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Anyone who doubts the ability of scrappy start-ups to change the world should take a look at a blockbuster deal confirmed today involving two companies that are household names to millions of Americans.

Charles Schwab, America's biggest online stockbroker, is paying $26bn (£20bn) for TD Ameritrade, the second biggest player, creating a giant with 24 million customers.

The deal has stunned many on Wall Street, who had assumed any takeover activity in the sector would have involved Schwab buying E-Trade, the third largest online broker.

Yet the fact the combination has even been contemplated by the pair highlights the extent to which the industry is changing and the extent to which profitability is being shredded.

The last few years have seen a clutch of fintech companies enter the world of broking and wealth management, such as Betterment, based in New York, and Wealthfront, based in California, both of which are so-called "robo-advisers", providing financial advice and investment management services based largely on algorithms.

Arguably the most successful of these has been Robinhood, based in California, which since its launch just six years ago has attracted six million customers - many of whom are millennials - by offering share dealing on a commission-free basis.

This tactic has eaten into the profitability of the more established players.

Schwab, launched in 1963 as an investment newsletter before later moving into brokerage services, last month responded by cutting commissions on trades from $4.95 to zero.

It was quickly followed by E-Trade, Fidelity Investments, Interactive Brokers and by TD Ameritrade, which was created in a merger 14 years ago between Ameritrade and TD Waterhouse, the broker owned by Canada's Toronto-Dominion Bank.

It is a remarkable and sudden climax to a downward drift in the price of stock trading for so-called "mom and pop" investors that began when, in 1975, the US Congress abolished fixed commissions for buying and selling shares.

Before then, brokerages typically charged hundreds of dollars to execute trades, but it was Schwab which revolutionised things by charging what was then the breathtakingly low sum of $70 a trade. The price has carried on falling since.

The move to zero commissions, however, has made many businesses reappraise how they operate.

Schwab's announcement that it was moving to zero commission wiped a collective $13bn from the stock market valuations of it, TD Ameritrade and E-Trade.

However, although Schwab's decision to cut to zero hit the shares of it and its rivals hard, all three make less money from commissions than they do from lending the securities held in the accounts of their customers (a key way of greasing the wheels of the stock market) or by reinvesting cash sitting in customer accounts, or by lending money to customers using it to buy shares.

They also make money from market-makers, the firms which quote two-way prices at which they will buy or sell a particular security, who will pay the brokers for routing business to them.

This latter practice, which has been banned in Canada and which has for most of the last year been under review in the UK by the Financial Conduct Authority, may become more profitable if zero commissions encourage investors to trade more frequently.

The big question is whether a combination of the two biggest players will attract the attention of US competition watchdogs and the extent to which the latter will demand remedies from the pair to safeguard competition.

And that in turn is likely to depend on whether the regulators assume that Schwab and TD Ameritrade are competing with only other online brokers, such as Robinhood, E-Trade or Fidelity, or whether they also include, in any review of the sector, the big boys of Wall Street like Bank of America, JP Morgan Chase and Morgan Stanley.

They have increasingly been muscling into the sector and have in some cases - such as Bank of America's Merrill Edge platform and JP Morgan Chase's You Invest platform - been offering services that look more distinct from their traditional offerings.

If the deal is allowed through, it is almost certain to spark further consolidation, taking in E-Trade, Interactive Brokers and even Robinhood itself.

It is also likely to lead to an evolution in the kind of services these businesses offer.

One such area where competition could intensify is money management. Historically, the rate of return on cash which sits unused in client accounts has been relatively uncompetitive, but Robinhood recently launched a new account offering a return of just over 2% with the aim of attracting more deposits.

Moreover, with the combined Schwab-TD Ameritrade likely to make vast cost savings - one analyst predicted today that the pair would be able to slash their operating costs by 60% - the enlarged business could offer more attractive terms to customers, assuming they pass on some of those savings.

It was being suggested today that Schwab is particularly attracted to TD Ameritrade because it makes more profit from money lying idle in the accounts of its customers than does the latter.

The other big unknown, other than how regulators react, is how the sector will look during the next big downturn in stock markets.

Most of the main US stock indices are close to all-time highs - both the S&P500 and the Nasdaq hit new record highs today - and so investors are feeling buoyant.

The extent to which trading volumes take a hit when markets come off the boil is unpredictable, especially for the likes of Robinhood, most of whose millennial customers have never experienced a market downturn. How they react could be critical.

Having started off the biggest shake-up in the industry since the 1970s, by offering zero commission trades, it would be ironic indeed were Robinhood - which is shortly to launch in the UK - find itself outcompeted by an industry giant whose merger it helped trigger.