Cost Analysis Cost Breakdown and Budget Estimates Architecture alignment note (2026-02-14): This document is pre-architecture research from the mobilebank-research phase. Drop ultimately chose a PSD2 pass-through model — no wallet, no balance held, no own EMI license required for MVP. The pass-through model significantly reduces licensing and BaaS costs compared to the scenarios below. Card issuing is a FUTURE feature. This document is retained as cost research reference — actual Drop cost structure differs. Table of Contents Executive Summary Licensing Costs Development Costs Third-Party Provider Costs Infrastructure Costs Operational Costs Budget Scenarios 1. Executive Summary Total Investment Range Approach Initial (Year 1) Monthly Ops Break-even BaaS MVP EUR 150K-300K EUR 15-30K 18-24 months Full Build EUR 500K-1.5M EUR 50-100K 24-36 months Enterprise EUR 1.5M+ EUR 100K+ 36+ months Key Cost Drivers Licensing strategy (own vs. BaaS) Development approach (in-house vs. outsource) Feature complexity Geographic scope Transaction volume 2. Licensing Costs Option A: Own EMI License Jurisdiction Application Capital Setup (Legal/Consulting) Timeline Lithuania EUR 1,463 EUR 350,000 EUR 30-50K 6-9 months Malta EUR 2-5K EUR 350,000 EUR 40-60K 6 months Ireland EUR 4K EUR 350,000 EUR 200-300K 12-18 months UK (FCA) GBP 5,000 GBP 350,000 GBP 100-200K 6-12 months Lithuania Breakdown: Application fee: EUR 1,463 Capital requirement: EUR 350,000 (held in local bank) Legal/consulting: EUR 30,000-50,000 Directors/compliance staff: EUR 100,000+/year Total setup: ~EUR 400,000-500,000 Option B: BaaS Partnership (No Own License) Provider Setup Fee Monthly Minimum Per-Transaction Swan EUR 0-10K EUR 500-2K Volume-based Treezor EUR 10-50K EUR 2-5K Volume-based Solarisbank EUR 50-100K EUR 5-10K Custom Savings with BaaS: No EUR 350K capital lock-up No license application process Faster time to market (weeks vs. months) Compliance handled by provider 3. Development Costs MVP Development (4-6 months) Component In-House (Western EU) Outsource (Eastern EU) Outsource (Asia) Backend EUR 80-120K EUR 40-60K EUR 25-40K Mobile (Flutter) EUR 60-100K EUR 30-50K EUR 20-35K Frontend (Web) EUR 30-50K EUR 15-25K EUR 10-18K DevOps/Infra EUR 20-40K EUR 10-20K EUR 8-15K QA/Testing EUR 20-30K EUR 10-15K EUR 6-10K Total EUR 210-340K EUR 105-170K EUR 69-118K Feature-Level Costs Feature Development Cost Notes User onboarding EUR 8-15K Auth, registration KYC integration EUR 15-30K Third-party API Account management EUR 20-35K Core functionality Virtual card EUR 25-40K Issuing integration P2P transfers EUR 15-25K Internal + SEPA Card top-up EUR 10-20K Payment gateway Push notifications EUR 5-10K FCM/APNS Transaction history EUR 8-12K UI + backend Card controls EUR 10-15K Freeze, limits Team Composition (MVP) Role Count Monthly Cost (EU) Tech Lead 1 EUR 8-12K Backend Dev (Senior) 2 EUR 12-18K Mobile Dev (Senior) 2 EUR 12-18K DevOps 1 EUR 6-9K QA 1 EUR 4-6K Product Manager 1 EUR 6-10K Designer 0.5 EUR 3-5K Total 8.5 EUR 51-78K/month Outsourcing Savings: 40-60% vs. Western EU rates 4. Third-Party Provider Costs BaaS Provider Costs Provider Setup Monthly Per Account Notes Swan Free-10K EUR 500-2K EUR 0.50-2 Fast integration Treezor EUR 10-30K EUR 2-5K Included SEPA optimized Solarisbank EUR 50-100K EUR 5-10K Custom Full stack Card Issuing Costs Provider Setup Per Card Transaction Fee Marqeta EUR 5-50K EUR 0.50-2 0.5-1% Stripe Issuing Free EUR 0.10-0.50 Included Adyen Custom Custom Custom KYC/Identity Verification Provider Per Verification Volume Discount Sumsub EUR 0.50-2.00 Yes (>10K/month) Onfido EUR 1.00-3.00 Yes IDnow EUR 2.00-5.00 Yes Example (10K users/month): Sumsub: EUR 5,000-20,000/month Volume pricing reduces to EUR 0.30-0.50/verification Payment Processing Provider Setup Per Transaction Notes Stripe Free 1.4% + EUR 0.25 (EU) Easy integration Adyen Free EUR 0.10-0.15 + interchange Enterprise Virtual IBAN Provider Per IBAN Monthly Maintenance OpenPayd EUR 1-5 EUR 0-1 Banking Circle Custom Volume-based Usually included in BaaS - - 5. Infrastructure Costs Cloud Infrastructure (AWS/GCP) Component Monthly Cost Notes Compute (K8s cluster) EUR 1,500-3,000 3-5 nodes Database (RDS/Cloud SQL) EUR 500-1,500 Multi-AZ Redis (ElastiCache) EUR 200-500 Cluster mode Storage (S3) EUR 100-300 Documents, backups CDN (CloudFlare) EUR 200-500 Pro/Business Monitoring (Datadog) EUR 300-800 APM included Total EUR 2,800-6,600 Scales with users Cost Per User Users Infrastructure Third-Party Total/User 1,000 EUR 3/user EUR 5/user EUR 8/user 10,000 EUR 1/user EUR 3/user EUR 4/user 100,000 EUR 0.50/user EUR 2/user EUR 2.50/user 6. Operational Costs Monthly Operational Expenses Category MVP Phase Growth Phase Scale Phase Team (salaries) EUR 30-50K EUR 80-150K EUR 200K+ Infrastructure EUR 3-5K EUR 10-20K EUR 50K+ Third-party services EUR 5-10K EUR 20-50K EUR 100K+ Compliance EUR 5-10K EUR 15-30K EUR 50K+ Customer support EUR 2-5K EUR 10-20K EUR 30K+ Marketing EUR 5-15K EUR 30-100K EUR 200K+ Legal/Professional EUR 2-5K EUR 5-15K EUR 20K+ Office/Admin EUR 2-5K EUR 5-10K EUR 15K+ Total EUR 54-105K EUR 175-395K EUR 665K+ Per-User Economics Metric Amount Notes Customer Acquisition Cost EUR 20-50 Marketing + onboarding First-year serving cost EUR 175 Fixed costs Monthly serving cost EUR 5 Infrastructure + support Required spend for breakeven EUR 750/month Year 1 Compliance Costs Item Annual Cost Compliance Officer (FTE) EUR 80-120K AML monitoring tools EUR 20-50K External audits EUR 30-60K Regulatory reporting EUR 10-20K Training & certification EUR 5-10K Total EUR 145-260K 7. Budget Scenarios Scenario A: Lean BaaS MVP Assumptions: BaaS partnership (Swan) Outsourced development (Eastern EU) 6-month timeline Target: 5,000 users Year 1 Category Year 1 Monthly (Avg) Development EUR 150,000 - BaaS setup + fees EUR 20,000 EUR 2,000 KYC (5K verifications) EUR 10,000 EUR 1,000 Infrastructure EUR 36,000 EUR 3,000 Operations (lean) EUR 120,000 EUR 10,000 Marketing EUR 60,000 EUR 5,000 Legal/Compliance EUR 30,000 EUR 2,500 Buffer (15%) EUR 64,000 - Total Year 1 EUR 490,000 EUR 23,500 Scenario B: Standard Build Assumptions: Own EMI license (Lithuania) Mixed team (in-house + outsource) 12-month timeline Target: 20,000 users Year 1 Category Year 1 Monthly (Avg) EMI License EUR 450,000 - Development EUR 300,000 - Card program EUR 50,000 EUR 5,000 KYC (20K verifications) EUR 30,000 EUR 3,000 Infrastructure EUR 72,000 EUR 6,000 Operations EUR 480,000 EUR 40,000 Marketing EUR 200,000 EUR 17,000 Legal/Compliance EUR 150,000 EUR 12,500 Buffer (20%) EUR 346,000 - Total Year 1 EUR 2,078,000 EUR 83,500 Scenario C: Enterprise Launch Assumptions: Own license (Ireland for prestige) Full in-house team Custom core banking Target: 100,000 users Year 1 Category Year 1 EMI License (Ireland) EUR 800,000 Development EUR 800,000 Core banking platform EUR 300,000 Card program EUR 150,000 KYC (100K verifications) EUR 100,000 Infrastructure EUR 300,000 Operations EUR 1,500,000 Marketing EUR 1,000,000 Legal/Compliance EUR 400,000 Buffer (25%) EUR 1,337,500 Total Year 1 EUR 6,687,500 Cost Optimization Strategies Development Outsource to Eastern EU (40-60% savings) Use BaaS to reduce custom development Cross-platform mobile (Flutter) vs. native Licensing Start with BaaS, migrate to own license later Lithuania over Ireland (70% cheaper) Small EMI if eligible Operations AI chatbots reduce support costs 60% Automated KYC reduces manual review Cloud-native for elastic scaling Marketing Referral programs (lower CAC) Partnership distribution Niche targeting Financial Model Summary Unit Economics Target Metric Target CAC < EUR 30 LTV > EUR 150 LTV:CAC > 5:1 Payback period < 12 months Gross margin > 60% Revenue Model Stream Revenue/User/Year Interchange EUR 15-30 FX markup EUR 10-20 Premium subscription EUR 60-120 Interest income EUR 5-15 Total potential EUR 90-185 Break-even Analysis Scenario Users Required Timeline BaaS MVP 5,000-10,000 18-24 months Standard 20,000-30,000 24-36 months Enterprise 50,000+ 36+ months Sources Neobank Development Cost - ITExus Banking App Development Cost - Leanware EMI License Costs - Tangle.ee Neobank Industry Statistics - Coinlaw Start a Neobank Guide - RND Point Adyen Pricing - Finexer