Hello, Fintech Friends!

It’s December, which means it’s time to wrap up the year. And for public fintech companies, it wasn’t an easy one. There were bright spots, and a few very bright ones, like Robinhood, but for the most part, 2025 was a tough year. The TWIF Index did its job, correctly reflecting that pain.

Incumbents struggled the most. FIS and Global Payments announced a blockbuster deal that the market didn’t seem to appreciate. Fiserv had an outright brutal year, losing nearly three-quarters of its value as it was forced to reset growth expectations under the new leadership.

Fintech IPOs finally came back. There were cheers, first-day pops, and optimism that fintech was back. But the excitement didn’t last. Most newly public companies now trade below their IPO prices, reminding us that public markets can be brutal and bringing back memories of 2021.

And then there were stablecoins. They promise programmable, global, 24/7 money movement, but they also raise hard questions. How do stablecoins change the payments landscape? And who, exactly, will win and lose as they scale?

Let’s look back at what defined fintech in 2025 and take the best of it with us into 2026!

Jevgenijs
p.s. Have feedback? Ping me on X/Twitter
Happy to hear how we can improve this column!

Best-Performing Fintech Stocks

At the start of the year, I pointed out a pattern: in both 2023 and 2024, a handful of left-for-dead fintech stocks ended up topping the performance charts. In 2023, those were Affirm, Coinbase, and MoneyLion. In 2024, it was Sezzle, Dave, and Zip. I suggested that in 2025, the same might happen with names like Better, Pagaya, and Oportun. Well…

Worst-Performing Fintech Stocks

We don’t usually publish a chart of the worst-performing fintech stocks (and don’t plan to do so going forward). But looking back at 2025, it felt important to include it this time. If you look at the chart below, one thing stands out: most of the worst-performing stocks are payments companies.

Performance by Segment

At the beginning of the year, we introduced a new section: stock performance by segment. Grouping fintech companies into buckets isn’t easy, but as with the TWIF Index, the goal wasn’t scientific precision; it was to give a rough temperature check by segment.

The year started well for most segments, with lenders off to an early lead. But by mid-year, the charts began to signal growing pain across public fintech stocks, especially among payments companies. It didn’t seem to matter what kind of payments they focused on, merchant acquiring or cross-border, all struggled. Even Visa and Mastercard underperformed the indices.

One might assume this reflects rising fears of an economic recession. But this doesn’t line up with the performance of lenders. Lenders had a strong year, nearly across the board, from American Express and Capital One to SoFi, LendingClub, and Sezzle. If investors were truly pricing in a recession, consumer lenders wouldn’t be outperforming.

And then there are brokerages. Robinhood had another fantastic year, but Interactive Brokers and Charles Schwab also did well. This suggests investors are positioning for another year of strong markets (brokerages tend to struggle during market corrections). As the Fed cuts rates, borrowing becomes cheaper, risk-taking increases, and investors tend to rotate back into growth assets.

So what is the market telling us? That consumers may struggle, but lenders will step in by extending more credit, funded more cheaply as rates fall and investors search for yield? The open question is how long this playbook can last.

Highlights of the Year

A Year When the TWIF Index Underperformed

Owning the incumbents used to be the safe trade in fintech. Scale and distribution acted as near-perfect moats. In 2025, that assumption finally cracked. The TWIF Index badly underperformed both the S&P 500 and Nasdaq (-3% YTD vs. +16% YTD for the S&P 500, and +22% YTD for Nasdaq), driven not by newer fintechs, but by the industry’s incumbents.

The biggest drag on the TWIF Index came from the industry's giants: FICO, Fiserv, FIS, PayPal, and Global Payments. These companies were supposed to be boring, predictable compounders. Instead, FICO had a rocky year following regulatory shifts that challenged its monopoly, while Fiserv shocked the market with what effectively amounted to a public admission of years of underinvestment and a full reset of growth expectations.

This time, Visa and Mastercard couldn't help either. Both underperformed major indices, a rare outcome historically. The concern isn’t near-term volumes or consumer spend; it’s narrative. It looks like investors are struggling to underwrite what card networks look like in a world where stablecoins make money move instantly, programmatically, and increasingly outside traditional rails.

The uncomfortable question is whether 2025 marks an inflection point. Are incumbents in a cyclical drawdown, or is this the start of structural erosion? Scale and distribution no longer feel sufficient. For the first time since fintech became a term, technology may be the moat. Which is pretty cool, and would likely require a review of the TWIF Index’s composition.

A Year When Fintech IPOs Came Back

After years of waiting, fintech IPOs finally returned in 2025. Chime, Klarna, eToro, Gemini, Bullish, Navan, and others reopened the public markets. Each listing was celebrated by investors and delivered a meaningful first-day pop. The strong debuts even sparked the regular debate about whether investment banks misprice IPOs on purpose.

Unfortunately, the excitement faded quickly. Nearly every newly public fintech now trades below its IPO price, often by a wide margin. Even Circle’s extraordinary run has reversed: the company priced its IPO at $31 per share, surged to nearly $300, and now trades around $85. The narrative has shifted from celebration to familiar debates about valuation multiples and the sustainability of growth.

This feels familiar. Many fintech companies went public in 2021. Some of them still trade below their IPO prices today. Back then, the outcome was understandable: that IPO cohort ran straight into an unprecedented pace of rate hikes in 2022. This time, however, the Fed is cutting rates, a setup that should favor growth stocks. And yet, fintech IPOs are still struggling. So what’s going on?

Maybe the lesson is simpler. Perhaps IPOs are just not great investments, fintech or otherwise? Companies tend to go public when markets are hot and growth charts look perfect. No one rings the bell when conditions are ugly. I don’t know whether the current IPO window is already closing, or when the next one will open. But I’m probably sitting the next one out.

A Year of Big Payment Deals

2025 was also a big year for deals. Capital One completed its acquisition of Discover in an all-stock transaction valued at roughly $35 billion and began migrating cards onto the Discover network. The deal created the largest credit card lender in the U.S. and, more importantly, a card network that can finally rival Amex in scale.

The three-way deal between FIS, Worldpay, and Global Payments was just as important. Global Payments will buy Worldpay from FIS and GTCR, while selling its issuer processing business to FIS in return. Global Payments will receive $13.5 billion for its issuing unit and will pay $22.7 billion to acquire Worldpay. Once closed, the transaction will create one of the largest merchant acquirers in the world.

Stripe took a very different approach. Instead of buying more scale, it leaned into where payments are going next. Stripe completed the acquisition of Bridge, a stablecoin orchestration platform, for roughly $1.1 billion and later picked up Privy, a wallet infrastructure provider, going all in on stablecoins and programmable money. It’s a bet on new rails, not market share in the existing pool.

And then there’s Adyen. No splashy deals, no big announcements, just quiet execution. Adyen processed roughly $1.5 trillion in payments over the last twelve months and continues to grow. Maybe that reflects confidence in its ability to win market share organically. Maybe something is coming later. Either way, in a year full of loud moves, Adyen’s silence stands out.

A Year When Stablecoins Became a Thing

If there was one theme that dominated fintech in 2025, it was stablecoins. For years, stablecoins lived in a parallel universe, mostly outside mainstream fintech discussions. This year, they moved decisively to the center. Over the past five years, the circulating supply of stablecoins has grown almost ninefold, surpassing $300 billion. Payment companies, neobanks, and even card networks were forced to respond.

Visa and Mastercard enabled settlement of card transactions in stablecoins. Klarna announced its own stablecoin, KlarnaUSD*. Cash App said it would allow users to send and receive stablecoins (yes, stablecoins, not Bitcoin). And Coinbase showed where this all is heading by integrating the DeFi protocol Morpho, allowing users to earn yield on their stablecoins.

Stablecoins have already proven their value in cross-border payments and emerging markets. Shopify, Coinbase, and Stripe are experimenting with stablecoins in commerce. Startups are building neobanks on stablecoin rails. And when agentic commerce takes off, it will likely be powered by stablecoins. Still, there remains a clear gap between excitement and stablecoin payment volume.

That said, most stablecoin discussions still focus on replacing existing payment flows. Stablecoins are fast, cheap, and inherently global, something you cannot say about traditional payment rails. But the most interesting part may be what happens once money starts moving instantly and 24/7. We still don’t know what this will enable. Smartphones unlocked real-time, on-demand services that didn’t exist before. Stablecoins could do the same for money.

Multiples

Valuation multiples have compressed since the beginning of the year, yet the same companies continue to dominate the rankings.

Median Enterprise Value / EBITDA multiples

Highest Enterprise Value / EBITDA multiples

Median Price / Earnings multiples

Highest Price / Earnings multiples

* The author works at Tempo, Klarna's partner in launching KlarnaUSD. The author's opinions do not represent the opinions of Tempo.