Letter from the Editor: Why every fintech firm is starting to look like an infrastructure provider

Introducing our new ‘Letter from the Editor’ series featuring exclusive insight and opinion-driven analysis from Tearsheet editor Sara Khairi. The focus is to link ideas, question assumptions, and track shifts across both mature and emerging trends in financial services.

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Issue # 5

Fintech is moving beyond the interface wars.

Competition has been traditionally defined by visibility; building the app consumers opened more often, the experience that felt smoother, the financial product that looked less like a bank and more like software.

That model created some of the most important companies of the last generation. But it also trained the industry to think the interface was the business.

That is becoming less true by the day.

Value is shifting underneath the surface, into infrastructure: APIs, orchestration systems, settlement layers, compliance engines, treasury coordination, embedded banking capabilities. Increasingly, the most powerful companies are the ones other systems rely on.

Stripe’s relevance comes from how deeply it’s embedded inside the operating systems of digital businesses. Plaid matters less as a consumer connectivity tool and more as a financial data layer sitting underneath thousands of workflows. Circle’s significance is not really about crypto branding anymore; it’s about whether stablecoin settlement becomes infrastructure for internet-native money movement. Modern Treasury is solving a problem most consumers never see at all, which is the fragmentation between banking systems that still do not move coherently in real time.

Even Banking-as-a-Service has moved beyond its original form. At its most mature, BaaS has become more about making regulated financial capabilities available as infrastructure that software companies can build directly into their operations.

Increasingly, these companies are competing for the same place in the stack: the infrastructure layer beneath financial services. The first era of fintech was about access. The second was about user experience. This next phase is about system dependency.

Financial products are merging into processes. Payments now happen inside software workflows. Lending decisions originate within accounting platforms. Compliance increasingly operates as code. Treasury is becoming orchestration, and banking is evolving from a standalone relationship into an embedded capability.

The interface does not disappear entirely, but it stops being where the real strategic value sits.

We still talk about embedded finance, stablecoins, APIs, and AI automation as if they are separate developments. In reality, they are all part of the same shift. Finance is moving out of standalone products and becoming embedded within the software systems where people already work and transact.

That shifts the balance of power. Fintech assumed owning the customer experience was the ultimate advantage. But infrastructure plays by different rules, accumulating leverage in ways interfaces rarely can.

Interfaces compete for attention, while infrastructure competes for dependency.

Once financial infrastructure becomes woven into everyday workflows, replacing it becomes operationally painful, even if end users barely notice it exists. That is what makes infrastructure businesses so durable. Their value grows through dependence instead of visibility. The better they work, the more invisible they become, and the harder they are to replace.

That is why many fintech companies that once sold disruption are now building operational layers. Underneath that evolution is a deeper shift in how financial decisions get made. What was once a visible user action is increasingly becoming a system-driven outcome shaped by APIs, risk models, permissions, and embedded logic operating behind the scenes.

The key question is no longer who owns the customer relationship. Increasingly, the more important questions are:

• Who defines the conditions under which financial activity happens in the first place?
• Who controls identity verification inside workflows?
• Who controls settlement?
• Who controls compliance logic?
• Who controls how money moves between platforms?
• Who becomes the orchestration layer everything else plugs into?

This also explains why fintech firms are starting to look more like infrastructure providers than consumer brands, prioritizing integration over interfaces and system positioning over product differentiation.

This transition also carries a trade-off that deserves more scrutiny than it currently gets.

Infrastructure centralizes power. The more finance disappears into systems, the harder it becomes to see where decisions are being made, who is making them, and how much autonomy users are actually giving up in exchange for efficiency.

That does not necessarily make the shift or automation wrong. It is, in many ways, inevitable. Financial systems were going to become more programmable, more embedded, and more automated with emerging tech. But it does allude to the fact that innovation won’t be the sole focus of fintech’s next phase; governance will be just as defining.

Financial evolution has always involved the same trade-offs: efficiency versus clarity, automation versus control, abstraction versus understanding. What has changed now is how deep we are into that trajectory. This is why the key question in fintech today is who is capturing the rails, because everything else builds on that foundation.

– Sara

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