Nearly Half Of FinTechs Now Partner With Credit Unions

According to the PYMNTS Intelligence report “Credit Union Innovation Readiness: How FinTechs Are Shifting Their Partnership Strategies,” a Velera collaboration, half of FinTechs sell to credit unions, and 42% of them say they encounter no real obstacles, even as non-sellers point to compliance and product fit concerns.

That gap between perception and reality runs through PYMNTS Intelligence’s survey of 100 FinTech executives in the United States whose firms serve banks, credit unions and individual consumers.

The report finds that 48% of FinTechs that distribute end-user products via partners now work with credit unions, up from 40% in 2024, a 19% increase. However, just 16% of FinTechs do so with national banks, a 56% year-over-year drop. Large institutions with deep pockets are increasingly building in-house, nudging FinTechs toward member-owned lenders and platform businesses.

• Among FinTechs that already sell to credit unions, 42% report no impediments at all. Among the remainder, the challenge FinTechs encounter most often is credit unions’ slow decision-making processes, at 38%, followed by complex rules and regulations, at 34%.
• • Among FinTechs that do not sell to credit unions, the biggest reason cited is not having products and services that credit unions like, at 20%, followed by compliance and regulatory burden, at 18%, and long implementation timelines, at 12%.
• • FinTechs that sell to credit unions are more than twice as likely as peers to frame their edge as helping financial institutions compete, 34% versus 14%, suggesting the strongest pitch is strategic, not technical.

Convenience Helps Drive Demand

Other findings map where attention and budgets are moving. FinTechs say end-user safety and convenience drive demand. Artificial intelligence-operated customer support chat leads at 38%, with call center or customer service tools at 30%.

Security features are next. Card transaction management and alerts lead at 31%, followed by biometric authentication or digital identity at 26%, as well as loyalty and rewards at 26%. Partnerships are also broadening beyond financial institutions, as 80% of FinTechs now work with software platforms, up 24% from 2024, and 73% partner with merchants or marketplaces, up 17%.

The takeaway for vendors is less about inventing a breakthrough than about being regulation-ready and packaging existing capabilities, like fraud controls, authentication, alerts and customer support, so they map to credit unions’ governance and decision cadence.

Framed that way, the data suggests FinTechs should emphasize measurable competitiveness gains for the institution, demonstrate how compliance is embedded, and price solutions for constrained budgets without skimping on risk controls. The report’s figures also suggest partnership appetite on the other side, as credit unions want embedded tools that upgrade member experience without entirely overhauling core systems.