Partner bank is another name for a sponsor bank, the licensed bank that stands behind a fintech company's products by holding customer deposits, giving access to payment systems or issuing cards under its own licence. The main entry explains the arrangement, the bank's responsibilities and the regulatory expectations that apply.
The two terms describe the same relationship from different angles. Sponsor bank is the technical term used in card network and payment system rules, where a member bank sponsors a non-member's access, for example as a BIN sponsor. Partner bank is the term fintech companies use in their marketing and customer disclosures, as in the familiar statement that a company is not a bank and that banking services are provided by its partner bank.
That disclosure matters to customers. Where deposits are held at the partner bank, often pooled in a for benefit of account, any FDIC insurance protects against the failure of the bank, not of the fintech company or of an intermediary keeping the records. Regulators have also stressed that the word partner does not dilute the bank's obligations: in a bank-fintech partnership, including one arranged through a banking as a service platform, the bank remains responsible for compliance.