Fintech M&A reopens around payments infrastructure, not consumer apps

NEW YORK — The first fintech boom sold brands. The second is buying licenses, settlement connectivity, and the unglamorous right to sit on a payment rail. Bank and processor acquirers said they will pay for infrastructure and they will not pay for a growth story that is mostly customer-acquisition cost.

That preference is already visible in the deals that clear. Targets with bank charters, money-transmitter coverage, or issuer-processor contracts are in process. Wallet apps with a celebrity seed round are not.

For venture backers, this is a sorting. The companies that became utilities will exit. The companies that became advertisements will raise at a discount or not at all.