The world of fintech is feeling the heat from a new wave of tariffs introduced by U.S. President Donald Trump. These tariffs, which apply a new 10% baseline on goods from all economies, have shaken global markets and raised alarms about rising prices, shrinking consumer demand, and the risk of a global recession. And while traditional banks may have the cushion of a diverse client base, fintech companies—leaner and more consumer-focused—are especially exposed to the ripple effects of this economic uncertainty.

Companies like Affirm, Robinhood, and SoFi are already seeing their stock prices tumble. Since the announcement of the global trade war on April 2, shares in Affirm have dropped more than 21%, Robinhood is down over 17%, and SoFi has seen a decline of nearly 20%. These steep losses reflect growing fears that consumers, the lifeblood of fintech, might cut back on spending and struggle with debt repayment as tariffs push prices higher.

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Traditional Banks And Economic Decline

Unlike traditional banks, which often cater to a wide range of clients, including large corporations and governments, fintech firms tend to focus on average consumers, especially those more likely to feel the pain first when the economy slows down. That’s why economic shocks like these can hit fintechs harder. As James Ulan, director of research for emerging technology at PitchBook, points out, a recession tends to hit mass-market consumer businesses—like fintechs—more than other sectors, because lower-income consumers are usually the first to pull back on spending.

Affirm and SoFi, which offer credit and lending services, now face a pressing question: will their customers still be able to repay loans in an economy where goods cost more and paychecks don’t stretch as far? Affirm recently reported that 2.5% of its monthly loans were more than 30 days overdue as of December 31—a small rise from the previous year, which the company linked to pricing changes. SoFi, on the other hand, reported that only 0.55% of its personal loans were over 90 days late. To put that in perspective, traditional banks saw 2.75% of their consumer loans go 30 days overdue during the same period, according to data from the Federal Reserve.

Still, there’s some optimism from within the industry. A spokesperson from Affirm emphasized that the demand for transparent and honest financial products is a long-term trend that remains strong, even during market ups and downs. In fact, Affirm believes that its products may actually become more appealing in times of uncertainty, offering stability to both shoppers and merchants. Robinhood declined to comment, and SoFi has yet to respond.

As the effects of tariffs continue to ripple through the economy, fintech companies will be watching closely—and so should their customers and investors. In a sector built on consumer confidence and spending, even a small change in financial behavior can make a big difference.

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