Hello, Fintech Friends!

Every year in fintech has its narrative. In 2025, it was stablecoins. Just look at how stocks of remittance businesses performed last year. Strong growth in the business did not translate into stock performance. Stablecoin payments are still early, but they've found an undeniable product-market fit in cross-border payments. That's a strong narrative to fight against.

In 2026, the narrative is clearly AI. Something changed at the end of last year. AI got good at writing quality code and even building Excel tables. I'm sure you've heard of Claude Code and Claude Cowork. So who in fintech might get hurt or benefit from this narrative?

The first thought is software vendors that serve banks. FIS, Fiserv, Jack Henry. Last year, Fiserv announced plans to consolidate its legacy core platforms, a multi-year migration effort to modernize decades of accumulated tech debt. AI could accelerate that consolidation. But here's the uncomfortable question: what if banks decide they can just build their own software instead?

Payments is a software business now. Adyen employs more people in tech than in any other function. I'm not saying someone can vibe code Adyen or Stripe. You cannot vibe code licenses, connectivity to payment rails, fraud models, and five-nines uptime. But there may be less room for businesses that simply wrap a legacy processor in some piece of software and sell it to SMEs.

Then there is lending. There were some pockets of fintech innovation (lending to the underbanked, SMEs, and corporate credit cards), but banks managed to hold their ground in the segments they care about. Could disruption in lending finally come from agentic commerce? Credit card issuers built defensible moats through decades of investment in brand loyalty. An AI agent has no loyalty.

Last year, people mocked Klarna for going all-in on AI. I don't think they would be mocking them this year. AI is real. Let's see who's a better steward of it: banks or fintechs.

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

Top Performers

This month's list has an international flavor: the UK's Funding Circle and Wise, plus every single Brazilian fintech listed in the US. A weaker dollar typically helps international companies, but let's see if they can hold gains after reporting their results.

Sector Snapshot

Most sectors are down year-to-date, but financial software and integrated payments are taking the hardest hit. The market seems to be pricing in AI disruption. That's exactly the narrative we discussed in the opening.

Worth Watching

Capital One to Acquire Brex

Capital One announced it will acquire Brex for $5.15 billion, paying 50% in cash and 50% in stock. The deal is expected to close in mid-2026. Capital One shares fell about 3% on the news. This is Capital One's second major deal in a year, following its $35 billion acquisition of Discover.

But where Discover was about scale in consumer cards and building a network, Brex is about software. Corporate cards were never just about credit. They were about automating expense management, approvals, and reimbursements. Brex and Ramp built the software that did that.

So who should be worried? The obvious answer is Ramp. Brex and Ramp have been locked in a fierce battle for the same customers. Now Brex gets Capital One's balance sheet, underwriting capabilities, and distribution. Can Ramp keep up? I wouldn't bet against them.

However, the more interesting threat might be to JPMorgan. JPMorgan has been building expense management the old-fashioned way. Capital One took a shortcut and now has both scale and a fintech tech stack. Suddenly, Capital One looks like the more dangerous competitor.

Nubank Moves Closer to U.S. Banking License

Nubank received conditional approval from the OCC to establish a US national bank. The company applied on September 30, 2025, and got approved on January 29, 2026. Four months from application to conditional approval. That's fast for a de novo national bank charter.

The approval is conditional. Nubank still needs sign-off from the FDIC and Federal Reserve. They have 12 months to capitalize the bank and 18 months to open it. Co-founder Cristina Junqueira has relocated to the US to lead the operation. Roberto Campos Neto, former President of Brazil's Central Bank, will serve as Chairman.

But here's what caught my attention. Before the OCC decision, Nubank launched a landing page with a tagline "Coming soon to the United States and many other countries." The country dropdown includes over 150 countries. Argentina, Canada, UK, Germany, France, India, Japan, Nigeria, South Africa. Basically everywhere.

Is Nubank seriously planning global expansion? They already have 127 million customers across Brazil, Mexico, and Colombia. The question is whether the playbook translates. Latin America had underbanked populations and incumbent banks that were easy to hate. The US and Europe are different. But Nubank has something most neobanks don't: scale, profitability, and patience.

Fiserv and Affirm Partner on Debit BNPL

Fiserv and Affirm announced an exclusive partnership to bring BNPL capabilities to debit card programs. Fiserv's bank and credit union clients will be able to offer their debit cardholders the option to split eligible purchases into fixed payments directly from their mobile app.

This became possible thanks to Visa Flexible Credential, which Visa launched in 2024. The technology allows a single card to toggle between debit, credit, and BNPL at the point of sale. Max Levchin floated the idea on X last year, telling debit card issuers that Affirm could help them add BNPL: "Your cardholders will thank you because debit+BNPL is the way."

For Affirm, this is distribution at scale. Fiserv serves thousands of US banks and credit unions. For those issuers, it's a turnkey way to offer flexible payments without building lending products themselves. Affirm handles underwriting, origination, and funding. The bank keeps the customer relationship.

But why give Fiserv an exclusive? Affirm could work directly with issuers. The answer is probably reach. Community banks and credit unions don't have the resources to integrate BNPL on their own. Fiserv is the middleware that makes it happen. And for Fiserv, this is a way to stay relevant as payments become more software-driven.

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