TLDR Fintech 2025-05-01

Our friends at Modern Treasury just released Modern Treasury AI, becoming the first AI platform purpose-built for payments.

Here's what caught our attention:

1️⃣ It's built specifically for payments. Designed by payments experts, it understands enterprise payment systems and workflows.

2️⃣ The AI works WITH your team. It understands payment context, follows security rules, and executes faster.

3️⃣ Everything's in one place. The Workspace brings together tools, teams, and the Agent so teams can work faster and smarter.See it live at Transfer on May 15 in San Francisco (or via livestream). ↗️

SoFi CEO Anthony Noto announced the company's plans to reintroduce cryptocurrency investing, following a regulatory shift under the Trump administration. After halting crypto services in 2023 due to regulatory pressures, SoFi aims to integrate crypto and blockchain capabilities across its product offerings. This move aligns with the Federal Reserve's recent withdrawal of prior guidance on crypto-asset activities, signaling a more supportive environment for innovation in the banking system.

Mastercard has launched Agent Pay, an agentic artificial intelligence (AI)-driven payments program. The new offering introduces Mastercard's Agentic Tokens, which builds upon tokenization capabilities that power global commerce solutions like mobile contactless payments, along with programmable payments such as recurring expenses and subscriptions. Mastercard plans to collaborate with a number of tech companies on the program: Microsoft on new use cases to scale agentic commerce, IBM to accelerate B2B use cases, and companies like Braintree and Checkout.com to enhance tokenization capabilities already in use.

PayPal used its agentic commerce announcement to lead off both its Q1 quarterly earnings call and its Developer Days event at its headquarters in Silicon Valley. Its payment service provider (PSP) business and suite of value-added services is critical to its growth strategy.

Many speculate that digital payments will inevitably replace physical cards because they offer such powerful use cases. However, this perspective overlooks several key factors—not only are physical cards highly reliable at the point of sale, but they also offer personalization options that create a tangible connection between consumers and their payment method, something digital payments can't replicate. This podcast discusses the continued prevalence of physical cards, how customized card offerings with advanced card designs, features, and metal cards can help brands drive loyalty, and the future of premium card products.

Banks are preparing to launch interoperable tokenized deposits, aiming to replace legacy correspondent banking systems for international payments. The cross-border payments market, valued at over $150 trillion annually, could see major efficiency gains through near-instant settlement, reduced fraud, and cost savings of up to 80% per transaction. If adoption scales, tokenized deposits may fundamentally reshape how value moves globally, challenging SWIFT and traditional interbank networks.

The AI-in-fintech sector is projected to grow from $12.1 billion in 2023 to over $61.6 billion by 2032, driven largely by its effectiveness in identifying fraud and managing risk. Financial institutions are ramping up investment in AI technologies that automate underwriting, personalize financial services, and boost regulatory compliance. North America currently leads the market, but Asia-Pacific is expected to see the fastest growth due to rising digitalization and fintech adoption.

Square is rolling out upgraded banking services—including instant fund access, savings recommendations, and streamlined setup—to give small businesses more control over their finances. Sellers can now open a Square Checking and Payments account in minutes via a single flow, with cash flow–based savings suggestions helping them plan for taxes and business needs. In 2024, Square sellers spent $3.6B on debit cards, up 29% YoY, as Square's integrated dashboard continues to simplify payments, banking, and back-office operations.

Affirm's new AdaptAI promotions platform uses real-time AI underwriting to match each shopper with an optimal incentive—0% APR periods, longer terms, or instant cash discounts—at checkout. It lifted conversion by almost 10% in Affirm's own app and card. The tool is now available to all merchant partners, letting them present personalized pay-over-time offers that boost satisfaction and sales (e.g., financing a $500 cart over 12 months at 0% APR can save a shopper about $120 versus revolving credit costs).

Mastercard is expanding its crypto playbook by enabling merchants to accept stablecoins like USDC on its network via partnerships with blockchain infrastructure providers like Immersve. The initiative lets users spend stablecoins directly from their wallets, with transactions settled on Mastercard's rails and accepted at any location that supports its payments. This move signals a broader industry shift toward integrating blockchain-based money with mainstream payment infrastructure.

Real-time cross-border payments, embedded FX, and tokenized cards are now powering everything from dynamic pricing to in-trip microtransactions. Travel brands are partnering with BaaS and paytech providers to offer flexible financing (like BNPL), loyalty-linked wallets, and multicurrency prepaid solutions—all tightly woven into the booking flow. This embedded approach isn't just about UX—it's a margin play, with fintech driving both ancillary revenue and deeper customer retention.

The second Trump term is prompting a growing alliance between major U.S. banks and crypto firms. Driven by expectations of looser regulations, financial players like Bank of America and Coinbase are now exploring stablecoins and banking charters as the policy landscape shifts in their favor. Institutions once wary of digital assets are moving quickly to adopt them, signaling a broader transformation in how traditional finance engages with crypto.

Fintech startups are transforming emergency credit by leveraging real-time data analytics, alternative credit modeling, and digital disbursement to deliver funds at unprecedented speed. Whether through earned wage access or embedded lending within employer platforms—like offering financing for unexpected car repairs—these tools are designed to meet consumers in moments of financial stress. By incorporating new data signals such as on-time rent payments and recurring gig income, fintechs are expanding access to credit for those often underserved by traditional financial systems.

A former Coatue partner is launching Marathon, a new venture firm focused on early-stage fintech startups, with a $400 million fundraising goal.

Toast and Clover are escalating their rivalry in the U.S. restaurant point-of-sale (POS) sector, challenging established players like Oracle's Micros and NCR Voyix.

Major banks like JPMorgan Chase, Wells Fargo, and Citigroup have increased AI-related hiring by nearly 13% over the past six months.