By Samuel Norman

Smart money app Plum has managed to secure an e-money licence from the City watchdog, ***City AM ***can reveal, even as the volume of application approvals slump.

Plum – which was founded by the ex-head of banking for Wise Victor Trokoudes in 2016 – has received authorisation to operate as an Electric Money Institution (EMI) from the Financial Conduct Authority (FCA).

The move gives Plum the green light to essentially operate as a bank with a narrower scope through offering online transfers, prepaid cards and managing digital wallets.

The London-headquartered fintech boasts over 2m customers, which it automates “difficult” personal finance for.

Trokoudes said the new licence was a “huge milestone” that would allow the firm to “broaden [its] services further and offer new features”.

Plum pocketed £12.8m in income for the last financial year, according to Companies House filings. This was over double the £6.2m the previous year.

The fintech, which has a headcount of 169 employees, made a loss of £9.6m for the same period, which edged down from £14.3m the year prior.

Plum beats regulation frustration

Earlier this year, Klarna received the same stamp of approval from the watchdog allowing it to accelerate its transition into becoming a digital bank.

But firms have struggled to get the seal of approval from the regulator.

***City AM ***revealed in September just six e-money licence applications had been granted by the FCA over the course of nine months.

The data also revealed not a single EMI licence was granted in the fourth quarter of 2024, despite at least 10 applications being under consideration at the time.

The crucial licence permits firms to provide payment services and issue electronic money, making it an essential roadblock for Britain’s fintech startups.

The regulatory headache for the young firms come despite Chancellor Rachel Reeves’ mission to overhaul regulation and “slash red tape” across the City.

Reeves unveiled her package of reforms for the fintech industry as part of her Financial Services Growth and Competitiveness Strategy in July.

Last week, the Treasury set out new plans for short-term licences to allow fintech startups to kick into action ahead of full approval.

But the deregulation efforts have been criticised for failing to make waves, with anxiety across the sector rising as Britain slips in global rankings.

Industry leaders told ***City AM ***there was “no room for complacency” after new data from think tank Z/Yen showed Singapore, Hong Kong and Shenzhen had leapfrogged London in global fintech rankings.