Last updated September 17, 2026.
You probably used fintech today without thinking about it: a tap-to-pay at the coffee shop, a transfer in a banking app, a "pay in 4" button at checkout. "Fintech" is simply the use of software to deliver financial services, but behind that simple label sits a sprawling industry of apps, banks, networks, and regulators. This guide maps the territory so the rest of the news makes sense.
Key takeaways
- Fintech means using technology to deliver financial services. It includes consumer apps you see and the infrastructure you don't.
- Many fintech apps are not banks. They often rely on a partner bank to hold your money, and that affects how deposit insurance works.
- Investment rebounded in 2026: KPMG counted $103.1 billion of global fintech investment in the first half of the year, concentrated in large deals [1].
- Rules are in flux in the U.S.: the open-banking rule is enjoined and being reconsidered, stablecoin rules are being written, and several fintechs have won conditional bank charters [2][3][4].
Fintech, defined
Financial technology (fintech) is any product or company that uses software to move, store, lend, invest, insure, or manage money. The term covers three broad groups:
- Startups and scale-ups built around software, such as neobanks, payment processors, and online lenders.
- Traditional institutions (banks, credit unions, card networks) modernizing their own products.
- "Techfin": large technology companies offering financial features, such as digital wallets built into phones.
The line between these groups blurs constantly. A payment company may apply for a bank charter; a bank may license its accounts to a software company. So it helps to map fintech by what it does rather than who does it.
The fintech map: eight categories
| Category | What it does | Everyday examples of the product type | Main watch-outs |
|---|---|---|---|
| Payments | Moves money between people and businesses | Card acceptance, digital wallets, P2P apps, pay by bank | Fees, fraud, irreversibility of some transfers |
| Digital banking | Checking, savings, debit cards through an app | Neobanks, online banks | Whether the app is a bank or uses a partner bank |
| Lending and credit | Loans, credit lines, installment plans | BNPL, personal loans, earned wage access, credit builders | Total cost, late fees, credit reporting |
| Investing and wealth | Buying and managing investments | Robo-advisors, brokerage apps | Investment risk; not deposit-insured |
| Insurance (insurtech) | Pricing and selling insurance digitally | Embedded insurance at checkout | Coverage exclusions |
| Business finance (B2B) | Cards, bill pay, payroll, treasury for companies | Spend management, AP/AR automation | Contract terms, data access |
| Infrastructure | APIs and rails other firms build on | Banking-as-a-Service, identity checks, payment networks | Hidden dependencies when a provider fails |
| Digital assets in payments | Stablecoins and tokenized money used for payments | Stablecoin settlement, tokenized deposits | Regulation still being implemented |
The part you don't see: rails and infrastructure
Every fintech app rides on payment rails, the shared systems that actually move money between institutions:
- Card networks (Visa, Mastercard, American Express, and Discover, which Capital One acquired in May 2025 [5]) connect the card issuer to the merchant's bank. Related field note
- ACH (Automated Clearing House) handles payroll, bill payments, and many app transfers in batches.
- Instant payment networks such as The Clearing House's RTP network and the Federal Reserve's FedNow Service settle transfers in seconds, around the clock. Related field note
- Wires handle large, time-sensitive transfers.
Scale matters here. The Federal Reserve's latest triennial payments study, released July 1, 2026, found U.S. consumers and businesses made 236.6 billion noncash payments in 2024; cards accounted for more than three-quarters of those by number, while ACH accounted for almost three-quarters by value [6].
Above the rails sits a layer of infrastructure companies: processors, identity-verification vendors, and Banking-as-a-Service (BaaS) providers that let a non-bank app offer accounts and cards issued by a licensed partner bank. That arrangement makes launching a financial product faster, but it adds links to the chain. The 2024 collapse of the BaaS middleware company Synapse showed what can happen when records across those links don't match [7]. Related field note
Is a fintech app a bank?
Usually not. This is the single most important thing for a consumer to understand.
- A bank or credit union holds a government charter, is supervised by prudential regulators, and (if insured) offers deposit insurance.
- A neobank is typically a technology company with a friendly app. Your money sits at a partner (sponsor) bank, often in a pooled account.
- FDIC insurance covers up to $250,000 per depositor, per insured bank, per ownership category, and it protects against the failure of the bank, not the failure of the app [8].
Coverage can "pass through" a pooled account to each customer, but only when the bank's and the fintech's records clearly show who owns what [9]. Related field note
Why fintech is growing again in 2026
After a funding slump earlier in the decade, investment picked up. KPMG's Pulse of Fintech H1'26 (published August 25, 2026) reported:
- $103.1 billion in global fintech investment across 2,100 deals in the first half of 2026, up from $72.2 billion in the second half of 2025 [1].
- The Americas accounted for $86.9 billion, including $80.8 billion in the U.S. [1].
- Payments drew $44.2 billion, much of it from a few very large acquisitions; KPMG itself noted the rebound "was far from broad-based" [1].
A caution for readers: investment totals include mergers and private-equity buyouts, so a big year for dollars does not necessarily mean a big year for new startups. KPMG is a professional-services firm that advises the industry.
The rules shaping fintech right now
Fintech is regulated by activity, so a single app may answer to several regulators. In the U.S., the main players are the Consumer Financial Protection Bureau (CFPB), bank regulators (FDIC, OCC, Federal Reserve), state money-transmitter regulators, the SEC and FINRA for investing, and FinCEN for anti-money-laundering rules. Several big policy threads are open as of September 17, 2026:
Open banking (Section 1033)
The CFPB finalized its personal financial data rights rule in October 2024, which would require many providers to share consumer-permitted data. A federal court in the Eastern District of Kentucky has enjoined enforcement, and the CFPB began reconsidering the rule through an advance notice in August 2025 [2]. As of April 2026, the rule existed "on paper, but not in practice" [2]. Meanwhile, JPMorgan Chase began charging data aggregators such as Plaid for access in 2025 [10]. Related field note
Stablecoins (GENIUS Act)
Congress passed the GENIUS Act in July 2025 to create a federal framework for payment stablecoins. It takes effect on the earlier of January 18, 2027, or 120 days after final regulations are issued [3]. Regulators including the OCC (March 2026) and FDIC (April 2026) have published proposed rules [3][11]. Related field note
Bank charters
Several fintechs have sought their own charters instead of relying on partner banks. American Banker's tracker lists OCC conditional approvals in 2026 for companies including Nubank, Mercury, and Upstart, as well as numerous crypto-related trust banks, and at least one denial [4]. Revolut announced conditional OCC approval for a U.S. national bank in early September 2026; other approvals, including from the Federal Reserve and FDIC, are still required before a bank can open [12]. A conditional approval is not a finished bank. Related field note
Card fees
A long-running merchant class action against Visa and Mastercard reached a revised settlement that Judge Brian Cogan preliminarily approved in June 2026; final approval and possible appeals are still ahead [13]. Related field note
How fintech companies make money
Understanding the business model tells you what a "free" app is really selling:
- Interchange: a slice of each card swipe, paid by the merchant's side.
- Float and interest: earnings on customer balances held at partner banks.
- Lending: interest, late fees, and merchant fees (for BNPL).
- Subscriptions and fees: premium tiers, instant-transfer fees, FX markups.
- Software and platform fees: charged to businesses using APIs.
Who fintech serves, and where it falls short
Fintech has lowered costs and increased speed for many people: instant transfers, lower-cost remittances, and accounts without minimum balances. But the same speed creates risks: authorized payment scams that are hard to reverse, confusing insurance claims, and credit products that don't look like credit. Related field note
A quick way to size up any app:
- Who legally holds my money, and is it insured?
- How does the company earn revenue from me?
- What happens if the company, not the bank, fails?
- Can I dispute a transaction, and under what law?
Explore the payment path Related field note
FAQ
What is fintech in simple terms? Fintech is the use of software and technology to provide financial services, such as payments, banking, lending, investing, and insurance.
Are fintech apps safe? Many are, but "safe" depends on who holds your money and what protections apply. Check whether the company is a bank or uses a partner bank, and read how deposit insurance applies [8][9].
Is a neobank the same as a bank? Not usually. Most neobanks are technology companies that partner with chartered banks. A few fintechs are pursuing their own charters [4].
What's the difference between fintech and a traditional bank? Traditional banks hold charters and take deposits directly. Fintechs may offer similar features through partnerships, often with a stronger focus on app design and specific niches.
Is crypto part of fintech? Crypto overlaps with fintech where it touches payments and banking, such as stablecoins used for settlement. U.S. stablecoin rules under the GENIUS Act are still being implemented [3].
Who regulates fintech in the U.S.? It depends on the activity: the CFPB, federal and state bank regulators, state money-transmitter agencies, the SEC and FINRA, and FinCEN, among others.
Sources
- KPMG International, "Momentum building in fintech market as investment concentrates on scaling business models, says KPMG's H1'26 Pulse of Fintech," https://kpmg.com/xx/en/media/press-releases/2026/08/momentum-building-in-fintech-market-as-investment-concentrates-on-scaling-business-models.html, Aug. 25, 2026, accessed 2026-09-17.
- Cozen O'Connor, "Section 1033 Compliance Date: Open Banking Rule Enjoined and Under Reconsideration," https://www.cozen.com/news-resources/publications/2026/section-1033-compliance-date-open-banking-rule-enjoined-and-under-reconsideration, Apr. 9, 2026, accessed 2026-09-17.
- Chapman and Cutler LLP, "GENIUS Act Rulemaking and Reporting Tracker," https://www.chapman.com/publication-genius-act-rulemaking-tracker, updated July 16, 2026, accessed 2026-09-17.
- American Banker, "Fintechs asking for, and receiving, bank charters in 2026," https://www.americanbanker.com/news/fintechs-asking-for-and-receiving-bank-charters-in-2026, Apr. 28, 2026 (updated Sept. 4, 2026), accessed 2026-09-17.
- Capital One Financial Corp., "Capital One Completes Acquisition of Discover," https://investor.capitalone.com/news-releases/news-release-details/capital-one-completes-acquisition-discover, May 18, 2025, accessed 2026-09-17.
- Federal Reserve Board, "Federal Reserve issues initial findings from its 2025 triennial payments study," https://www.federalreserve.gov/newsevents/pressreleases/other20260701a.htm, July 1, 2026, accessed 2026-09-17.
- Consumer Financial Protection Bureau, "Synapse Financial Technologies, Inc." (enforcement action), https://www.consumerfinance.gov/enforcement/actions/synapse-financial-technologies-inc/, accessed 2026-09-17.
- FDIC, "Understanding Deposit Insurance," https://www.fdic.gov/resources/deposit-insurance/understanding-deposit-insurance, accessed 2026-09-17.
- Electronic Code of Federal Regulations, 12 CFR 330.5 and 330.7, https://www.ecfr.gov/current/title-12/chapter-III/subchapter-B/part-330/section-330.5, accessed 2026-09-17.
- Payments Dive, "Plaid to pay for JPMorgan data," https://www.paymentsdive.com/news/plaid-to-pay-for-jpmorgan-data-open-banking-fintechs/760192/, Sept. 16, 2025, accessed 2026-09-17.
- Federal Register, "Implementing the GENIUS Act for the Issuance of Stablecoins by Entities Subject to the Jurisdiction of the OCC" (proposed rule), https://www.federalregister.gov/documents/2026/03/02/2026-04089/, Mar. 2, 2026, accessed 2026-09-17.
- Disruption Banking, "Revolut Receives Conditional Approval from U.S. Office of the Comptroller of the Currency to Form a National Bank," https://www.disruptionbanking.com/2026/09/03/revolut-receives-conditional-approval-from-u-s-office-of-the-comptroller-of-the-currency-to-form-a-national-bank/, Sept. 3, 2026, accessed 2026-09-17.
- American Banker, "Judge approves card network-fee settlement with merchants," https://www.americanbanker.com/payments/news/judge-approves-card-network-fee-settlement-with-merchants, June 10, 2026, accessed 2026-09-17.
Disclaimer: This article is for educational purposes only and is not financial, legal, or tax advice. Products, fees, rules, and company statuses change; verify current terms directly with providers and official sources before making decisions.