The fintech landscape reached a significant milestone this week as Increase, the API-first banking platform, officially announced the launch of Increase Bank. This move marks the company’s evolution from a specialized financial technology provider to a full-stack, FDIC-member financial institution. By integrating its proprietary, built-from-scratch banking core with a regulated bank charter, Increase aims to redefine how ambitious technology companies build, launch, and scale financial products. The launch represents a culmination of a multi-year strategy to provide direct, programmable access to the foundational rails of the global financial system, including the Federal Reserve, The Clearing House, and Visa.
The transition to a full-stack model is centered on the integration of Increase Bank, an institution that combines the regulatory standing of a traditional bank with the agility of a modern software company. This hybrid approach allows Increase to offer its clients a rare combination: the legal and capital protections of an FDIC-insured bank and the high-performance API infrastructure required by modern developers. According to Increase Founder Darragh Buckley, the bank was designed specifically for "product-obsessed operators" who require reliability, speed, and flexibility at a scale that traditional banking infrastructure has historically struggled to provide.
The Strategic Path to a Bank Charter: The Twin City Bank Acquisition
The path to the launch of Increase Bank was paved by a significant strategic move in 2025. Rather than navigating the lengthy and often uncertain process of applying for a de novo bank charter—a process that can take years and carries a high rate of rejection—Increase chose to acquire an existing institution. The company purchased Washington-based Twin City Bank, a move that provided an immediate regulatory foundation.
Following the acquisition, Increase has maintained a dual-brand strategy to respect the legacy and community roots of the acquired institution. While the parent entity and the high-tech API offerings now operate under the Increase Bank banner, the single-branch physical location continues to serve its local community banking customers under the original Twin City Bank name. This approach allows Increase to fulfill its regulatory obligations and community reinvestment goals while simultaneously deploying its advanced technology stack to a global audience of fintech innovators.
The acquisition of a community bank by a fintech firm is a strategy that has gained momentum in recent years. By owning the charter, Increase eliminates the "middleware" layer that often characterizes the Banking-as-a-Service (BaaS) sector. In a typical BaaS model, a fintech acts as a broker between a technology client and a legacy sponsor bank. This often leads to friction, as the legacy bank’s aging core systems frequently clash with the high-frequency demands of modern APIs. By owning the bank, Increase internalizes the compliance, operational, and technological responsibilities, providing a seamless vertical integration.
Technical Innovation: A Core Built for the Modern Era
At the heart of Increase Bank is a banking core built entirely from the ground up. Most traditional banks, and even many newer fintechs, rely on "legacy cores"—software systems built decades ago that are difficult to update and slow to process data. These legacy systems often rely on batch processing, where transactions are bundled and processed at the end of the day, leading to delays in fund availability and data reporting.
Increase Bank’s core is different. It is designed for real-time, event-driven architecture. This allows for:
- Direct Connections to Payment Rails: Increase Bank holds direct memberships with the Federal Reserve and The Clearing House. This eliminates intermediaries, reducing latency and potential points of failure for ACH transfers, domestic wires, and real-time payments (RTP).
- Programmable Ledgering: Developers can programmatically create and manage thousands of virtual or physical accounts, each with its own ledger, allowing for complex money movement workflows that were previously impossible to automate.
- Native Visa Integration: As a direct member of the Visa network, Increase Bank allows companies to issue cards and process transactions with greater control over authorization logic and fraud prevention.
- Unified Compliance: By integrating compliance checks directly into the API workflow, Increase Bank enables automated Know Your Customer (KYC) and Anti-Money Laundering (AML) monitoring, ensuring that speed does not come at the expense of regulatory rigor.
Addressing the Crisis in Banking-as-a-Service
The launch of Increase Bank comes at a critical juncture for the fintech industry. The Banking-as-a-Service sector has recently faced intense scrutiny from federal regulators. Several high-profile failures and consent decrees involving traditional banks that partnered with fintechs have highlighted the risks of the "middleware" model. Issues such as inadequate oversight of third-party partners, reconciliation errors, and ledger discrepancies have plagued the industry.
By becoming the bank itself, Increase addresses these systemic risks head-on. The company no longer has to convince a skeptical third-party bank to approve a new feature or risk-heavy use case. Instead, Increase Bank manages its own balance sheet and regulatory relationships, providing a level of stability that is highly attractive to enterprise-grade clients. This "full-stack" approach mirrors the strategies of other successful fintech-turned-banks like SoFi, Varo, and LendingClub, but with a specific focus on the B2B infrastructure market rather than consumer banking.
Diede van Lamoen, Head of International at Stripe, noted that a fintech’s ability to scale is often tethered to the pace of its banking partner. "Increase was built by people who have first-hand experience with these challenges," van Lamoen stated, emphasizing that direct access to payment rails is essential for companies moving billions of dollars in volume.
Client Portfolio and Market Impact
Since its founding in 2020, Increase has quietly become the backbone for some of the most prominent names in the "New Economy." Its client list includes:
- Gusto: The payroll giant uses Increase to manage the complex movement of funds between employers and employees, ensuring that paychecks are delivered reliably and on time.
- Ramp: The spend management platform leverages Increase’s infrastructure to power its card issuing and reimbursement features.
- Stripe: The global payments leader partners with Increase to enhance its banking and treasury services for platforms and marketplaces.
For these companies, the launch of Increase Bank provides a more robust foundation. It reduces "platform risk"—the danger that a banking partner might suddenly change its terms or face regulatory action that disrupts service. With Increase now operating as a regulated bank, these high-volume users gain the assurance of FDIC oversight and a partner that is directly responsible for the movement and safety of their funds.
Chronology of Increase’s Evolution
To understand the significance of today’s launch, it is helpful to look at the company’s trajectory over the last six years:
- 2020: Increase is founded by a team with deep roots in the payments industry, including former employees of Stripe. The mission is to build the "API for the Federal Reserve."
- 2021-2023: The company develops its proprietary banking core and establishes its first wave of partnerships with major fintechs like Ramp and Gusto. During this period, Increase operates primarily as a high-end technology layer for existing banks.
- 2024: Recognizing the limitations of the partner-bank model, the company begins the process of seeking a bank charter.
- 2025: Increase successfully completes the acquisition of Twin City Bank in Washington. This provides the necessary FDIC membership and regulatory framework.
- 2026 (July): Increase Bank is officially launched, integrating the Twin City Bank charter with the Increase technology stack to create a unified, programmable banking institution.
Economic Implications and Future Outlook
The move into full-scale banking also changes the economic profile of Increase. In the traditional fintech model, revenue is often split between the technology provider and the sponsor bank. By owning the bank, Increase can capture a larger share of the economics, including the interest income on deposits (net interest margin) and the interchange fees generated by card transactions.
Furthermore, the "programmable bank" model is expected to drive growth in the embedded finance market, which is projected to reach over $250 billion by 2032. As more non-financial companies—from SaaS providers to logistics firms—look to offer financial services to their customers, the demand for a reliable, API-first bank core will only increase.
Industry analysts suggest that Increase Bank’s launch may trigger a new wave of consolidation or "charter-seeking" among other top-tier fintech infrastructure providers. As regulators demand more direct oversight and transparency, the era of the "unregulated middleware" may be drawing to a close, replaced by a new generation of tech-native banks.
Conclusion: Setting a New Standard for Financial Infrastructure
Increase Bank represents more than just a new name for an old institution; it is a fundamental redesign of what a bank can be in the digital age. By stripping away the legacy baggage of traditional banking and replacing it with a developer-first philosophy, Increase has positioned itself as the premier utility for the next generation of financial services.
The integration of a modern core with a regulated charter allows Increase to offer a level of control and transparency that was previously unavailable. For the companies powering the modern economy, Increase Bank provides the "financial plumbing" necessary to move money at the speed of the internet, backed by the security and stability of the American banking system. As the company continues to scale, its impact on the efficiency and accessibility of global finance is likely to be profound, setting a new benchmark for what it means to be a "bank" in the 21st century.
