Increase Bank Launches — Stripe's First Employee Collapses Three-Layer BaaS Structure

Summary

Darragh Buckley, Stripe's first employee and founder of Increase, has officially launched Increase Bank — an FDIC-member institution created by acquiring and rebuilding Twin City Bank of Longview, Washington. The launch collapses the traditional three-layer banking-as-a-service (BaaS) structure that has defined fintech infrastructure for a decade, eliminating the middleware ledger divergence that caused the Synapse disaster.

Increase Bank is not a consumer-facing bank. It is an API-first bank designed for technology companies building payment, banking, and embedded finance products. The bank maintains direct connections to FedACH, Fedwire, Check 21, The Clearing House's Real-Time Payments network, FedNow, and Visa — all through a single regulated entity.

Key Facts

Increase founder Darragh Buckley was Stripe's first employee; founded Increase in 2020
Acquired Twin City Bank ($70M assets) via its holding company in April 2025; FDIC non-objection received
Twin City Bank's assets grew 48% to $114.5M in the year after acquisition
Increase Bank has one physical branch in Longview, Washington (operating as Twin City Bank)
Increase processes hundreds of billions of dollars annually across ACH, wires, RTP, FedNow, checks, and cards
Monthly payment volume tripled year over year
Increase became profitable in 2025, remains self-funded
Existing clients include Gusto, Ramp, and Stripe
Increase gained its own Federal Reserve master account through the acquisition
Technology maintains the system of record and reconciles to the Federal Reserve in real time
No middleware ledger that can diverge from the bank's records — one entity, one record

Why It Matters

Increase Bank represents the most concrete architectural response to the BaaS regulatory crisis triggered by the Synapse collapse. The three-layer model (fintech + middleware + sponsor bank) created a structural seam where ledgers could diverge with no authoritative single record. By owning the charter and the technology under one roof, Increase eliminates that seam entirely.

The launch also signals a broader trend: fintech infrastructure providers are increasingly pursuing vertical integration through bank charter acquisition. Column (William Hockey of Plaid) took the same approach with Northern California National Bank. The question the market will answer is whether the credibility advantage of owning a charter outweighs the regulatory constraints it imposes.

Summary

Key Facts

Why It Matters

Sources