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 Happy Friday, Fintech Takers! Whoo! For being a short week, that was a long week. Fintech Takes published a rather absurd amount of content:
Goodness! It took a long time just to type out that list! My thanks to all the folks who helped create all of this wonderful content, which, as a reminder, is free for y’all to enjoy. I hope you take advantage and dig into all of it. Today’s newsletter is silly; an opportunity for me to blow off a little steam after a long week. It was fun to create. I hope it’s fun to read! - Alex P.S. — There’s even more good content coming your way! Register for this upcoming virtual event with Rain and Western Union on stablecoin cards. I promise you’ll learn something! Was this email forwarded to you? Sponsored by Nova Credit Origination was where cash flow intelligence got its first real adoption. Then lenders who moved early discovered that the same signals (income volatility, spending patterns, account behavior) are just as useful 18 months in as they are at application. Nova Credit's 2026 Cash Flow Intelligence Summit (September 10th, NYC) is where 200+ credit risk, consumer lending, and data executives from the country's largest institutions are comparing notes on deployment, portfolio strategy, and where the field's headed next. Fintech Trade MachineI think I’m out on the 2025-2026 NBA season. I’m happy for Knicks fans (they’ve been trapped in sports hell for decades), but as a Celtics fan, I’m physically unable to enjoy or even be neutrally interested in watching the Knicks play basketball. I’m happy that we have a Game 7 in the West, but if the Thunder win, the Finals will be unwatchable (the flopping between Brunson and SGA … arrggghh, my eyes!!!) Given the options available to me, the Spurs winning the whole thing is my preferred outcome. Wemby is compelling to watch. I like how competitive he appears to be, despite his absurd physical gifts. But even a Spurs win will annoy me because I’ll have to endure endless conversations among pundits about a new Spurs dynasty and how the rest of the NBA is screwed. I think I’m just going to opt out on the remainder of the playoffs and focus instead on the upcoming offseason. One of the great accomplishments of the NBA in recent decades has been turning the off-the-court side of the business into a legit product for fans. We spend nearly as much time (or sometimes more) scrutinizing our teams’ roster moves, drafting strategies, and salary cap maneuvers as we do watching the actual games. For example, one of my favorite pastimes is reading columns and listening to podcasts that propose trades. Mostly I find myself screaming “Why would they do that?!?” at the top of my lungs while reading/listening to them, but still! It’s fun! It makes me think. It provokes arguments. It increases my enjoyment of the NBA. So, in that spirit, I am happy to share with you the first edition of Fake Fintech Trades! I have constructed seven fake fintech trades involving various financial services (and financial services-adjacent) companies, business divisions, products, and executives. A couple of notes before we get started:
Ready? Here we go … Experian Doubles Down on Cash Flow UnderwritingExperian receives: Finicity Mastercard receives: Experian's UK open banking business + 50B Claude Opus 4.7 input tokens and 5B output tokens What Experian is thinking: Shit, this cash flow underwriting thing is real. It’s not a fad. We were in the lead when we launched UltraFICO with FICO and Finicity back in 2018, but we let that quietly die and now it’s THE THING in lending and we’re behind. FICO has relaunched UltraFICO with Plaid and they cut us out of it. We have our Cashflow Score. We have Experian Boost, which is helping us bring in non-traditional, consumer-contributed data. We have a robust marketplace business and integrating cash flow data into it would lead to better pricing for our consumer users and lower risk for our lender partners. We just need the data! Our UK open banking business capabilities are nice to have, but the U.S. is our priority and cash flow underwriting is where the money is. What Mastercard is thinking: Finicity was a panic buy because we thought Visa was buying Plaid. Turns out the DOJ saved Visa from themselves and screwed us. Pay by bank hasn’t become a thing in the U.S., and now, thanks to JPMC, it never will. Finicity had a huge lead in cash flow underwriting before we bought them, but that lead has evaporated because we never cared about that use case. We’re lucky Experian still wants Finicity! Experian’s UK open banking capabilities gives us an asset in a market where pay by bank is still viable. Plus, the tokens get us through 2026's AI capex cycle without us having to go back to the board and ask for more. Who says no? Experian, probably. I think Mastercard would be willing to do it, even if it’s a loss on paper. It just bought BVNK for $1.8 billion. It doesn’t care about pay by bank and it can’t capitalize on cash flow underwriting. As I’ve written previously, Experian appears to want to be the FICO of cash flow underwriting. It doesn’t want to be the Experian of cash flow underwriting. It perceives, not inaccurately, that the value in the open banking stack will accrue at the analytics and consumer product layers, not the data access layer. Block & PayPal Make a Challenge TradeBlock receives: Venmo PayPal receives: Afterpay + Tidal What Block is thinking: We’ve reached the limits of organic growth in P2P payments (that’s why we’ve opened up our network). If we want to keep growing the reach of our consumer payments business (and we do), we need to do it through an acquisition. With Venmo, we can dominate Zelle and position Cash App as the natural choice for consumers’ primary banking relationship. Afterpay was an overpay. The strategy — Afterpay will be the bridge that connects our Square ecosystem and our Cash App ecosystem — hasn’t worked. Afterpay, as a brand, is an afterthought for consumers and merchants, compared to Affirm and Klarna. And you know what? If we want to, we can just build our own BNPL solution from scratch. We have the necessary pieces and now we have the know-how. And in getting rid of Tidal, we dump both of our worst acquisitions in one move! What PayPal is thinking: Venmo is cursed. We’ve never been able to figure it out and we never will, even after reorganizing our company yet again and making Venmo its own division. This is dumb. What are we doing? Let’s just dump it. We’ll still have PayPal as a consumer-facing brand. We were into BNPL before it was cool and it’s quietly a major driver for us, especially as we’ve leaned more into the merchant side of our business. We can use Afterpay to further bolster our ambitions around e-commerce and agentic commerce. Plus, Enrique Lores is excited to be best friends with Jay-Z! Who says no? Block. It’s not ready to give up on the strategy of using Afterpay to bridge Square and Cash App, especially as consumer lending becomes an increasingly prominent part of the business. Plus, Nick Molnar keeps getting promoted at Block. He’d likely throw his body in front of this trade. Plaid Concedes Payments to StripeStripe receives: Plaid's pay-by-bank infrastructure and merchant relationships. Plaid receives: Stripe shuts down Financial Connections + a minority equity stake in Stripe + 75B Claude Opus 4.7 input tokens + 15B output tokens What Plaid is thinking: We’re not going to beat Stripe in payments. Our street cred with developers doesn’t extend that far and we can’t keep up with their product velocity in this area given our other product priorities. Plus, JPMC has screwed up the unit economics in pay by bank and we don’t think the CFPB will fix it. Let’s take the equity stake and the tokens, get Stripe to shut down Financial Connections and route everything through us. We’ll focus on winning in fraud/identity and lending. What Stripe is thinking: We don’t care that much about pay by bank, given everything happening in stablecoins and AI right now, but it’s better to own the payment part of it than the data aggregation part of it. Honestly, we can’t even really remember why we built Financial Connections originally, but it’s not strategically important to us and it’s annoying to maintain and to worry about from a regulatory compliance perspective. Let’s just focus on payments. Who says no? Plaid. The IPO narrative requires growth and payments is a big part of the growth story. Walking it back means telling public market investors that the TAM slide they've been looking at for three years has a 30% chunk crossed out. Even if the trade is the right strategic call — and it is — IPOs don't reward focus. They reward the appearance of unlimited growth potential. AWS Becomes the AWS of FintechAmazon receives: Galileo + Technisys SoFi receives: The exclusive right to issue all Amazon credit cards (consumer and business) for the next five years + a multi-year AWS compute commitment at preferred rates + 200B AWS mixed input/output tokens What SoFi is thinking: The ‘AWS of fintech’ strategy hasn’t worked. Galileo's revenue growth has decelerated, its CEO has left, the BaaS market got napalmed by the Synapse/Evolve fallout, and our actual growth story now is the bank charter, the lending stack, and the financial services productivity ratio. Not disappointing the SoFi bros is not a good enough reason to keep Galileo and Technisys. Let’s trade them to AWS. Use the compute commitment and tokens to bankroll our agentic AI roadmap (better underwriting models, the SoFi Plus assistant, cross-product personalization, etc.). We get the infrastructure we need to actually win on AI while offloading the infrastructure we never figured out how to monetize. Plus, we nab some credit card issuing business to soften the blow. What Amazon is thinking: If anybody is going to be the ‘AWS of fintech’ it’s going to be us. Banks and fintech companies already run their workloads in our environment. Why not move up the stack, into ledgering, card processing, and ancillary services? When the banking industry in the U.S. finally bites the bullet and embraces core modernization en masse, we’ll be well-positioned to scoop up a large portion of that business. We’re not giving up anything meaningful in this trade. Why wouldn’t we do it? Who says no? Amazon. JPMC, Capital One, Goldman, Wells Fargo, Truist — they're all enormous AWS shops, and they will not tolerate their cloud provider also being the core processor and card issuer that their competitors might be relying on. Amazon saw a version of this play out already with Whole Foods and it won’t be eager to replicate the experience. OpenAI Buys MonetizationOpenAI receives: Credit Karma Intuit receives: A 10-year preferred inference agreement (1 trillion mixed GPT-5+ tier tokens, weighted toward output) + a minority equity stake in OpenAI's consumer finance vertical What OpenAI is thinking: We have to find ways to monetize our 900M+ weekly active users and lead generation for consumer lenders is one of the best and most enduring free user monetization businesses in existence. We could build our own version of Credit Karma, but it would take time that we don’t have. Getting a sufficient number of lenders signed up and integrating their underwriting models would take years. We just rolled out V1 of our personal financial management capabilities. Instead of partnering with Intuit on V2, let’s just trade for Credit Karma and accelerate our agentic consumer finance roadmap by five years. We can afford it. What Intuit is thinking: Credit Karma has been a great business for us, but we’ve never gotten the “1 + 1 = 3” synergies out of it that we expected. The integration story with TurboTax has been incremental. The integration story with QuickBooks has been essentially nonexistent. Our new growth thesis is the SMB platform — QuickBooks, Mailchimp, the Intuit Assist agentic stack — and Credit Karma is a consumer asset that doesn't really fit. The trillion-token inference agreement is the actual prize. Locking in OpenAI capacity at preferred pricing for a decade is worth more in actual dollars than Credit Karma has earned us cumulatively. Plus we get equity in OpenAI's consumer finance vertical, which is the only consumer business we'd want to be in anyway. Who says no? Intuit and OpenAI. The strategic synergy between Credit Karma and Intuit’s small business offerings hasn’t panned out, but Credit Karma is still a very strong standalone division, and companies like Intuit aren’t in the business of selling off profitable divisions for no reason, especially if doing so will turn your $7.1B acquisition into a future business school case study. By virtue of its massive and highly engaged consumer user base, OpenAI likely feels that it doesn’t need to buy assets like Credit Karma. It can just bully Intuit into a “partnership” that gets OpenAI exactly what it wants without having to fork over any tokens. Circle Consolidates the Stablecoin MarketCircle receives: PYUSD (the brand, the supply, the PayPal distribution rights) PayPal receives: Equity in Circle's Arc L1 + founding validator status + 10B Claude Opus 4.7 output tokens What Circle is thinking: Tether is widening the gap. We need to close it. There are tons of new stablecoins being launched right now, but that won’t sustain. This is a winner-take-most market that will see a lot of consolidation over the next few years and we need to be a net-winner from that consolidation. Of all the top stablecoins by market cap, PYUSD is the one that is gettable and its compliance-forward posture matches our own. What PayPal is thinking: This was a priority two CEOs ago. The vision — a mechanism to create a global closed-loop network — hasn’t gotten any closer to becoming a reality, despite the head start that we had. The stablecoin space is now much more competitive and we don’t have a clear right to win here, compared to Stripe, Visa, Mastercard, and Circle. If Circle is offering us "equity in their L1" and "founding validator status on Arc," we get to issue a press release about a strategic partnership rather than a write down. The audit committee will not ask hard questions about what L1 equity means in GAAP terms, because the audit committee does not know what an L1 is. Who says no? PayPal should, but it probably wouldn’t. Trading with PayPal these days is like trading with the Chicago Bulls. Just ask for what you want and you’ll be surprised by the number of times they say, “Sure! Take what you want!” I don’t think PYUSD is going to work out well for PayPal, but it also shouldn’t dump it for nothing. The PayPal Mafia Reunion TourElon Musk receives: Max Levchin (released from his contract with Affirm) Affirm receives: Equity in SpaceX at IPO valuation + dedicated Colossus compute capacity through 2028 + first-allocation rights on the planned orbital data center footprint + 25B Grok 4 output tokens What Elon Musk is thinking: We were *this close* to building the perfect financial super app 25 years ago, but we screwed it up. PayPal can’t get out of its own way and none of the big banks have made significant progress towards this vision either. In 2026, money follows attention and I have captured consumers’ attention with X. The next step is turning X into the financial super app I’ve always wanted to build and I need someone I can trust to drive that forward while I concentrate on making humanity a multi-planet species. Max is that guy. I bet he’s tired of all the nonsense that comes from running a public company and would jump at the chance to get back to building. What Affirm’s Board is thinking: We love Max, but he has imprinted his philosophy for how Affirm should operate so deeply onto the rest of the executive team, that we don’t need him to carry it forward. What we do need is compute. Inference capacity will be the most important competitive moat in financial services for the next decade and this deal gives us that (assuming that you believe that Elon can build what he says he can … which has usually been a good bet to make). Plus, the option value of SpaceX equity priced at $1.75-2 trillion is enormous. If the IPO holds and the orbital data center thesis even half-works, that part of the trade alone is worth significantly more than our current market cap. Let’s just check with Max and see if he’d be interested in a reunion with Elon. Who says no? Affirm, immediately. The board loves Max. There’s no way they even consider this unless he told them he wants to leave (which it doesn’t seem like he wants to do). Plus, the SpaceX IPO is absurd. A $2 trillion valuation for a company that posted a $4.28 billion net loss in a single quarter and would trade at 104x revenue multiple? I respect Elon’s ability to bend reality to his will and manifest absurd-sounding outcomes, but this one is just too much. Sponsored by Oscilar Financial crime moves at warp speed now. Most AML programs don't. MORE QUESTIONS TO PONDER TOGETHER Big news for the endlessly curious (yes, you): I’m collecting your fintech questions on a rolling basis. What’s keeping you up at night? What great mysteries in financial services beg to be unraveled? Think of it this way, if a stranger is a friend you just haven't met yet, your question is a Fintech Takes conversation waiting to happen. One that could headline a Friday newsletter or be answered in an upcoming Fintech Office Hours event. Drop your question here, whenever inspiration strikes! Thanks for the read! Let me know what you thought by replying back to this email. — Alex | |||||||||||
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