If you've been building an embedded payments product, you've probably enjoyed a relatively straightforward relationship with your sponsor bank: you integrate, you build on their rails, they take a cut.
That era is ending.
In 2026, sponsor banks are doing something they haven't done before: they're charging fintechs directly for compliance and data services. Not just transaction fees. Actual line-item charges for the work required to keep your product on their rails. This isn't punishment. It's math. Banks realized they were absorbing costs that should be priced into the partnership. Now they're correcting. If you haven't seen this conversation with your bank yet, you will. And you need to understand what's happening.
Understanding the Shift
For years, the sponsor bank model worked like this: you pay a per-transaction fee, the bank handles regulatory oversight, everyone's happy. But embedded payments scaled faster than anyone expected. Compliance grew. Data requirements grew. The bank's internal costs to support your product. At some point, the per-transaction fee stopped covering the real cost. Fintech-centric banks realized they were effectively subsidizing your innovation. Good for innovation. Bad for their balance sheet.
So, they're adjusting. Direct charges for KYC/KYB processing. Direct charges for compliance monitoring. Direct charges for data audits. This is coming to your contract. If it's not already there, set a calendar reminder for your next renewal conversation.
Why this Matters for Your Roadmap
Most fintech founders see this as a cost increase and freak out. Understandable. But that's surface-level thinking. What's really happening is the sponsor bank is signaling where the actual value is flowing. It's not the transaction. It's the compliance infrastructure that allows the transaction to exist.
If your unit economics were tight and you were relying on transaction fees alone, this hits hard. You need to either pass costs to users (which kills adoption) or find operational efficiencies (which costs engineering time). But here's the opportunity: understanding this cost structure lets you architect your product differently. Some fintech founders are rethinking which services they actually need from the sponsor bank versus what they can partner for elsewhere or build themselves. That's the real shift. You're no longer operating in a walled garden where the bank handles everything. You're operating in a partner ecosystem where you have choices.
What Banks are Actually Charging For
The charges typically break down into a few categories:
Compliance monitoring and audits. This is ongoing. Every user you onboard increases the bank's compliance burden. They want visibility into your KYC process and audit rights. Some banks are charging per audit or per user reviewed.
Data requirements. Banks need increasing data access to manage regulatory risk. API calls, transaction logs, user behavior data. These have real infrastructure costs. Some banks are now pricing data access separately.
Risk management. If your product carries elevated risk (lending, high-velocity transactions, specific geographies), the bank is pricing that risk management separately.
Higher-tier support. If your product requires white-glove compliance support from the bank's team, that's billable now instead of buried in transaction fees.
Prepare for your Conversation
If you're in embedded payments and haven't had this conversation yet, here's how to prepare:
First, understand your actual compliance footprint. How many users do you onboard monthly? How many transactions? What's the regulatory complexity? What does the bank actually need to do to keep your product compliant? Don't guess. Ask them. This conversation becomes easier when you've already done the work.
Second, audit your partner landscape. You don't have to take everything from the sponsor bank. Some founders are splitting services: sponsor bank handles the charter and core regulatory risk. A separate compliance vendor handles KYC. Another vendor handles fraud monitoring. You manage the coordination.
Third, model the cost impact. Get a quote from your sponsor bank. Don't negotiate yet. Just understand what's coming. Then model: can you absorb it? Should you pass it to users? Can you offset it with operational changes?
Fourth, start shopping alternatives. Even if you stay with your current bank, having competing offers strengthens your position. Other sponsor banks (CFSB, Sutton, Customers Bank, Cross River) all have embedded programs. Get pricing from at least one alternative.
How to Win
The founders who navigate this transition successfully are the ones who see it as a natural evolution, not a gotcha. Your sponsor bank isn't trying to kill your business. They're trying to align costs with value. Respect that. Be transparent about your growth plans and compliance profile. Be proactive about risk management.
And be realistic: if your margins can't support compliance costs at scale, you need to know that now, not when the bank's renewal offer arrives.
The embedded payments space is still booming. But the free-ride era of outsourcing all compliance to banks is over. You're moving to a more sophisticated model where you're a partner in risk management, not a passenger on their backend.
The sooner you accept that; the sooner you can architect your business to thrive in it. Ask us at Sila how we can save you considerable fees.