Fintech’s next edge is unglamorous
Fintech startups once promised disruption with flashy apps and instant approvals. The real advantage, however, lies in the infrastructure customers never see.
Sara Khairi, editor at Tearsheet, states the new competitive edge comes from fraud controls, settlement workflows, and data systems. These elements don’t make headlines, but they decide whether a company’s costs rise with revenue or fall as it expands.
The math behind the moat
Industry figures show this change is already happening. Global fintech revenue reached $504 billion in 2025, a 22% increase from the previous year, based on research by BCG and QED Investors. The more revealing detail: 74% of the largest public fintechs were profitable, with average EBITDA margins growing by 4 percentage points to 20%. Profitability, not just growth, now separates the winners from the rest.
Adyen’s 2025 results illustrate this trend. The payments processor saw processed volume climb 21% (excluding one high-volume client), while net revenue rose 18%. Operating expenses grew only 13%. EBITDA increased 26%, lifting margins to 53% from 50% the prior year. The company attributed its gains to a single-platform architecture, which processes more transactions without proportional cost increases.
Operating leverage—where revenue outpaces expenses as volume grows—is now the key trait of resilient fintech businesses. Success depends less on acquiring customers faster than rivals and more on serving them at lower costs over time.
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Why boring beats bold
Fintech marketing typically highlights speed, convenience, or new features. Rarely does it mention reconciliation engines or underwriting models. Yet these back-end systems create real differentiation. As more transactions flow through the same infrastructure, data improves, automation becomes more accurate, and costs per transaction drop. Scale doesn’t just mean more customers; it means better economics for each one.
The focus for investors has shifted. For years, the pitch centered on user growth and network effects. Now, the critical question is whether a company’s technology can turn scale into a lasting advantage. The answer often lies in the parts of the business not shown in demos.
Khairi explains that the strongest advantages today aren’t built on proprietary algorithms or exclusive deals. They come from systems that become smarter and more cost-effective as they grow. This kind of progress doesn’t win awards, but it creates long-term stability.
Adyen’s margin growth didn’t result from a single breakthrough. It came from refining processes most users ignore. Other fintechs are following the same path, quietly strengthening their positions. The competition isn’t just about gaining customers—it’s about serving them at a cost others can’t match.
The shift doesn’t eliminate innovation. It moves the most valuable work to places no one notices. Payment security features, for example, often rely on similar behind-the-scenes improvements to stay effective.
