The Public Ledger: Are Fintechs Becoming Less Consumer Friendly?

Hello, Fintech Friends!

The fintech industry was created to offer a better alternative to the traditional banking system, whose costly physical footprint and focus on affluent consumers and business customers left many younger and low-to-moderate income Americans unhappily banked, or not banked at all. The mission was relatively straightforward: utilize technology to deliver basic financial services to the masses faster and cheaper than the status quo.

On that score, success has been overwhelming: today, most Americans can open a checking account, attach a debit card, and spend freely without the specter of a monthly service fee if their balance falls below a certain threshold, they can trade stocks for free, send money to a friend, business, or organization without the hassle of writing a check or paying a fee to access their cash, and finance an online purchase at the point-of-sale and pay no interest or fees.

While these features have brought tens of millions of customers to the fintech industry since its inception, customers alone do not pay the bills—or make stock prices go higher. To meet the demands of the market, which can be boiled down to a simple directive of more growth and more profits, fintechs embarked on a journey to monetize their sizable customer bases.

Monetization comes in different shapes and sizes. In some cases, like a secured credit card, fintechs and consumers are working together to achieve a clearly defined favorable outcome for both parties: establishing a credit history for consumers and generating higher interchange revenue for fintechs. In other cases, fintechs are rightfully capturing value for the convenience they provide to consumers, some that have no other place to turn: a fee for instantly transferring funds to an outside account, accessing a portion of your paycheck in advance, or gaining access to short-term liquidity. The level of fee varies. Some are reasonable, while others place a more significant burden on the consumer. In still other cases, daylight between fintechs and the traditional banking system, which fintechs are quick to demonize, is narrowing: high interest installment loans (up to 36% APR), late fees, and fees for rescheduling a payment or paying with a certain type of instrument.

By all accounts, the efforts have borne fruit, as most fintechs have achieved meaningful profitability on an ‘adjusted’ basis and many are in the process of doing the same on a GAAP basis. From my perspective, the most important question for fintechs moving forward is how they balance the demands of the market with a desire to retain a clearly superior value proposition to the traditional banking system, which, after all, was their original mission.           

Bob Hammel

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On Wednesday morning, multiple media outlets were reporting that Visa*, Mastercard* and Stripe were close to launching a stablecoin platform that was described as a “collaborative infrastructure project designed to streamline the use of stablecoins for mainstream payments” with Coinbase potentially joining the venture. Although unconfirmed if it was the cause, shares of publicly traded payments and fintech companies, including Visa and Mastercard, were down significantly in early trade on Wednesday. In my opinion, the success of stablecoins for consumer payments will depend on consumer adoption, of which there is not a convincing case for as of yet. However, the major players are planning for that eventuality, which cannot be ignored.

Disclosure: As of June 3, 2026, I am long Visa and Mastercard.    

Read more: Stripe, Visa, Mastercard Near Launch of Joint Stablecoin Platform; Coinbase in Talks for Partnership

SoFi became latest fintech to roll out an AI-powered assistant to provide financial advice to its customer base with the launch of SoFi Coach earlier this week. Much like offerings from Block* (Moneybot for Cash App), OpenAI, and others, SoFi will enable customers to aggregate information from across all of their accounts to provide a complete financial picture, delivering advice and eventually taking actions on customers’ behalf.

Disclosure: As of June 3, 2026, I am long Block.     

Read more: Introducing SoFi Coach: An AI-Powered Financial Guide to Help Members Get Their Money Right

Shares of money transfer company Wise fell on Monday following media reports, and confirmation by the company, that it was under investigation by the Brussels’ public prosecutor’s office over whether Wise did enough to stop fraudulent activity across its platform. The office is examining transactions totaling $500 million. Many of the same media reports indicate the prosecutor’s office is close to finalizing a direct summons before the criminal court. Responding to the reports, Wise said it takes financial crime extremely seriously and is working with the Brussels prosecutor to respond to its queries and that no findings have been shared with Wise to date.             

Read more: Wise’s response to recent press articles