Banking-as-a-Service (BaaS) just produced its clearest post-Synapse verdict yet: own the charter or stay middleware. Increase, the banking-infrastructure API provider used by Stripe, Ramp and Gusto, launched Increase Bank on July 31, 2026 — a Federal Deposit Insurance Corporation (FDIC) member institution built out of Twin City Bank, the single-branch Washington lender its founder quietly took control of and renamed, per FinTech Global. The structural significance is what disappears: the sponsor-bank-plus-middleware stack whose failure at Synapse in 2024 froze end-user deposits is replaced, for Increase’s clients, by a fintech that is its own regulated bank.
The mechanics were deliberate. Founder Darragh Buckley — Stripe’s first employee, who spent six years there building its Wells Fargo bank-partner relationship — bought voting shares in Twin City Bank of Longview, Washington in 2025, then took full control this July, according to Bloomberg’s July 29 report. Twin City was a deliberately modest target: roughly $75 million in assets, one branch, and — the part that matters — a clean regulatory record and an FDIC certificate. The new structure splits the group into Increase Bank, the regulated deposit-taking entity, and Increase Technologies, the non-bank software layer, with partner banks remaining in the stack for some products.
The contrast with the rest of the market landed in the same news cycle. The Office of the Comptroller of the Currency denied Wise’s application for a US national trust bank charter this week, citing a multistate consent order over the payment company’s anti-money-laundering programme, per FinTech Futures. The two decisions describe the same regulatory posture from opposite sides: US agencies are not handing out de novo charters to fintechs, but they will tolerate a fintech acquiring a small, clean, supervised bank — the route Buckley took, and one rival infrastructure providers such as Unit, Treasury Prime and Synctera, all still dependent on sponsor banks, have so far not managed.
“This is a bank built by a team of product-obsessed operators for ambitious companies that are just as obsessed with building the best possible products for their customers,” Buckley said in the launch announcement. Ramp co-chief executive Karim Atiyeh endorsed the model in the same release: “Increase provides the banking infrastructure we need to do just that.” Buckley put the strategic logic more plainly to Bloomberg: “It’s time for us to tie those things more tightly together.”
Having tracked the fintechs-becoming-banks arc across jurisdictions this year, the pattern is now unmistakable — and global. In the EU, bunq opened its own banking licence as a BaaS platform and Riverty stood up a Luxembourg bank for embedded finance; in Canada, KOHO raised C$130 million with a bank licence in sight; in Australia, Revolut won an ADI licence in a market that had buried its neobanks. The banking-as-a-service middleware model that defined 2019–2023 is being unbundled from both directions: regulators squeezed sponsor-bank programmes after Synapse, and the strongest fintech infrastructure players are responding by becoming the regulated entity themselves.
What happens next turns on two questions. First, whether Increase Bank’s supervisors let a $75 million community bank scale into the deposit flows of clients the size of Ramp and Stripe — growth-rate constraints on acquired community banks are exactly where the Federal Reserve and FDIC have historically pushed back. Second, whether the buy-a-bank template survives its own popularity: charters with clean records and willing sellers are a finite resource, and every additional fintech acquisition raises the political salience of the route. If both hold, the winners of the next BaaS cycle will not be the platforms with the best APIs on top of someone else’s balance sheet, but the handful — like Increase — whose API terminates inside their own bank.
Rick Steves
Rick Steves has seen business and economics through many lenses. He joined the financial services industry in 2009, and has been a financial journalist since 2011. He holds a degree in Business Administration and has experience producing real-time news, from both buy-side and sell-side, as well as for retail traders, brokers and service providers. Steves' work has appeared in a variety of online publications including FX Street, NewsBTC, FinanceFeeds, and The Industry Spread. Rick has great interest in the dynamics of the trading industry. The never-ending clash between technology, economics, regulation, and more importantly, the people.
