Yapeal Shifts to B2B and Embedded Finance, Eyes European Expansion

Swiss fintech company Yapeal has repositioned itself. Instead of continuing to focus on the competitive retail banking market, the company has shifted its focus over the past three years, concentrating consistently on B2B and B2B2X models in the embedded finance sector.

This strategic realignment is paying off: growth is accelerating, investors are optimistic, and the fintech company is approaching break-even.

Fintech license number 1

Yapeal is one of the few providers in Switzerland that still holds a fintech license. Currently, there are four – Yapeal was the first provider to receive this authorization. The license allows the company to accept customer funds and process payments; lending is prohibited. Customer funds are held in segregated accounts.

From B2C approach to platform strategy

Yapeal originally launched as a digital banking app for private customers. While the model gained users, it quickly reached its limits in the Swiss market. International heavyweights like Revolut and N26, as well as numerous domestic neobanks with financially and sales-strong parent companies, made economies of scale difficult for an independent provider.

The turning point came with the decision to make its technology available to third-party providers. An early reference project is the collaboration with Vontobel: The entire digital onboarding and KYC process of the digital bank Volt runs on the Yapeal platform.

“By 2023 at the latest, it became clear that the company’s strengths lay less in the end-customer business and more in its role as an infrastructure and compliance partner,” CEO Michael Eidel said.

Three clusters – plus a fourth pillar for Yapeal

Today Yapeal focuses on three core areas:

Cards as a Service for banks: Private banks in particular often outsource their card business to large providers. Yapeal enables them to use their own license and technology to offer tailored card solutions for wealthy clients again – including individual features and benefits.

Embedded finance for digital platforms: Account and card solutions are integrated directly into digital business models. One example is Swibeco, which manages employee benefits for large Swiss companies. Yapeal provides the integrated card and account infrastructure in the background.

Market entry for foreign fintechs: More and more European fintechs want to expand into Switzerland, but fail due to regulations, payment infrastructure, or local integration. Yapeal offers “compliance and platform as a service” – including connection to Swiss systems like SIC or local payment standards like eBill.

This is complemented by a fourth pillar: digital business accounts for Swiss SMEs. Dozens of new corporate clients are added every month, all of whom undergo a fully digital onboarding process. They can issue expense cards to their employees and directly link their accounting with payment and card processes.

Break-even point targeted within three years at the latest

The realignment is proving effective. Sales in the core business are currently growing by 30 to 40 percent per quarter. Investors are supporting the chosen course until the break-even point is reached, which is expected in two to three years.

But Yapeal’s growth ambitions don’t end there. Eidel: “In the long term, the Swiss market alone isn’t enough. A digital business model like ours thrives on scaling our services.”

Yapeal is therefore preparing to expand into Europe, likely via an e-money institution license, for example in Liechtenstein. The goal would be to scale the digital business model outside of Switzerland in the medium term.

Stablecoins as an option, not an end in themselves

With the ongoing revision of the Financial Institutions Act, Yapeal is also observing new regulatory opportunities, for example in the area of ​​stablecoins. The company is already active at the intersection of fiat payments, digital assets, and tokenized solutions. However, launching its own stablecoin is not a short-term goal, as CEO Eidel emphasizes. The crucial factor is whether it can solve real customer problems.

Criticism of the regulation

While Yapeal is satisfied with its own positioning, it takes a critical view of the Swiss fintech landscape. The number of licensed providers is small, and the approval processes are considered lengthy and lack transparency. Management sees room for improvement in international comparison – especially for a country that prides itself on being an innovation hub.

For Yapeal itself, however, a clear credo applies for the time being: maintain focus, deliver, build trust. Only then will new business areas follow.

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(Featured image by SumUp via Unsplash)

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First published in Finews. A third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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