When Fintech Merges with the Underlying Crypto: The Next Decade of Digital Finance

Author: Benji Siem @IOSG

Introduction

Stripe acquires Bridge for $1.1 billion. Mastercard acquires Zerohash for approximately $2 billion. Robinhood launches its own L2. These are not isolated bets but signals of a structural transformation—major fintech giants are directly embedding blockchain infrastructure, stablecoins, and decentralized finance into their core products. Over the past decade, fintech companies have transformed payments, banking, and investing through software-native platforms and large-scale digital distribution. The next phase has begun: crypto is becoming the backend.

This report analyzes the strategies of ten leading fintech companies in the digital finance space, focusing on their business models, revenue drivers, and strategies for integrating crypto payments with DeFi infrastructure. A consistent pattern emerges: the most successful companies do not treat crypto as a speculative asset but as backend infrastructure that can enhance settlement speed, reduce costs, and expand global financial connectivity. Stablecoins, in particular, are becoming the bridge between traditional financial systems and on-chain markets.

Insights into the Fintech Industry

Consensus on Digital Finance: How Different Players View This Opportunity The digital finance foundations of these ten companies can be summarized as: "Financial services should be borderless, real-time, software-defined, and composable—compliance should be invisible to end users." Different types of players understand the opportunity as follows: Infrastructure Players (Visa, Mastercard, Stripe, Adyen)

• Core Viewpoint: Transform the underlying pipes of capital flow without holding customer relationships.

• Opportunity: Each new payment rail (stablecoins, A2A, instant payments) expands the addressable market.

• Crypto Entry Point: Stablecoins reduce settlement friction, enabling 24/7 capital management.

Consumer Platform Players (Nu, Revolut, PayPal, Cash App)

• Core Viewpoint: Occupy the primary financial entry point for users and cross-sell a suite of services.

• Opportunity: Combine banking + payments + investing + crypto into one app to enhance LTV.

• Crypto Entry Point: Treat crypto as a layer to enhance engagement and monetization (transaction fees, interest-bearing products, cross-border).

Hybrid Players (Robinhood, Block, SoFi) Aggregators bid their capacity across various markets:

• Core Viewpoint: Vertically integrate at both the consumer product and infrastructure ends.

• Opportunity: Capture profits across multiple layers (consumer engagement, B2B infrastructure, asset custody).

• Crypto Entry Point: Bilateral crypto strategy (consumer distribution + infrastructure ownership).

Major Trends in the Fintech Space

Based on the analysis of these ten leading companies, several clear patterns emerge. These are the core arguments of this report, with subsequent company cases and integration playbooks serving as validation. Infrastructure First, Not Speculation Almost all companies view crypto as backend infrastructure rather than a frontend speculative asset. Visa, Mastercard, Stripe, and Adyen are upgrading their settlement layers with stablecoins while keeping the consumer experience unchanged. Crypto only succeeds when it is "invisible." This is the most consistent pattern among the ten companies and runs through all subsequent integration strategies. Stablecoins as the "Bridge Asset" Every company touching crypto is betting on stablecoins as the transitional layer between TradFi and crypto:

• Visa: USDC settlement on Solana, 130+ stablecoin card programs.

• Mastercard: Four stablecoins (USDC, PYUSD, USDG, FIUSD) covering multiple chains.

• Robinhood: Collaborating with USDG and sharing revenue.

• PayPal: Spontaneously issuing PYUSD, internalizing the settlement process.

• Stripe: Using USDC for cross-border merchant payouts.

Stablecoins can compress settlement times, reduce FX friction, and enable programmable capital management without exposure to volatility. "Regulated Distribution" as a Competitive Moat Companies with large user bases (PayPal 400 million, Revolut 50 million+, Nu 122 million, Cash App 58 million) position themselves as compliant entry points for deposits and withdrawals rather than protocol builders. Their competitive advantage lies not in technology but in trust, compliance, and scalable distribution. DeFi as Wholesale, Not Retail No company exposes native DeFi protocols directly to end users. Instead, DeFi exists as a wholesale backend: sources of yield (tokenized government bonds, money markets), liquidity optimization (faster settlements, cheaper cross-border), and product packaging (compliant savings accounts supported by DeFi yields). DeFi has become the infrastructure supporting regulated products rather than a user-facing experience. This foundation also determines the subsequent integration opportunities and investment themes of this report. Multi-Rail Strategy Companies are building infrastructure independent of payment methods:

• Stripe: "No matter which rail I take, I want to own that layer of programmable money."

• Mastercard: "Multi-rail company," covering cards, A2A, real-time payments, and blockchain.

• Adyen: "Global operating system for enterprise payments."

As payment methods become increasingly fragmented (cards, A2A, stablecoins, BNPL), the winners will be those companies that can intelligently route across all rails.

Convergence Points

Winning strategies can be distilled into: creating a compliant shell for programmable money, capturing value through distribution, trust, and compliance, rather than relying on holding protocols or exposing speculative positions. The most advantaged companies possess at least one of the following: large-scale distribution (Nu, PayPal, Revolut, Cash App), control of infrastructure (Visa, Stripe, Mastercard), or vertical integration (Robinhood, Block, SoFi).

Good Models vs. Bad Models

Scalable and Strong Business Models

Toll Booth Model of Payment Networks (Visa, Mastercard)

• Marginal cost per transaction is nearly zero; huge fixed cost leverage; network effects are nearly insurmountable.

• Essentially infinitely scalable: each new transaction adds revenue, but incremental costs are almost zero.

• Crypto integration risk: theoretically, stablecoins and A2A payments could bypass card organizations, but Visa and Mastercard's response is to position themselves as "networks of networks," sitting above all rails, including crypto.

Infrastructure-as-a-Service (Stripe, Adyen)

• Once embedded in a merchant's tech stack, switching costs are extremely high; revenue compounds as merchants grow; value-added services (anti-fraud, tax, billing) continuously elevate ARPU.

• Stripe processed $1.4 trillion in 2024 (approximately 1.3% of global GDP).

• Stripe's Bridge/Tempo bet is currently the most aggressive infrastructure play. If stablecoin payments scale, Stripe could capture the developer layer of crypto-native businesses.

Recurring Revenue + Float (Coinbase Subscriptions and Services, Revolut Premium)

• Interest from stablecoin reserves (Coinbase alone is expected to earn $332.5 million from USDC in Q4 2025), staking rewards, and subscription fees provide much more stable revenue than trading commissions.

• Revenue expands with AUM/AUC rather than just trading volume, offering stronger predictability.

Low-Cost Digital Banking for Underserved Markets (Nubank)

• Monthly service cost is only $0.80, while traditional banks charge $5–10+; monthly active rate is 83%+; net interest margin is 17.7%.

• In underserved banking markets, customer acquisition is almost viral; 122.7 million customers with significant cross-selling potential.

Higher Risk / Poor Scalability Models

Pure Transaction Fee Dependence

• Companies deriving over 90% of revenue from transaction fees are entirely at the mercy of market cycles. In a crypto bear market, transaction volumes may drop by 70–90%.

• Diversification is crucial: Coinbase's transaction revenue share has dropped from 96% in 2020 to an expected 59% in 2025. Robinhood now has 11 business lines. PFOF (Payment for Order Flow) Dependence

• PFOF has been banned in the EU and is under ongoing scrutiny in the U.S. Companies reliant on PFOF face existential regulatory risks to their core revenue models.

• Better path: Shift to subscriptions (Robinhood Gold), interest income, and institutional clients (acquisition of Bitstamp).

Crypto Businesses Without Recurring / Sticky Revenue

• Crypto exchanges relying solely on spot trading fees, without staking, stablecoin interest, custody, DeFi protocol income, or subscriptions—this is an extremely cyclical business.

• Good crypto business models will stack multiple revenue lines (trading + staking + interest + protocol fees + subscriptions).

Unprofitable "Bitcoin Revenue Lines"

• Block reported $1.97 billion in Bitcoin revenue in Q3 2025, but the cost of Bitcoin revenue was $1.89 billion, with a gross margin of only about 4% on BTC channel revenue. It boosted revenue but contributed little to gross profit.

• Its strategic value lies in ecosystem lock-in (users buying BTC on Cash App are more sticky), rather than directly profiting from BTC.

Framework: What Constitutes a "Good" Crypto Fintech Business Model?

Fintech Crypto Integration Playbook

The following playbook outlines how the ten companies execute the aforementioned foundations. To understand why these strategies work, please refer back to the "Major Trends" section. Stablecoin Integration (Most Common, Most Momentum)

• Visa: USDC settlement within the network.

• Mastercard: Card collaboration with OKX; acquisition of Zerohash.

• PayPal: Spontaneously issuing PYUSD ($3.6 billion circulation); supporting DeFi usage.

• Stripe: $1.1 billion acquisition of Bridge for stablecoin orchestration; building Tempo L1.

• Coinbase: Co-issuer/partner of USDC; expected stablecoin revenue of $1.4 billion in 2025.

Making Crypto Trading a Feature

• Robinhood: Native integration of crypto trading with stocks/options.

• Revolut: Over 200 tokens available for trading within the app.

• Nubank: NuCripto.

• Block/Cash App: Buying, selling, and transferring Bitcoin.

Adding costs is low; can capture retail demand in bull markets; and can deepen user stickiness. Building Blockchain Infrastructure In-House

• Coinbase → Base Chain (L2 based on OP Stack).

• Stripe → Tempo (L1, in partnership with Paradigm).

• Robinhood → Robinhood Chain (L2 based on Arbitrum).

Owning the chain = owning the economy (Sequencer fees, MEV, ecosystem network effects). The analogy is that Visa builds VisaNet itself rather than relying on third-party networks. Full-Stack Bitcoin Strategy (Block's Approach) Consumer wallet (Cash App) → Merchant acceptance (Square Bitcoin/Lightning) → Self-custody (Bitkey) → Mining (Proto) → Open-source development (Spiral).

This is a high-confidence vertical bet: if Bitcoin truly becomes a daily payment rail, Block will own every layer; if not, this is a large resource investment with uncertain outcomes. Custody and Institutional Services

• Coinbase Prime: Custodian for most Bitcoin/Ethereum spot ETFs in the U.S.

• Mastercard and Visa: Providing compliance/KYC/AML layers for institutional crypto adoption.

Institutional funds require trustworthy, regulated custody—this is a high-barrier, high-margin business. DeFi Inflows and Protocol Participation

• PayPal: PYUSD supports DeFi lending/trading on Ethereum.

• Coinbase: Base Chain hosts DeFi protocols; USDC is the dominant stablecoin in DeFi.

• Revolut & Robinhood: Staking services (ETH, SOL).

Integration Opportunities for Crypto Payments and DeFi

Upstream (Wholesale / Infrastructure Layer)

Stablecoin Settlement Network Using stablecoins for interbank settlements, capital management, and merchant payouts. Settlement times compressed from T+2 to near real-time, reducing correspondent bank costs.

• Beneficiaries: Visa, Mastercard, Stripe, Adyen.

• Example: Visa settling VisaNet obligations with USDC on Solana.

Tokenized Money Markets as Liquidity Using tokenized government bonds (e.g., Ondo OUSG, Franklin OnChain) as interest-bearing reserves, maintaining liquidity without taking on credit risk.

• Beneficiaries: PayPal, Nu, Revolut, SoFi.

• Example: Mastercard MTN supporting tokenized government bond assets.

Cross-Border Remittance Rails Using stablecoin rails to replace SWIFT/correspondent banks for B2B and consumer remittances. Instant settlements, lower fees, better FX rates.

• Beneficiaries: Stripe, PayPal (Xoom), Revolut, Nu.

• Example: Stripe enabling USDC payouts for global merchants.

Programmable Compliance Layer AML/KYC, transaction monitoring, and sanctions screening based on smart contracts. Automating compliance, reducing manual effort, achieving real-time risk scoring.

• Beneficiaries: All regulated players (especially those selling value-added services like Visa, Mastercard).

• Example: Visa Protect for A2A payments, Mastercard Crypto Secure.

Downstream (Consumer / Merchant Layer)

Stablecoin-Linked Cards Cards that allow direct spending from stablecoin balances, converting to fiat at the POS.

• Beneficiaries: Visa, Mastercard (infrastructure), Revolut, Cash App (distribution).

• Example: Visa's 130+ stablecoin card programs, Mastercard OKX Card.

Crypto-Backed Lending Using crypto assets as collateral for fiat loans without triggering taxable events.

• Beneficiaries: Robinhood, SoFi, Block, Revolut.

• Example: Bitcoin-backed loans offered through Cash App or SoFi.

Interest-Bearing Savings Accounts High-yield savings products supported by tokenized government bonds or DeFi lending protocols, delivered with a compliant shell.

• Beneficiaries: Nu, Revolut, PayPal, SoFi.

• Example: Revolut's "crypto earn" products, yielding close to staking returns.

Merchant Stablecoin Settlements Allowing merchants to settle in stablecoins rather than fiat, reducing FX risk and speeding up payouts.

• Beneficiaries: Stripe, Adyen, Square, PayPal.

• Example: Mastercard enabling merchants to settle in USDC, PYUSD, or USDG through Nuvei/Circle.

Instant Cross-Border P2P Stablecoin-driven remittances, arriving in seconds, with rates below 1%. Competing with Western Union/MoneyGram in LatAm and Asia.

• Beneficiaries: PayPal (Xoom), Revolut, Cash App, Nu.

• Example: Nu facilitating BRL → USDC → local currency transfers in Latin America.

Differentiated / High-Margin Niche Opportunities

Self-Custody Wallet-as-a-Service White-label self-custody solutions for institutions and high-net-worth users. Can charge custody fees while meeting self-custody compliance requirements.

• Beneficiaries: Robinhood (Bitkey), Block, Stripe (via Bridge).

• Example: Block's Bitkey hardware wallet.

Blockchain-Based Loyalty Programs Issuing points in token form for cross-ecosystem redemption. Enhancing stickiness and creating new revenue from tokenized rewards.

• Beneficiaries: Mastercard, Visa, PayPal.

Institutional DeFi Protocol Integration (High Potential) Providing regulated entry points for institutional DeFi lending, staking, and liquidity mining through compliant middleware.

• Beneficiaries: SoFi (Galileo), Stripe (Bridge), Mastercard (MTN).

• Example: SoFi Galileo providing white-label crypto staking for banks.

Privacy-Preserving Payments Using zero-knowledge proofs to enable "both private and compliant" stablecoin transfers. Supporting confidential corporate payments while meeting AML compliance requirements.

• Beneficiaries: All companies (especially B2B players like Visa/Mastercard).

Unbundling-Rebundling: A Structural Perspective

Connecting to insights from another report: The Architecture of Value: Structural Evolution of Financial Innovation and Deep Dive Report on Venture Capital Strategies

(https://claude.ai/30284df5d6ec8003aa52f792bb549832?pvs=25) Winners of Rebundling are Infrastructure Providers, Not Consumer Platforms The most enduring and scalable fintech businesses are those that let others do the bundling rather than bundling themselves:

Infrastructure players (Visa, Mastercard, Stripe, Adyen)

• 90–98% gross margins, 50–62% operating margins.

• Customer acquisition costs are nearly zero (developers/banks bring users).

• Network effects or developer lock-in serve as moats.

• Revenue grows with ecosystem expansion rather than direct customer acquisition.

Consumer Platforms (Robinhood, Nu, Revolut, PayPal):

• 30–50% gross margins, 10–25% operating margins.

• Customer acquisition costs of $200–450.

• Must achieve 3+ product adoption to become profitable.

• More vulnerable to regulatory changes and market cycles.

Visa captures 97.8% gross margin on $170 trillion in payment volume, while Robinhood's crypto trading revenue is cyclical—this comparison highlights the fundamental gap between the two. Three Key Dependencies Determining the Success of Rebundling Dependency 1: Source of Funds (Bank License = Compounding Moat)

• Winners: Nu ($19 billion in deposits, 3–4% cost of funds, 17.7% net interest margin), SoFi (bank license allows for deposit absorption).

• Losers: PayPal (unlicensed, cannot absorb deposits), Revolut (UK license delays, cannot compete on the lending side).

Consumer fintechs without bank licenses either get shackled by BaaS partners (e.g., Synapse collapse in 2024) or cannot internalize the "deposit—loan" spread—which is key to making rebundling profitable.

Dependency 2: Cross-Selling Economics (Threshold of 3+ Products)

• Single-product users (annual income $50, LTV $150) lose money at CAC of $200–450. Three-product users (annual income $180, LTV $540) start to become profitable.

• Success cases: Robinhood (11 products, ARPU $191, year-on-year +82%), Revolut (wealth business revenue +298%), Nu (cross-product monthly active rate 83%).

• Failure cases: PayPal (400 million users, but most only use checkout, Venmo/crypto/savings cross-selling struggles).

Dependency 3: Developer / Enterprise Lock-In (Depth of Integration)

• Stripe's moat: Once integrated with Billing + Tax + Connect + Radar, dismantling requires 6+ months of engineering effort. Each additional product compounds switching costs.

• Visa's genius of "mixed order": 20,000 banks compete for customers (decentralized), but all use Visa's protocol (centralized). Banks cannot leave because the network itself is the product. Zero CAC, 97.8% gross margin, collecting "toll fees" on $170 trillion in transaction volume.

For consumer crypto, structural challenges include: custody responsibilities, compressed profits (Uniswap 0.3% vs. Coinbase 1–2%), lack of lock-in (users can self-custody and withdraw), strong cyclicality (Coinbase's revenue down 75% in 2022–2023). The Foundation for Crypto Success: Be the "Stripe / Visa of Stablecoins" The common pattern of successful fintech cases is clear: build compliant middleware that abstracts the complexities of blockchain for enterprise and fintech clients.

Investment Theme 1: Stablecoin Orchestration Layer

Stripe's $1.1 billion acquisition of Bridge proves one thing: enterprises want stablecoin settlements but do not want to run nodes, manage wallets, or deal with licenses across 50 states.

• Winning product: An API that simultaneously handles multi-chain routing, liquidity optimization, compliance screening, and tax reporting. Enterprises only need to call POST /transfer, and the infrastructure takes care of the rest.

• Economic model: Charging a 0.5–1% take rate on massive transactions, with a marginal cost of zero per transaction, and extremely high switching costs once integrated. Also 90%+ gross margin, but applied to a stablecoin settlement market of over $20 trillion.

Investment Theme 2: Vault-as-a-Service ("Fireblocks" Style Approach)

PayPal, Robinhood, and Nu are all custodians of billions of dollars in crypto assets. Custody requires OCC compliance, MPC/HSM security, $100 million+ insurance, and disaster recovery.

• The opportunity lies in providing "AWS for crypto custody"—enterprises access via API, with it handling key management, policy engines (e.g., "withdrawals over $100,000 require 3 approvals"), compliance reporting, and OFAC screening.

• Every fintech that adds crypto needs it.

• Zero CAC (B2B sales cycle).

• High retention (switching custodians = 12+ months of security audits).

• Winners: Fireblocks ($8 billion valuation), Anchorage Digital (holds OCC license), Copper.co.

Investment Theme 3: DeFi Middleware / "Vault Curator" Layer

What is currently missing is: a "Stripe for DeFi yields." It can aggregate yields across Aave, Compound, Morpho, and tokenized government bonds (Ondo OUSG), while abstracting gas fees, generating tax reports (IRS-compliant 1099), and providing insurance shells and compliance layers.

Opportunities for Vault Curators:

• Ondo Finance: Tokenized government bonds, 5% yield.

• Backed Finance: Tokenized corporate bonds.

• Maple/Goldfinch: Institutional-grade DeFi lending with underwriters.

Specific example: SoFi has billions in deposits, while traditional accounts offer 0–1%. If its B2B platform Galileo can provide a "DeFi Yield API" connecting to 5% tokenized government bonds, SoFi can offer customers a 4% APY, keeping a 1% spread, without putting assets on its balance sheet. This middleware approach, responsible for compliance shells and tax reporting, is the current white space between protocols and regulated fintech. Framework: Assessing Fintech Business Models

Overview Table

Crypto Integration and Infrastructure Alignment of Each Company

Conclusion

The future of fintech lies in the integration of traditional financial platforms with programmable financial infrastructure. Blockchain technology is not replacing existing systems but is increasingly being integrated as a layer operating behind the scenes for settlement and liquidity. Stablecoins, tokenized assets, and on-chain markets bring faster settlements, cheaper cross-border payments, and new financial products, while being largely invisible to end users.

Ultimately, the companies that can capture value in digital finance are those that possess large-scale distribution, regulatory trust, and control over infrastructure. Whether through payment networks, developer platforms, or consumer financial ecosystems, the winners will be those platforms that abstract financial complexity while orchestrating across multiple payment rails. As programmable money becomes more widely adopted, fintech companies that successfully integrate traditional finance with blockchain infrastructure will shape the next generation of global financial services.