The Public Ledger: The Final Fintech Test

Hello, Fintech Friends!

Banks started reporting their first-quarter results this week. Everyone will be watching what they say about the health of the consumer and the state of the U.S. economy.

It's become almost a ritual for bank execs to open their calls with some version of "the consumer remains healthy." Jamie Dimon's annual letter last week was no different. Consumers are "still earning and spending," he wrote. Then came the caveat: "though with some recent weakening."

There's a reason for that. Dimon called geopolitics his number one risk, warning of "significant ongoing oil and commodity price shocks." The war in Iran pushed oil above $100 a barrel. The U.S. economy has been through a lot. This could be the one that tips it into a recession.

So what if the recession actually comes? For fintechs, it would be the final test.

Since I started my career in financial services more than a decade ago, the critics have had one consistent line: fintech models are untested by a recession.

And they're right. The last real recession was the GFC. The COVID downturn was short and its impact was distorted by trillions in government stimulus.

Dimon named Block, Revolut, and Stripe among "the most successful examples" of new competitors. But how many of them have operated through a recession?

We don't know how the loan portfolios at LendingClub or SoFi will perform in a genuine downturn. Same for BNPL. None of these businesses existed at any meaningful scale before 2008.

Same for neobanks. Cash App and Chime have millions of customers that traditional banks can’t, or don't want to, serve. Those customers probably aren't going anywhere. But they're also the ones who get hit hardest in a downturn.

We also don't know how online payment processors will hold up. Online commerce grew rapidly since the GFC, and companies like Stripe and Adyen built their businesses on that secular trend. I mean, Stripe was not founded until 2010.

So a recession, as ugly as it would be for consumers and businesses, could actually benefit fintechs. It would take away the last argument the skeptics have left: that fintech models have never been tested by a real downturn.

A recession would be the final fintech test.

Jev

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Wise $WISE published its Q4 FY26 trading update for the quarter ended March 31. Cross-border volume grew 26% YoY to £49.4B. Underlying income rose 24% YoY to £435.3M. Active customers reached 11.3 million, up 22% YoY.

Wise continues to diversify beyond cross-border transfers through the Wise account. Customer holdings grew 37% YoY to £29.4B, card and other revenue rose 29% YoY. For the full fiscal year, volume grew 25% YoY to £181.7B and underlying income rose 18% YoY to £1.6B. The take rate fell again to 0.51% as Wise keeps cutting prices in pursuit of its mission.

Wise expects to list on Nasdaq on May 11, with London becoming the secondary listing. The full-year report will be published in USD under US GAAP. Will a US listing get Wise the valuation that London hasn't?

Read more: Wise Q4 FY26 Trading Update

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Circle makes most of its revenue from USDC reserve yield, which moves with interest rates. Interest rates going down is the key to the bear case. Between Circle Payments Network, Arc, StableFX, and a tokenized money market fund, Circle is building fee revenue as fast as it can. The question is whether any of it scales before rates come down.

Read more: Circle Launches CPN Managed Payments

American Express $AXP ( ▲ 0.64% ) launched its Agentic Commerce Experiences developer kit, a framework that lets AI agents make purchases on the Amex network on behalf of cardholders. The standout feature: Amex Agent Purchase Protection. If a registered AI agent gets a purchase wrong, Amex covers it.

All three card networks are now building infrastructure for AI agents to shop and pay. Visa $V ( ▲ 1.46% ) got here first with its Intelligent Commerce platform launch earlier this year. Mastercard $MA ( ▲ 1.4% ) followed with Agent Pay. Amex is the latest in, betting that purchase protection is what gets consumers to actually trust an AI with their card.

Read more: American Express Debuts Agentic Commerce Experiences