Forget the earnings. Watch where these fintechs are placing their bets.
- Chime, Block, and Circle each used the quarter to make the case for where fintech’s next moat will be built.
- Chime is finding a lending advantage in the direct-deposit relationship, Block is rebuilding around AI, and Circle is betting that the bigger opportunity lies in owning the infrastructure beneath stablecoins.
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Forget the earnings. Watch where these fintechs are placing their bets.
Chime, Block, and Circle each used the quarter to explain where fintech’s next moat will come from.
This week, Chime, Block, and Circle all delivered solid 2026 second quarters. Each firm used the moment to explain a much bigger strategic shift: Chime is turning direct deposits into a lending advantage, Block is rebuilding its operating model around AI, and Circle is racing to become infrastructure before stablecoins become commoditized.
For Chime, direct deposit becomes a lending moat
Direct deposit has been fintech’s favorite engagement metric. Convince customers to route their paycheck into your account, and they’ll likely stick around longer and use more products.
Chime’s latest quarter suggests the company now sees direct deposit as its underwriting infrastructure.
Instant Loan originations climbed nearly 70% sequentially to $300 million, while MyPay, Chime’s earned wage access product, generated $4.5 billion in originations. Those businesses are expanding because recurring payroll deposits give the company continuous visibility into a member’s income, cash flow, and repayment behavior.
CEO Chris Britt described it as the company’s “success in developing primary account relationships,” adding that “these recurring direct deposits drive more precise underwriting and an advantaged loan repayment position.”
That philosophy runs through Chime Prime, the company’s premium banking tier for members who receive at least $3,000 in monthly direct deposits. Those members unlock higher MyPay limits, automatic Instant Loan qualification, and additional benefits. The objective is to encourage members to consolidate more of their financial lives inside Chime.
The strategy appears to be working. CFO Matt Newcomb said Chime added more members making at least $3,000 in monthly direct deposits than in any previous quarter, while late-stage paycheck conversions reached a record. The company subsequently raised its full-year member growth target.
As AI makes underwriting models increasingly accessible, differentiation is likely to come less from the model itself and more from the quality of the data behind it – something a lot of financial leaders are now emphasizing. Chime’s advantage is that recurring paycheck data gives it a proprietary, real-time view of a member’s financial life that’s harder to replicate.
For Block, AI becomes the company’s operating model
Block announced widespread layoffs earlier this year, and much of the conversation centered on those workforce reductions. Six months later, CEO Jack Dorsey pointed investors somewhere else. “The biggest proof point is our shipping velocity,” he told analysts.
Rather than treating AI primarily as a customer feature, Block is first using AI to rethink how the company builds software.
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