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Happy Monday, Fintech Takers!
I hope you had a good weekend. Mine was a bit rough (sick kids), but we fight on!
No travel for the next couple of weeks, which is a blessing. Money20/20 is the next big event on my (and everyone’s) docket, and if you’ll be there, take a look at the list of events below. Would love to have you join me at any (or all) of them!
This image is not AI-generated. There was a literal rainbow over the MSU Bobcat football stadium this weekend! The scenery matched my mood, as the Bobcats walloped Idaho State. Go Cats!
Square announced several upgrades and features to its platform this week, including an expansion of tools for restaurant owners and operators, new intelligence capabilities under its Square AI suite, and the unveiling of Square Bitcoin, allowing platform users to conduct transactions in Bitcoin.
As a cherry on top, Cash App, a sister company to Square under its parent firm, Block, also announced Neighborhoods, a feature that connects customers with local businesses, creating local networks in which customers can place orders and accumulate rewards points to spend with nearby businesses, and helps those businesses create followings and marketing channels all within Cash App itself.
So what?
The knock on Block (I’m so sorry) recently has been that the company has stopped innovating and that the teams running Square and Cash App have lost the ability to collaborate.
Jack Dorsey has been taking drastic steps to get the company back on track. And these recent announcements (what Block calls “Releases”) would seem to be evidence of a more focused and well-integrated approach to product development.
Let’s quickly review them.
First, we have Square Bitcoin, which is a new integrated set of Bitcoin capabilities for merchants. It includes the ability to accept bitcoin as a form of payment at the point of sale (with zero processing fees until 2027), an integrated custodial wallet for buying, holding, and selling bitcoin, and the expanded ability for merchants to automatically convert up to 50% of their daily sales into bitcoin.
I have two reactions to this.
First, has anyone at Block seen the results of the Federal Reserve’s Survey of Household Economics and Decisionmaking (SHED)? Among its many interesting findings, the SHED data tells us that the share of U.S. consumers who report using cryptocurrency for payments — purchases, money transfers, or both — has been very small and has declined slightly in recent years, from nearly 3% in 2021 and 2022 to less than 2% in 2023 and 2024. Additionally, SHED data tells us that in 2024, the overwhelming reason that people paid with crypto was because the “person or business receiving the money preferred cryptocurrency”. This is a change from earlier years, where other attributes like speed and privacy were significant motivations for crypto payment use as well. Does it concern Jack Dorsey that consumers seem increasingly unlikely to see paying with crypto as anything other than a burden imposed by merchants?
Second, I admire Dorsey’s stubborn refusal to jump on the stablecoin hype train, even though stablecoins are a much more natural tool for payments than bitcoin is, and Block has one of the most legitimately compelling cases for issuing its own stablecoin (massive scale, closed-loop ecosystem, passion for moving finance on-chain, etc.) I don’t understand Dorsey’s intense passion for Bitcoin, but I admire that it’s clearly motivated by something besides Block’s stock price.
The other two announcements are much easier to parse.
The focus on restaurants represents a sharpening of Square’s vertical ambitions and a recognition that much of the company’s existing POS market penetration is in the food and beverage space. However, I will be curious to see how quickly Square can catch up to its competitors in this vertical (Toast, SpotOn, etc.) Even the company’s newest offering for restaurants — Order Guide, a tool that leverages AI to help restaurant owners dig into their revenue and costs and look for alternative suppliers — isn’t novel. SpotOn already has a startlingly similar feature.
And finally, we have Neighborhoods. I’ll let Square describe the vision:
Neighborhoods [is] a new network between Cash App and Square that gives local businesses the ability to offer online ordering with the power of a mobile app. Sellers get their own branded storefront, accessible both on the open web and inside Cash App. Customers can seamlessly order ahead, reorder, earn rewards, and stay connected — always logged in and able to find and support the businesses they love.
We're continuing to scale our neighborhood commerce services to merchants, creating an experience that makes your neighborhood feel like your own members club. Local merchants already know you, you get best-in-class hospitality and service, can pay with points or charge to your room, and access unique benefits like our automatic FSA/HSA reimbursements, complimentary items at fitness studios, and much more.
Our AI-powered neighborhood concierge helps introduce our residents to local merchants with personalized recommendations, strengthening the local economy while enhancing the member experience. This isn't just about transactions—it's about building vibrant communities where people truly love where they live.
I guess you can’t really fault Block. If your goal is to get back to innovating, after a period of torpor, I can see how it would be easier to start by following the roadmap that others have laid down, before you (hopefully) get back to following your own.
#2: AP/AR AI Agents
What happened?
Ramp launched AI agents for accounts payable (AP):
Agents for AP use the same context finance teams and approval stakeholders rely on to make decisions autonomously, connecting each invoice with vendor records, contracts, purchase orders, and approval history. Agents for AP can:
Code invoices – Agents learn and apply logic from historical data and invoice details, like product IDs and shipping addresses, to input general ledger codes for each line item. Agents for AP now handle most invoice coding tasks automatically, applying learned logic to get 85% of accounting fields right the first time and continuously improving with every cycle.
Streamline approvals with recommendations – Agents provide approval recommendations and a summary of vendor history, contracts, prior bills, and coding consistency, giving approvers all the information to make a decision without searching.
Apply card payments – Agents find card payment opportunities directly in the vendor's payment portal, eliminating manual entry and capturing cashback.
And a startup, Lunos AI, raised a preseed round to build AI agents for the other side of the transaction:
Lunos AI, a New York-based fintech startup focused on automating accounts receivable through AI agents, has secured a $5 million pre-seed funding round.
The company will use the funds to expand its team and enhance the capabilities of its AI agents by adding reconciliation, payment orchestration, and end-to-end cash flow optimization. Lunos is also developing embedded AI agents for direct integration into accounting, invoicing, and CRM platforms.
So what?
In the not-too-distant future, the B2B payments process may be predominantly orchestrated by AI agents, interacting with each other through standardized integration protocols, rather than by humans.
This triggers a few different thoughts for me:
The B2B payments process is, largely, an exercise in using leverage (or having it used on you). Pricing. Invoice terms. Payment methods. These are all things that the party with more leverage dictates. How will AI agents perceive and utilize leverage? Ramp talks about finding opportunities to pay with a credit card, which is beneficial for the payer and detrimental to the payee. Could Lunos AI’s AR agent hide that option from Ramp’s AP agent, or dissuade it from choosing it? What will these agent-to-agent negotiations look like?
Who gets to define how the market between AP and AR agents works? Who builds the integration protocol? I know Ramp is laser-focused on expense management, but it might behoove it to try to extend itself a bit more into the AR side of the ledger, if only so that it can define how this market takes shape. It already helps its customers find the lowest price in the procurement process. This seems like a natural extension.
Both Ramp and Lunos AI frame the capabilities of their AI agents in augmentative terms, meaning that they see these tools as making the humans involved in AP and AR vastly more efficient, but not cutting them out of the process entirely (at least not yet). This fits with my overarching thesis that the opportunity with generative AI in financial services is around augmentation, rather than automation.
(Editor’s Note — If you are curious to learn more about this topic, make sure to listen to this week’s Not Fintech Investment Advice podcast. Simon and I talk about Lunos AI and the emerging AP/AR AI Agents market.)
#3: Tipping = Temptation
What happened?
MoneyLion has gotten itself into some hot water with the city of Baltimore:
The City of Baltimore has sued 12-year-old fintech MoneyLion, accusing it of deceptive and unfair practices related to its cash advances to consumers. The city alleges that MoneyLion charges interest at annual percentage rates (APRs) that regularly exceed 350%, or more than ten times Maryland’s legal cap of 33%. Among other claims, Baltimore also accuses the New York company of aggressively encouraging its customers to provide tips and falsely claiming its cash advances aren’t loans.
So what?
If you know me at all, you know what the focus of my analysis on this story is going to be.
However, before we get there, I do want to mention how darkly humorous I find it that Baltimore is suing MoneyLion. Not the state of Maryland. Not the CFPB or the FTC. Baltimore. What a great illustration of the state of consumer protection in 2025. As Baltimore City Solicitor Ebony Thompson said in the press release, “With the federal government now abdicating its responsibilities to consumers, states and localities must pick up the slack.”
Now, on to the primary point of my analysis: tipping.
I’ve been on record for quite some time about how bad I think optional tipping is, as a business model, in fintech. The biggest problem I’ve always had with it is the flexibility it affords companies to, at any time, give in to their darker temptations.
Optional tipping, if implemented in a carefully constrained and rigorously neutral way, is fine, I guess. It’s not great. It’s embarrassing. And confusing for customers. And difficult to model or predict or build a business around. But, from a consumer fairness perspective, it’s not the absolute worst.
But what if the fintech company has a bad quarter? Or needs more revenue to attract additional funding? Or needs to make up revenue after it loses a big distribution partnership? Or one of 1,000 other routine, run-of-the-mill challenges that occur every week?
Well, then it becomes awfully tempting to do what you promised yourself you would never do: adjust some of those constraints and make the way you ask customers for tips a little less neutral.
This is, essentially, what Baltimore is accusing MoneyLion of having done:
The suit also accuses MoneyLion of digitally badgering its customers to provide a tip, though the lender’s pricing page says the tips are completely optional. For instance, if a customer applying for an advance in the MoneyLion app changes the suggested tip to $0, a screen appears that says, “Are you sure? Tips help ensure that we can keep offering 0% APR Instacash advances to you.” And if a user didn’t provide a tip for one advance and begins to apply for another, a separate screen reminds the person in large font, “Looks like we didn’t get a tip last time!”
Charging fixed fees, either transactionally or as a recurring subscription, limits the ability of companies to engage in this type of nonsense. You still see some manifestation of dark patterns on the back end (making it difficult to cancel subscriptions is a very common one), but the front end stays relatively clean. You raise prices (and get fewer customers but a better margin) or you lower prices (and get more customers but a lower margin). The model itself helps hold you accountable for providing value to your customers.
Tipping expands the surface area for tempting companies into dark patterns. That’s why it’s bad.
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MONEY20/20 SPOTLIGHT
It’s officially Money 20/20 season, which means I’ll be highlighting a handful of sessions, meetups, and happenings in every newsletter.
I’m thrilled to be moderating this discussion at Money20/20, featuring the head of fraud at Varo and the co-founders and CEOs of SentiLink and Oscilar.
Start the AM with lending leaders unpacking the real-world journey of cash flow analytics (where to begin, how to apply it, and what it takes to make it work). Breakfast, networking, and discussion included! RSVP here.
Small panel conversation featuring Jane Barratt (Chief Advocacy Officer, MX) and yours truly (among others!), followed by drinks and hors d’oeuvres at The Grand Lux Cafe, Venetian. RSVP here.
Come for the conversation on the future of embedded finance and small business lending. Stay for the one-on-one conversations (over drinks and appetizers, of course!)
Join Salman Syed (CEO of Astrada) and yours truly for a lively AM conversation on data, AI and open banking. Who will win as the battle lines are redrawn? Bring your hunger and curiosity to Bouchon at The Venetian. RSVP here.
Chris Guild (Director of Lending Solutions, TruStage) and Taylor Nelms (VP of Research and Insights, Financial Health Network) will unpack the state of consumer financial health, how lenders are bracing for a turn in the credit cycle, and why payment protection insurance is becoming a critical tool for both portfolio risk and customer reassurance.
National Trust Bank charters are all the rage right now, but as Kiah points out, it's all just a little bit of history repeating. We can’t understand what’s happening now without first understanding what happened last time (circa 2020) and doing a little research into Anchorage Digital Bank.
Lots in this week’s Fintech Business Weekly, including more on MoneyLion and Baltimore, a Lineage Bank scoop, a new stablecoin, and more national trust bank charter applications.
There are a TON of interesting questions being asked in the Fintech Takes Network. I’ll share one question, sourced from the Network, each week. However, if you’d like to join the conversation, please apply to join the Fintech Takes Network.
The discussion over the weekend on USDe seemed to get mired in arguments about the word “depeg” and its relevance in this specific context.
The more important question, to me, is how do we make it clear to consumers/unaccredited investors how fundamentally unsafe non-GENIUS stablecoins are?
This isn’t going to be the last time something that calls itself “stable” breaks. That’s fine, as long as everyone who holds it (or has exposure to it) understands the risks they are taking. How do we ensure that?
If you have any thoughts on this question, reply to this email or DM me in the Fintech Takes Network!
FINTECH TAKES: BUILDERS SUMMIT
As you may know, Fintech Takes is hosting our first-ever in-person event on November 12th and 13th in the mountains outside Bozeman, Montana.
The Fintech Takes: Builders Summit is the industry event that I’ve always wanted, but have never quite been able to find. We are bringing together experienced founders and operators from banking and fintech — the folks who are actually building products in our industry — and giving them the content and networking opportunities they need to find (and understand) the next big problem they are going to tackle.
If that sounds like something you’d be interested in participating in, apply to attend or hit reply to this email to get more information on sponsorship opportunities. We still have room, but it is going fast!
Thanks for the read! Let me know what you thought by replying back to this email.
— Alex
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