Sky News understands that Zilch, which has more than five million customers, will announce on Thursday that it has been awarded the licence by the Financial Conduct Authority (FCA).
It is also expected to say that it has deepened its relationship with Visa, the global payments network, by becoming a direct, principal member, which will pave the way for new payment-related collaborations between the two companies.
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The licensing move will be hailed by Zilch as an important milestone for the company ahead of the full-scale launch of Zilch Pay next year which is aimed at capturing a greater chunk of consumers’ spending through a one-click checkout process.
“This is a major step change for Zilch, bringing us firmly into the payments tent and giving us a true seat at the table to shape the ecosystem”, said Philip Belamant, co-founder and chief executive of Zilch.
“It opens the door to new opportunities, setting us up to move even faster, more efficiently and cost-effectively.
“In just five years, we’ve amassed over 5.3 million users and thousands of retail partners based on the strength of our proposition and product.”
The announcement will come weeks after Zilch, which has a commercial partnership with Arsenal Football Club, confirmed that it had secured a further $175m of debt and equity funding.
Zilch is valued at about $2bn, making it one of the UK’s most valuable fintechs, and rendering its ultimate choice of listing venue of intense interest to investors, peers and ministers who have set the objective of improving London’s lure as an IPO destination.
Mr Belamant has been an active participant in talks with regulators and policymakers about reforms to London’s listings regime.
Last year, he warned that Zilch could float outside the UK without meaningful efforts to incentivise “retail investors to buy and hold British stocks”.
Sources close to the company said Zilch had generated well over £750m in savings on interest and fees for customers since its launch.
Zilch has annual revenues of more than £150m, making it well-placed to snap up rivals which are too small to raise additional capital or list on the public markets, Sky News reported earlier this year.
The company’s investors include eBay, Goldman Sachs and Ventura Capital.
Zilch secured authorisation from the City watchdog in 2020, and offers customers a digital debit Visa card earning up to 5% of spending in rewards.
In the same app, customers can switch to a credit card, allowing them to spread repayments with zero interest over six weeks or three months, enabling them to build their credit record.
