3 Fintech News Stories
#1: Stripe Takes a Tiny Step Towards Banking
What happened?
Stripe applied for a Merchant Acquirer Limited Purpose Bank (MALPB) charter from the state of Georgia, and its application was accepted:
Stripe detailed that the MALPB charter will allow the firm to broaden its payment processing offerings — in this case, to obtain direct membership in the U.S. with Visa and Mastercard and to process payments without a sponsoring bank (known as a BIN sponsor).
The scope of the charter is limited to merchant acquiring and does not include deposit taking or similar banking activities; the charter/application itself … mandates payment volume capital and various capital requirements that are based in part on traditional banking standards.
So what?
This news generated a lot of excitement when it first broke, which is understandable given that it contains the words “Stripe” and “bank charter”. However, the reality is more nuanced and less exciting than those initial reactions might have suggested. So, let’s break this news down in a quick Q&A.
Q: What is a MALPB charter?
A: It’s a specialized state banking charter narrowly focused on merchant acquiring activities like authorizing, settling, and clearing payment transactions. Unlike a full-service bank charter, it doesn’t allow activities like taking public deposits or offering consumer loans. Georgia introduced it in 2012, and in the intervening 13 years, it has only been approved for two other companies: Finaro (which never used it and was acquired by Shift4 in 2023) and Fiserv (which received conditional approval in September of last year).
Q: How might a MALPB charter benefit Stripe?
A: It’s difficult to say. Stripe doesn’t have it in the bag yet. Its application has been accepted by Georgia, but the process for it to be reviewed in depth and approved (conditionally) will likely take 6-12 months, minimum. Then, if it gets conditional approval, it will still need final approval before it can be operationalized, and that final approval doesn’t just need to come from Georgia’s Department of Banking and Finance. It also needs to come from Visa and Mastercard, which (reluctantly) play a similar gatekeeping role that the Federal Reserve plays when it comes to accessing its payment rails. Historically, Visa and Mastercard have been a bit nervous about accepting non-banks as direct network participants on the merchant acquiring side, although that may be changing. Finally, even if Stripe is approved for and able to operationalize this charter, it’s unlikely to have a massive impact on the company’s bottom line. Stripe already processes enough transaction volume to get incredible pricing from its BIN sponsors. Holding the merchant acquiring account directly will create some small incremental revenue streams, but nothing spectacular. Overall, the most significant benefit to Stripe would (IMHO) be increased optionality for its U.S. operations.
Q: Will Stripe try to become more of a full-service bank?
A: I don’t know. Maybe? Eventually? Assuming that it can successfully follow in Fiserv’s footsteps and get conditional approval from Georgia’s Department of Banking and Finance, having this charter will make Stripe a bit more bank-like, and I could see that making it easier for the company to take additional, incremental steps towards becoming a full-service bank, such as applying for a Fed Master Acount. But I don’t expect anything on this front anytime soon, and what we see in the future will (again) likely be less exciting than we think.
#2: I’m Having a Hard Time Squaring This Circle
What happened?
Circle, the stablecoin issuer, filed to go public:
Circle plans to list its stock on the New York Stock Exchange pending SEC approval, a Tuesday filing shows. It would trade under the ticker CRCL.
“We think that we can create a new defining internet platform company that is built on the internet financial system,” Circle wrote in its S-1 — a form used to register securities offerings with the SEC. “And we believe that we are still in the very early stages in the development of this new financial system.”
So what?
And now they are considering putting their IPO plans on hold, just like Klarna did last week, in response to the Trump Administration’s tariffs.
For a company that has already tried to go public in 2022 via a SPAC (Remember those? Fun times!), this has got to be a bit frustrating. Especially since 2025 had been looking, in the first couple of months, like it would be the year of stablecoins.
But perhaps it’s a blessing in disguise.
I haven’t read through the S-1 in detail yet, but my preliminary scans leave me with some concerns. Here are a couple of observations:
- USDC hasn’t been growing. Its market share shrank from 34% to 20% between 2022 and 2023 (SVB’s collapse, which caused USDC to briefly break its peg, scared a lot of folks). It rebounded to 24% in 2024, but still. It hasn’t captured the recent stablecoin growth wave the way that USDT has. An increase in competition (which seems guaranteed given the support stablecoins have in Congress and with regulators) will not help this problem.
- Circle needs interest rates to stay high. This is how they make money. By holding treasury bills and other super-safe assets. However, if rates go down, their revenue goes down too. Indeed, Circle estimates that a 1% decrease in interest rates could result in a $441 million decrease in its stablecoin reserve income (its main source of income).
- Coinbase is sucking out a majority of the revenue. Coinbase owns an equity stake in Circle and has an insanely lucrative revenue share agreement with it. As a result of that revenue share, Circle paid Coinbase $908 million in 2024, out of $1.67 billion in revenue. For those who don’t want to do the math, yes, that’s more than half of Circle’s total revenue. That’s just plain crazy.
#3: The Future Of The Housing Market?
What happened?
Roam, a fintech startup focused on housing affordability, raised an $11.5M Series A:
What if there was a way to still get the interest rates of years past? With assumable mortgages, there might be. An assumable mortgage is one where an outstanding loan is transferable to the buyer.
Enter Roam, a New York-based startup with the mission of providing access to “thousands” of homes with assumable mortgages across the country.
CEO Raunaq Singh — who worked in product for three years at Opendoor — founded Roam in September 2023. Roam helped facilitate $200 million worth of home sales for “several hundred” buyers in 2024. And more than 200,000 buyers have registered on its platform in the last 12 months.
So what?
The round was led by Khosla Ventures’ Keith Rabois, who also led Roam’s pre-seed and seed rounds.
I’ll say this off the top — I’m not a huge Rabois fan, but I do respect the level of conviction he has in his portfolio companies. It’s unusual in venture capital these days.
However, the real question is this — Is Roam the “future of the housing market,” as Rabois claims it is?
Probably not.
There are roughly 12 million active mortgage loans in the U.S. that are assumable (conventional mortgages sold to Fannie and Freddie aren’t assumable … only loans backed by the FHA, VA, and USDA are). Given the recent and rapid rise in interest rates, let’s assume that most of those loans are at interest rates lower than the 6-7% rate that mortgages are going for currently.
Roam scours mortgage and real estate data to identify these mortgages and then works to connect the holders of those mortgages (if they are looking to sell) with buyers (Roam claims to have 200,000 registered buyers on its platform). Once those buyers find a house they want, Roam simplifies the assumption process (which is notoriously clunky and burdened by paper forms and fax machines), guaranteeing a close within 45 days (if it goes longer, Roam covers the seller’s mortgage payments until the transaction closes).
Roam also helps facilitate financing for the buyer. One of the challenges with assumable mortgages, in an environment where home prices are going up, is that the sellers will usually have built up some equity in the home, which means that the buyer needs to both assume the existing loan and cash out the seller’s equity. Instead of requiring the buyer to cover the equity entirely in cash (in the form of a down payment), Roam will accept a smaller down payment and then arrange a second-lien loan for the borrower to cover the remainder. The blended interest rate, between the original mortgage loan and the new loan, will still (potentially) be below the 6-7% that a buyer would otherwise need to pay.
Look, overall, I like this. Affordability is a huge problem in the market, and assumable mortgages can be an attractive option, for both buyers (obviously) and sellers (offering a lower rate makes your house much more attractive). I am also always a fan of fintech solutions that provide value by removing unnecessary administrative work, which the mortgage assumption process is rife with.
That said, I’ve learned to be cautious about niche solutions in the mortgage market, no matter how clever they are.
The mortgage market is insanely cyclical. Ideas that work in a low-interest-rate environment die swift deaths when rates go up. And the opposite is also true. When interest rates drop, Roam’s value proposition will stop making sense.
Maybe the bet here is that rates will stay high for a long time, and when they eventually come down, Roam will have broadened its product offerings into a portfolio that works across all rate environments (the same way that Rocket has over the last 15 years). I just don’t see a big enough opportunity in the short term (only 20-30% of mortgages are assumable, and a lot of those mortgage customers don’t want to give them up) to justify that level of optimism for the long term. But I hope I’m wrong!
Fintech Content Recommendations
#1: Vertical AI: beware what you wrap (by Matt Brown) 📚
There’s no one sharper on trends in vertical SaaS than Matt. His take on how AI will (and won’t) disrupt the vertical SaaS space is excellent.
#2: Homeowners Insurance Market Disruption: Challenges, Effects, and Solutions (by Peter Carroll, OpenBanker) 📚
I love fintech content that gets into the weeds on a niche topic. This one from Pete has a TON of great data on the homeowners insurance market, which (as you might guess) is experiencing unprecedented levels of disruption right now.
1 Question to Ponder
What are the most important considerations when deciding whether to build infrastructure in-house or buy it from a third-party vendor?
If you have any thoughts on this question, hit me up on Twitter or LinkedIn.
