The Public Ledger: Lending Leads (Again)

Hello, Fintech Friends!

With the first half of 2026 officially in the books, it’s a good time to look back and see what’s worked, and what hasn’t, across payments and fintech. The first, and most obvious, observation is that, like 2025, lending-based business models have led the way again.

Of the names I follow most closely—which do not necessarily correspond to the data presented later in this article—four of the five first half 2026 top performers are either completely lending-based, or lend-centric, and include Sezzle, Dave, Block* and Affirm.

For the most part, these companies cater to lower-to-middle income consumers and their revenue models—in my opinion—more closely resemble traditional financial institutions: high stated and implied annual percentage rates (APRs) on both short-term and longer duration loans, inclusive of more aggressive fee structures.

Competitors Klarna and Chime, who promote their primarily spend-centric business models, have lagged behind during the first half, falling 30% and 19%, respectively. Not surprisingly, to align with the outperformers, Klarna and Chime are moving into higher-yielding, longer-duration lending, hoping to drive growth and improve profitability.

At the other end of the spectrum are…drumroll please…software-centric business models Toast and Shopify, down 22% and 29%, respectively. The bearish argument here is well known: AI will accelerate the production of software, lowering barriers to entry…or the proliferation of autonomous agents will render underlying software significantly less valuable. Of course, it did not help that Toast and Shopify carried among the highest valuation multiples across payments and fintech entering 2026.

So, where do we go from here? With the Iranian conflict potentially concluded, energy prices falling, and the labor market seemingly on more solid footing—but not necessarily strong—there’s hope consumer spending growth will maintain its solid pace through the back half of the year, which could certainly lift all boats across payments and fintech. Ongoing debates around the impact of AI and stablecoins are likely to continue unresolved.

Taking a step back, it’s important to see where the moves to-date have taken us in terms of valuation. Some people may be surprised that—according to Koyfin—Sezzle, Dave and Affirm all trade at premiums to Toast and Adyen* on an NTM P/E basis. I certainly am.

* As of July 1, 2026, I am long Block and Adyen

Bob Hammel

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Confirming reporting from a few weeks ago, yesterday, a consortium of financial services companies, including Visa*, Mastercard* and more than 140 other businesses, announced they are backing Open Standard, a new venture that will support the launch of Open USD, a stablecoin, later this year. Unlike current offerings, Open Standard will let partners mint and redeem Open USD at no cost and will share earnings on reserves backing Open USD with issuers. Circle, issuer of leading stablecoin USDC, which is not part of the consortium, fell sharply on the news as investors assessed the potential impact of increased competition on its business.

* As of July 1, 2026, I am long Visa and Mastercard

Read more: Consortium including Visa, Mastercard launch new global stablecoin

Last week, money transfer company Wise reported results for its full fiscal year ending March 31. Revenue grew 21%, pre-tax profit margin landed at 26%, above the high-end of its medium-term range, and underlying drivers of the business remain healthy: cross-border volume, card spend, and customer balances grew 31%, 37% and 40%, respectively. For the upcoming fiscal year, Wise expects to generate revenue growth at the middle of its medium-term range of 15-20% with pre-tax margin again at the higher-end of the 20-25% range. The company also boosted its share buyback by another $500 million. On take rate, Wise expects to lower it by 1-2 bps per quarter during fiscal 2027, sharing efficiencies with customers to capture additional volume and market share. Regarding the Brussel’s prosecutor’s office, which is investigating Wise over whether Wise did enough to stop fraudulent activity across its platform, Wise had no update, only reiterating that no detailed findings of the investigation had been shared with them.       

Read more: Wise Group plc reports Full Year 2026 Financial Results

On Wednesday, a Swedish court ruled Google must pay nearly $2 billion in damages to Klarna for prioritizing Google’s price-comparison tool in its search results over PriceRunner, a similar offering by Klarna. While I am no legal expert, it seems likely Google will appeal the ruling with an ultimate outcome uncertain. If eventually successful in securing the award, the $2 billion would be a major windfall for Klarna, which as of this writing, had a market cap of approximately $8 billion.

Read more: Google Must Pay Nearly $2 Billion to Klarna in Antitrust Case