{ad_logo_primary}

Quick favor: Our records indicate that you aren’t opening this email. But records can be wrong. Please click here if you’d like to remain subscribed to Fintech Takes. 

Happy Wednesday, Fintech Listeners!

I’m writing today’s newsletter on the road, returning from D.C., where I attended and spoke at the FDX Global Summit. It was, as always, a delight to spend time with folks working in the open banking ecosystem. Truly, some of my favorite people in fintech!

Lots of good podcast content to recap and recommend, so let’s get to it!

— Alex 

P.S. — Are you going to be in New York for Fintech Week (the week of April 27th)? Because, if so, you may be interested to know that the Fintech Takes Network will be hosting some 3x3 basketball games on April 30th. I’m insanely excited for this! Request to join here.

Was this email forwarded to you?

3 BIG IDEAS FROM THE PODCAST

This week on the Fintech Takes podcast, Simon Taylor joined me for another round of Not Fintech Investment Advice.

In keeping with the times, we talked a lot about crypto, stablecoins, AI, and agentic commerce. However, as a little treat for me, Simon also showed up with a healthcare-focused fintech startup and delivered a surprisingly credible take as someone who doesn’t have to suffer the absurdities of the U.S. healthcare system. Gold star for him!

As always, talking with Simon was wonderful, and in the process, we uncovered some very interesting ideas about what’s driving founders and what venture capital is rewarding these days.

And read on below for my three big ideas... 

Every stablecoin discussion eventually lands on the same question: Can you show me a use case where stablecoins are materially better than the status quo?

For global and cross-border use cases, it’s easy to find your way to yes. For domestic use cases, it’s much more difficult. 

One possible answer could be branded wallets. A new startup — Rhythmic — is betting on it. The company builds embedded wallets for brands: stored balances, payments through a co-branded card, rewards on top, all powered by stablecoins.

Consumers never experience it as crypto. That's deliberate. The stablecoin part is entirely out of view.

This opportunity isn’t for the Walmarts or Starbucks of the world. Those companies have their own teams and strategies, and enough scale to negotiate favorable economics directly with bank partners and the card networks. The more interesting segment sits one tier below: mid-size brands with meaningful customer bases but not enough scale to build any of this themselves.

Now, you may be thinking — why stablecoins? Couldn’t you build this without stablecoins?

And indeed, you could. In fact, companies like Ansa already have.

So, why stablecoins?

Well, it’s possible that the accounting treatment for stablecoins will make them a more attractive asset for companies to hold customer balances in (James Wester and I talked about this on the podcast a while ago). It’s possible that the implementing regulations for the GENIUS Act will allow stablecoin issuers to share yield with distribution partners, as long as those distribution partners don’t pass the yield along to the end customers (the OCC’s proposed rules appear to allow for this).  

To be honest, we don’t know yet.

What we do know (and what Simon and I talked about on the podcast) is that Rhythmic’s founding team is impressive and somewhat atypical for a stablecoin startup. 

The founders previously spent time at American Express, Circle, Mastercard, and Walmart. That mix of experiences seems, to me, ideal for a company that is trying to solve an old problem with a new tool.

If Stripe was the company that was built for developers, maybe AgentCard is a company that is built for agents. The product itself, a virtual card, is familiar infrastructure. 

But at the top of their website, there’s a button that asks, “Are you an agent?” (click it and see what happens!) Instead of graphics and marketing copy, it gives you a clean markdown-style text file explaining exactly how to use the product if you were a chatbot. That design choice points to a bigger shift we may need to reckon with: agents don’t browse the internet the way humans do; they need structured instructions they can parse. 

Which means the real challenge for financial services may not be inventing new payment rails for AI, but rethinking human-centric websites with embedded images and hover animations (which would be expensive and useless to a system that just needs to know whether the card works and what the constraints are). A text file takes fewer tokens to understand than parsing a webpage and making sense of images. 

AgentCard is framed as virtual cards for AI agents, delivered through a simple API with eight basic commands to create cards, check balances, log in, log out, and manage usage. Again, none of this is especially revelatory at the infrastructure level. Plenty of companies provide similar virtual card capabilities.

But the packaging feels new. Every other virtual card provider is designed for humans first. AgentCard is designed for agents first. Most financial services companies built their documentation for humans, their pricing for human-scale transactions, and their onboarding around the assumption that their counterparty is a human. For agentic commerce, none of those assumptions hold.

🎬 DIRECTOR'S COMMENTARY

Or, maybe the company that builds for agents will be Stripe!

After Simon and I recorded this podcast, Tempo, the payments-focused blockchain backed by Stripe and Paradigm, launched its mainnet, which includes a Machine Payments Protocol that lets software and AI agents pay for services autonomously.

Simon works for Tempo and wrote a whole essay on this topic, which you should read!

The same logic — take what already exists, rebuild the assumptions — is what makes Burst intriguing, even though it has nothing to do with stablecoins or agentic commerce.

Americans leave billions (over $4 billion to be more exact) in unspent FSA and HSA funds every year. 

The gap between entitlement and actual spending isn’t a technical problem; it’s also about friction. And the institutions holding those balances have historically had little incentive to fix it. 

I think of it as a form of breakage, the revenue gained by retailers through unredeemed gift cards or other prepaid services that are never claimed.

FSA and HSA accounts have a similar logic. The custodians holding consumers’ funds make more money when those funds are left unspent than when they are spent. Hence, they don’t bend over backwards to make spending easy.

Lots of companies are trying to tackle this problem, but Burst’s approach is a bit different.

Here’s how it works:

Merchants selling FSA/HSA eligible products integrate Burst via API or a Shopify app. Consumers connect their HSA/FSA providers through a Plaid-style interface, and Burst evaluates consumers’ purchases after they are made (thus avoiding the need to integrate Burst into the checkout process directly), identifies purchases that are FSA/HSA-eligible, and files claims automatically with the third-party administrators that manage the consumers’ HSAs/FSAs. 

The merchant incentive is straightforward. Install this, and your customers receive a discount they’re already entitled to or a reimbursement they otherwise might never bother to claim, which removes friction from purchases they were already considering.

But the more significant effect, IMHO, is on the consumer. When a benefit feels as accessible as a debit card, people stop treating it as a potential reimbursement and start treating it as money they actually have. This behavioral shift, if Burst can catalyze it, will be very significant.

WHAT I'M LISTENING TO

So many smart people with so many wildly diverging opinions about whether or not AI is a bubble. It’s almost as if no one has any fucking clue what’s going on!

(For the record, I found this conversation very interesting and Paul Kedrosky’s argument in favor of AI being a bubble very convincing. But who knows!)

This is only loosely related to fintech and banking, but it was a very fun conversation!

Our new miniseries asks a simple question: how do we make better credit decisions for both consumers and lenders? In Episode 2, Tomás Campos (Co-founder and CEO of Spinwheel) and I chat with Chris Hansen of Nova Credit about today's abundance era for credit data, and what it takes to translate that richness into smarter decisions.

*this rec is brought to you by one of our fantastic brand partners

Thanks for the read! Let me know what you thought by replying back to this email. 

— Alex  

Join 2,444 other finance and fintech leaders in the Fintech Takes Network

The conversation doesn't have to stop here
Keep learning and connecting in the Fintech Takes Network

EVENTS  |  FEED  |  LIBRARY  |  DIRECTORY

Get your brand in front of 63,000+ fintech and banking executives.

Workweek Media Inc. 
1023 Springdale Road, STE 9E
Austin, TX 78721

Want to ruin my day? Unsubscribe.