While Revolut, Monzo and Starling chase multibillion-pound valuations, Atom Bank struggles to command a £600mn takeover price despite holding the largest loan book among UK app-only banks. The Newcastle-based lender's £5.3bn in outstanding loans trails the £1.7tn market. Yet its interest income of £443mn in 2025 lagged Monzo's roughly £886mn, revealing the cost of scale in lending.

Payments-focused rivals enjoy simpler growth mechanics. Each customer brings fees and deposits that can be parked profitably at the Bank of England without significant risk or expense. This model scales quickly, unlike Atom's loan-making approach where administrative and regulatory costs require substantial volume to justify. Even in mortgages, the return gap remains narrow in today's low-risk environment.

The lesson for payments specialists eyeing lending expansion is clear. Klarna shares plunged earlier this year when investors worried about overexpansion, despite management assurances about credit quality. Aggressive lending could spark price wars with incumbents like Lloyds while drawing regulator scrutiny. Growth that comes easily in payments may prove elusive in loans.

Atom's muted valuation reflects market reality: lending demands scale and carries risks that payments models avoid. As payments giants bulk up their lending operations, they'll need patience and capital discipline to match traditional banks' profitability.