings. This puts Klarna at the intersection of payments, banking, credit and commerce.

SoFi’s Hybrid Model

In the U.S., SoFi represents a different but equally important direction: the neobank with an owned bank at its core. After acquiring Golden Pacific Bank, SoFi gained the ability to gather low-cost deposits, issue loans directly, and earn net interest income. PYMNTS has reported that SoFi’s deposit-led funding model now supports lending economics closer to those of a traditional bank even amid the branching out. Payments and checking accounts draw users in, but lending and investing generate margin and deepen relationships. That dynamic shows how a charter can convert a spending app into a full-service financial institution. In its latest quarter, and as reported here, management noted that SoFi card and deposit spend totaled nearly $20 billion in annualized transactions, up 55% year over year.

LendingClub and the Bank Ownership Playbook

LendingClub shows another path: buying a bank outright. Its acquisition of Radius Bank created a fully regulated structure allowing it to hold deposits, fund loans internally, and blend marketplace revenue with balance sheet interest income. This shift stabilized revenue and allowed LendingClub to reduce dependency on external loan buyers. In LendingClub’s third quarter, management stated that the LevelUp savings product had logged $3 billion in balances, and represented the bulk of deposit growth thus far into 2025.

Across several of these players, a common pattern emerges. Payments remain the gateway product: users sign up for cards, wallets, BNPL or checkout tools, and transaction activity generates engagement and data. But the real economics come from what happens after that. Deposits lower funding costs. Credit expands margins. Premium tiers generate recurring revenue. Merchant services and network-level value-added services create durable, multi-sided economics.

Neobanks are moving into fully-defined banking initiatives because that is where the unit economics work acting less like a standalone payments app and more like a modern, digital-first banking platform.