Increase Twin City Bank acquisition gives fintech its own bank

The Increase Twin City Bank acquisition gives the banking infrastructure fintech control of a community bank in Washington State, adding a bank operation to technology already used by Ramp and Stripe. Increase says its application programming interfaces help companies move, hold and lend hundreds of billions of dollars.

Increase was founded in 2020 by Darragh Buckley, described by the company as Stripe’s first employee. Buckley has said the business grew out of his early work at Stripe, where he saw demand for banking infrastructure built with the same engineering focus as the financial technology companies using it.

Buckley has now taken over Twin City Bank after acquiring voting shares in the institution last year, according to the company. Increase says the group now comprises Increase Bank and a modern banking core connected directly to the Federal Reserve, The Clearing House and Visa.

What does owning Twin City Bank change for Increase?

Increase says the structure gives fintech clients greater control over accounts and allows them to work with their bank at a pace closer to their own operating speed. In practical terms, the company is combining bank ownership with software that tracks balances, posts transactions and links to major payment and settlement networks.

The company says its technology serves as the system of record for account balances and transaction activity. A system of record is the authoritative ledger that determines what money is in an account and what has happened to it, which makes accuracy and reconciliation central to the product.

Increase also says its platform reconciles to the Federal Reserve in real time. Reconciliation is the process of checking internal records against external settlement records, a function that becomes more demanding as payment volumes rise and customers expect faster posting.

The move places Increase in a segment often described as banking infrastructure or banking-as-a-service, where technology companies provide the account, payments and compliance plumbing that other firms use to offer financial products. The model depends on close coordination between software providers and banks because customer balances, ledger entries and payment network access must line up across systems.

Buckley said the bank is intended for companies with high product and reliability demands. “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,” he said. “It is programmable at scale and designed for reliability, speed, and flexibility.”

The acquisition comes as fintech infrastructure providers continue to seek tighter links with banking partners and payment rails. Increase’s stated approach is to put the bank, the core ledger and direct network connectivity under one operating structure, while continuing to serve companies that build financial products on top of its APIs.

This story draws on original reporting from Finextra Research.