The licence that is deliberately small

Article 1b of the Swiss Banking Act has been in force since the beginning of 2019. It exists so that firms can offer payment services without carrying the full weight of a banking licence. FINMA grants it. A firm mainly active in finance may accept public deposits up to CHF 100 million, or crypto based assets designated by the Federal Council.

Two sentences next to that turn the relief into a business model of its own. The deposits do not bear interest. They are not invested.

That removes precisely what a bank earns from. A bank takes in short term deposits, lends them out long, and lives on the difference. This maturity transformation is the risk that makes a banking licence expensive: capital requirements, liquidity rules, deposit insurance. Under Art. 1b it is simply prohibited. A firm that transforms no maturities needs no bank capital held against them.

The price sits in paragraph 4. In bankruptcy these funds are neither privileged nor covered by deposit insurance, and clients must be told before a contract is signed. This is not a formality. It shifts the default risk from the system to the client, and it explains why the ceiling was drawn at CHF 100 million rather than higher.

The legal form is prescribed as well: a company limited by shares, a partnership limited by shares, or a limited liability company, with registered office and business in Switzerland.

For a payment gateway this shape fits surprisingly well. Money that rests between collection and payout for a few hours or days does not need to be invested. It needs to be there in full at all times and it needs to stay explainable. The authorisation forbids whatever else one might be tempted to do with it, which removes a temptation that has cost institutions elsewhere.

Newton is taking this path through Newton Wealth AG, whose pre-assessment with FINMA is under way. This piece is an explanation, not legal advice.