A de novo with a unique business plan is hopeful the third time is the charm for applying for deposit insurance from the Federal Deposit Insurance Corp.

PayServices Inc., a monetary services business based in Florida that aims to provide governments and businesses with auditable, end-to-end traceability in banking and financial compliance, has withdrawn its application twice and filed for a third time March 16 after feedback from the FDIC. Still, the company's founder, Lionel Danenberg, said during an interview they "aren't afraid to have a marathon" in order to gain approval.

Danenberg said the company's unique technology is capable of overcoming compliance hurdles in correspondent banking and combating fraud by streamlining the financial compliance process. During this compliance process, PayServices needs to hold funds in an account for the duration of a transaction, which means the company needs access to a bank account or a banking license of its own to do business.

PayServices already gained approval for its business plan in 2016 when it obtained its money services business, or MSB, registration, which is typically held by check-cashing companies and is issued by the Financial Crimes Enforcement Network within the Treasury Department, Danenberg said. Regulations only permit MSBs to apply for accounts with privately held financial institutions, however, and PayServices has struggled to open an account with a bank in Florida. Therefore, PayServices needs a banking license in order to gain unfettered access to the U.S. financial system and freely conduct its business.

"A traditional bank collects deposits and expects you to leave those deposits in the account for as long as possible," Danenberg said. "When you're an MSB, the bank doesn't have the capacity to play with your money … the way they do with anybody else. They know that because you're an MSB, the money in that account … can go in and out of the account at any given moment. We are only dealing with electronic bank transfers and the issue is that even if you have a lawfully issued license by your state, you're not able to secure an MSB account for an activity like ours."

Regarding PayServices' repeated applications to the FDIC, COO Ron Raitan described the problem as "trying to fit a square peg into a round hole," as the company's nontraditional business model is clashing with the regulator's perception of how a bank should operate. In particular, PayServices executives said the company's status as an institution that does not issue loans is posing a major hurdle in its efforts to obtain approval from a regulatory body that largely functions to insure banks that take deposits and make loans.

"The FDIC, quite frankly, is an insurance company and we don't meet their particular requirement for insurance," said Raitan. "We are trying to mold to the requirements of the FDIC even though we don't fit into that model."

Additionally, the executives said the FDIC's lack of specificity in its feedback contributed to the company's decision to withdraw and reapply, but that they are addressing the regulator's feedback as thoroughly as possible and feel confident they will ultimately gain approval.

"We are confident that, at the end of the day, at some point we are going to be in the market," Danenberg said. "It's just a matter of time."