The Public Ledger: Bank Reports Show Consumer Strength

Hello, Fintech Friends!

On Tuesday (July 14), J.P. Morgan, Wells Fargo, Bank of America, and Citi reported second quarter results and, in the process, confirmed that the U.S. consumer remains in excellent shape with card volume growth accelerating and credit loss rates remaining contained.

On debit, J.P. Morgan, Wells Fargo, and Bank of America, which together make up roughly one-third of total U.S. debit card volume, reported a 10% increase in aggregate volume during the second quarter versus the prior year, about a 2-point increase from the first quarter, and the highest growth rate going all the way back to the end of 2021, when consumers were being showered with pandemic-era stimulus payments.

Similarly, J.P. Morgan, Bank of America, and Wells Fargo reported accelerating credit card volume growth, ranging from a 1-point to a 2.5-point increase versus the first quarter, with growth rates also reaching multi-year highs. Credit loss and delinquency rates fell from the first quarter, in line with historical seasonal patterns.

Charlie Scharf, CEO of Wells Fargo, summed up the backdrop succinctly: “consumer spending is higher, charge-offs are lower, and savings and investments are growing across customer segments.”

So, what does it mean for payments and fintech companies? Mostly good things…I hope. The networks, which have the broadest exposure to domestic consumer spending, should put up good results. After all, the large banks are reporting volumes that flow across the networks’ platforms. Outside the networks, other payments companies have more exposure to specific categories and verticals, including retail, restaurants, hospitality, and e-commerce, among others. Presumably, a rising tide should lift all boats, but that’s not necessarily always the case. Finally, for lend-centric fintechs, strong credit performance may continue to push back against a key bear argument, potentially propelling already strong year-to-date returns even higher.

But, alas, some may argue that near-term results don’t matter much, and payments and fintech stocks are more likely to (continue to) trade on news flow around regulatory developments (the CLARITY Act and interchange legislation and litigation) and emerging competitive threats (stablecoins, AI, agentic commerce, and…banks potentially purchasing PIN debit networks—see below). As the last couple earnings seasons have shown, anything can happen, including plenty of fireworks, so stay tuned.

Bob Hammel

p.s. Have feedback? Reach out on X

According to media reports, Stripe and Advent International (Advent) have made a joint bid to buy PayPal for more than $53 billion, or approximately $60.50 per share, a premium of 28% versus Tuesday’s closing price. Under this scenario, PayPal would remain intact, with ownership split equally between Stripe and Advent. PayPal has not formally responded to the offer, according to reporting. The bid values PayPal at approximately 10.5x it’s 2027 consensus EPS forecast of $5.75. In my opinion, PayPal’s acceptance of this initial offer is the least likely outcome. More likely scenarios are that PayPal rejects the bid out of hand, Stripe and Advent increase their bid, they bid for separate PayPal assets, or another entity makes a higher offer for either all or part of PayPal. Of course, key questions about a potential Stripe-PayPal tie-up remain unanswered, including whether a deal would pass regulatory muster in both the U.S. and Europe.

Read more: Stripe, Advent offer to buy PayPal for more than $53 billion, sources say

Last week, the Wall Street Journal reported that some of the nation’s largest banks, including J.P. Morgan, Bank of America, and Wells Fargo, are considering an acquisition of one of Fiserv’s debit networks. Fiserv owns two: Star and Accel. According to the Journal, a key driving force behind a potential acquisition is for the banks to bypass the interchange cap imposed on large financial institutions under the Durbin Amendment, which they can do so by owning a network. To demonstrate a deal’s potential, consider the $1.7 trillion of debit card volume generated by J.P. Morgan, Bank of America, and Wells Fargo during 2025 multiplied by 74-bps—the difference between uncapped (121-bps) and capped (47-bps) debit interchange rates, as reported by the Federal Reserve—yielding nearly $13 billion of additional revenue potential that would come directly from the merchants’ pockets. It is precisely for this reason a deal may be difficult to achieve given Congress’ sensitivity to interchange rates and their quest to lower them.    

Read more: JPMorgan, Bank of America and Other Banks Explore a Deal to Shake Up Payments World

Following last month’s departure of Mike Lyons and promotion of co-President Takis Georgakopoulos to CEO, last week Fiserv announced co-President Dhivya Suryadevara, who oversaw the company’s Financial Solutions business, will be leaving Fiserv at the end of the month. In an SEC filing making the announcement, Fiserv reported that Ms. Suryadevara cited ‘good reason’ for leaving, which included a change in the company’s CEO. Two long-time Fiserv veterans will take over leadership of Fiserv’s Financial Solutions business on an interim basis. Once thought of as a durable organic mid-single-digit grower, Fiserv’s Financial Solutions business has struggled as of late as it deemphasized non-recurring revenue sources, rolled back some previous price increases, and dealt with elevated attrition in its core banking business due to platform consolidations, lagging innovation, and service issues.

Read more: Fiserv July 7, 2026 8-K Filing