The fintechs racing for their own bank charter used to be lenders and neobanks trying to escape sponsor-bank dependency. Now the rush has reached a new floor: the infrastructure companies that build the pipes those fintechs run on. On July 29, Increase, the banking-technology firm founded by Stripe’s first employee, announced Increase Bank, a chartered institution built by acquiring and rebuilding a small Washington community bank rather than partnering with one.
From Software Vendor to Chartered Owner
Increase was founded in 2020 by Darragh Buckley, who spent six years as Stripe’s first employee working on its bank-partner relationships before starting his own company. Since then, Increase has built API-first core banking technology that companies including Gusto, Ramp, and Stripe now rely on to move, store, and lend more than $500 billion a year, according to the company. That business model, selling banking infrastructure to fintechs who still needed a separate chartered bank partner behind it, is exactly what Increase just changed for itself.
According to reporting on the deal, Buckley acquired voting control of Twin City Bank, a community bank based in Longview, Washington, last year, then moved to take full ownership and rename it Increase Bank. Jon Jones now runs the institution as chief executive, and the company says it will keep the bank’s physical branch and its existing community-banking business in Longview rather than shut it down. The result: Increase now owns the charter it used to need a partner bank to provide.
The Frustration That Started It
Buckley frames the move as solving a problem he lived at Stripe. “This is the bank I needed at Stripe,” he wrote in the company’s announcement. Before starting Increase, he said, “when we worked with banks, they often struggled to understand what we needed and why it mattered. Problems that seemed minor to them, like managing wires over email, were blockers for us. We had to build all kinds of workarounds.”
That complaint is a familiar one across fintech: banks’ core systems were built for branch tellers and call centers, not for software that expects an API. Increase’s pitch is that its own core technology removes the translation layer entirely. “Everything is programmable, with minimal human intervention even for edge cases,” the company says. “We pass through high-fidelity data straight from the payment rails.”
A Charter Rush With a New Segment
FinTech has tracked this charter rush building all year on the lending and payments side. Upstart cleared its first conditional OCC approval to bring AI-native underwriting inside a nationally chartered bank. Wise was rejected for a national trust charter while Flex chose the industrial-bank route instead, splitting the fintech charter path into two distinct tracks depending on what a company actually needs the charter to do.
Increase’s move adds a third track: the infrastructure vendor buying the charter outright rather than applying for a new one or partnering around an existing one. It is faster in one sense, since acquiring an already-chartered bank sidesteps the yearslong de novo charter process regulators typically require, and heavier in another, since it makes Increase, not just its bank partners, directly responsible for the safety and soundness obligations that come with owning an FDIC-member institution. Other fintech infrastructure providers, including Lead Bank and Column, have taken variations of the same path, suggesting owning the charter is becoming a competitive requirement in this segment rather than an edge case.
Buy Versus Build Versus Charter
The three tracks this charter rush has now produced look different up close. Upstart’s path runs through a de novo-style conditional approval from the Office of the Comptroller of the Currency, built around a specific product need: bringing its AI underwriting model inside a nationally regulated bank rather than leasing that regulatory status from a partner. Flex’s industrial-bank route exists because that charter type lets a commercial parent own a bank without becoming a bank holding company in the fuller sense, a structure suited to a company whose core business is not banking. Increase’s acquisition is a third shape entirely: buying an existing, already-operating community bank and converting its technology stack rather than starting a charter application from zero.
Each path trades speed against control in a different place. A conditional OCC approval and a new industrial charter both still require a regulator to sign off on a business plan built from scratch, a process that can run years and is not guaranteed to succeed, as Wise’s rejection showed. Acquiring a working, already-chartered institution swaps that approval risk for acquisition risk and the operational work of migrating a real bank, with real deposits and a real branch, onto new infrastructure. Increase’s decision to keep Twin City Bank’s Longview branch and community-banking business running suggests it is treating that migration carefully rather than shutting down the acquired institution’s existing operations while it rebuilds the technology underneath.
What This Means for the Finance Leader
For a CFO or treasury lead evaluating a banking-as-a-service or embedded-banking vendor, Increase Bank changes the diligence checklist. First, ask whether your infrastructure provider’s underlying bank relationship is a partnership, a preferred-partner arrangement, or, increasingly, direct ownership, since each carries a different concentration and continuity risk if that relationship changes. Second, treat “we have a bank partner” as an incomplete answer: request the actual chartering entity’s name, its primary regulator, and how long the current arrangement has been in place. Third, watch whether your vendor’s roadmap includes acquiring its own charter. It signals a strategic bet that programmatic, API-first banking cannot be fully delivered through a partnership model, no matter how good the middleware is.
The practical takeaway is not that every infrastructure vendor needs to own a bank. It is that the finance leaders who depend on these platforms should now be asking who actually holds the charter behind their embedded banking stack, and whether that answer is likely to change.
Source: Increase
