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Future of FinTech | Edition #25 – June 2022
Tuesday Blues? We might have a solution – a new steaming cup of the Future of FinTech newsletter just for you! We've compiled a roundup of FinTech happenings from around the world. Read on to learn about the latest in FinTech across six dynamic themes and be one of the first to get our Fresh Weekly FinTech Brew served straight to your inbox every Tuesday! ☕️
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Music To The Ears: Striking the right note, the world’s renowned electronic music producer Deadmau5 is partnering with US-based FinTech Zytara to bring a one-of-a-kind, branded digital banking experience for its fans and 45 million merchants worldwide. It seems even the music industry is beating the drum for FinTech!
Edition #25 observed numerous partnerships across all segments, along with a bunch of new product launches, adding to the ever-evolving ecosystem of financial offerings available to consumers.
Here’s the TL;DR:
As BNPL continues to witness growing interest from startups and established companies alike, many players are joining in on the increasingly crowded market. Revolut is the latest entrant in the competitive space, having introduced its Pay Later service. Fellow BNPL firm Klarna isn’t far behind – as it launched a new loyalty card feature that supports loyalty rewards programs worldwide.
Many ecosystem participants have been zeroing in on easing financial processes for businesses as of late – with Stripe rolling out bank transfer solutions for businesses in the UK and EU and PayPal upgrading B2B payments tech for business accounts.
And that’s not all – financial providers are also taking responsibility for credit education, with TransUnion and Lloyds Bank empowering customers to look after their credit health, and Experian collaborating with Tillful to help SMEs build credit.
Speaking of zeroing in, Binance US launched a zero-fee Bitcoin trading offer as it seeks to generate positive user sentiment. It isn’t the only one making moves to cater to customers’ demands, as Citi partnered with Metaco to pilot a platform that lets clients store and settle digital assets.
Citi is equally extending its arms into other verticals, having announced a new partnership with ING and Societe Generale to develop a finance framework to decarbonize the aluminum sector. Accelerating access to clean and affordable energy is also an agenda for the OPEC Fund, the UN Capital Development Fund, and Sustainable Energy for All, as the three form a partnership to design and deliver a new Climate Finance and Energy Innovation Hub.
For the longer read, let's get going –
The Open Finance sector was buzzing with attention-grabbing events across numerous activities.
To begin with, Mastercard collaborated with Spire, which provides Open Banking for the Gulf Cooperation Council, to help improve digital banking for the region to integrate Mastercard’s Merchant Identifier solution with Spire’s “Ingage,” an artificial intelligence (AI)-equipped financial well-being platform. Through the integration, the solution will provide real-time merchant data, spread across diverse categories for both customers and banks.
More in partnerships – Codebase Technologies, one of the world’s fastest-growing open API FinTech, announced that it joined Visa Fintech Partner Connect, a program created by Visa to connect the world’s best FinTech providers with Visa clients. Paywallet also announced its selection in Mastercard’s Global Start Path Open Banking program to leverage Mastercard’s Open Banking expertise and market insights. This will help Paywallet uncover opportunities to innovate with Mastercard’s ecosystem to deliver and scale Open Banking solutions designed to meet diverse consumer financial needs. Furthermore, everything payments platform Blink partnered with Open Banking solution Opaay to provide its users with an efficient, secure, and more cost-effective way for processing payments. Businesses using Blink in sectors such as retail, hospitality, property, insurance, or any e-commerce business, can now offer the benefits of bank-to-bank, Open Banking to their clients.
Furthermore, Qatar National Bank announced the launch of Open Banking platform for a wider audience including the bank’s customers, partners, and emerging FinTechs in Qatar. Open Banking pioneer Volt launched Verify, an ultrafast bank account authentication service for online merchants and businesses. The launch was simultaneous in the UK and five key European markets: Ireland, France, The Netherlands, Germany, and Austria. Even GoCardless and Clear Books launched Open Banking-powered payment solutions that can help speed up the payment process and minimize card fees.
In other news, Stripe made its ‘better bank transfers solution’ available to businesses in the UK, Europe, and Mexico. Stripe’s solution is aimed at reducing the friction of bank transfers, including the likes of transfer confirmations, reconciliation, accounting, and refunds. The UK's Payment Systems Regulator made the news for its plans to undertake two market reviews into Visa and Mastercard scheme fees and cross-border interchange charges. The PSR red flags the "high card fees" that merchants pay to Visa and Mastercard, while also looking to remove barriers to the uptake of A2A retail payments, which it says can provide a "credible" alternative to the card schemes. The Financial Data Exchange (FDX) reported that 32 million consumer accounts are now using its FDX API for open finance data sharing, representing an increase of 4 million additional consumer accounts since FDX’s last report in January 2022.
An assortment of FinTech activities brewed the headlines for the Digital Finance segment the past week.
When it comes to the various partnerships, Arab Tunisian Bank went live on Temenos open platform to power new growth opportunities, drive efficiencies at scale, and deliver seamless customer experiences. Third Coast Bancshares, Inc. selected Treasury Prime as its strategic Banking-as-a-Service provider to enable FinTechs and enterprise clients to more quickly and easily embed banking services, including bank accounts, payments, and cards, into their products and service offerings. Turkey-based Akbank was also in the news for improving the way it makes offers to consumers for new credit cards and credit limit increases by leveraging FICO prescriptive analytics. TransUnion joined forces with Lloyds Bank to empower almost one million of the bank’s customers to look after their credit health with free access to their TransUnion credit score via an interactive dashboard. That’s not all – Indian neobank Freo rolled out its FreoSave digital savings account service in partnership with Equitas Small Finance Bank as a way to offer end-to-end financial support.
On the funding front, digital mortgage startup StrideUp raised ~$343M to bring a new shared ownership mortgage product to the UK’s first-time buyers. FinTech startup Vergo similarly hit the headlines for bagging $4.1M in Seed funding to build a financial platform for businesses in the home building and renovation industry, while also scaling up the product and operations team in the US and the engineering team in Mexico.
As for the other events, Revolut jumped the BNPL bandwagon by rolling out its Pay Later BNPL service in Europe which will allow users to spread the cost of online and in-store purchases across three installments. Nubank grabbed headlines for its plans to continue expanding by picking up acquisitions at low prices, looking to maximize on the impending “shakeout” in the area’s FinTech sector. What’s more – HSBC UK launched a ~$307M growth lending fund for high-growth tech businesses in the UK following the government’s calls for more investment in the sector. Starling Bank passed the three million current account milestone, including more than 460,000 small business accounts. Mitek’s MiVIP Verified Identity Platform to make digital access faster and more secure for companies was also one of the key highlights for the digital sphere.
The Embedded Finance space saw a wave of partnerships last week as more industry players are joining forces to create meaningful customer experiences.
Speaking of the partnerships, Finastra made the news for announcing a partnership with ITC Infotech to deliver Finastra’s Fusion Kondor cloud-based Treasury as a Service solution to its growing customer base in Europe. Customers will benefit from increased automation of treasury services, an evergreen system that keeps pace with regulatory change, and rapid time to go-live for new features and functionalities. Embedded working capital platform Fundbox partnered with open API platform Galileo Financial Technologies and financial empowerment company MetaBank, along with appointing a new Chief Product Officer as part of its ongoing effort to accelerate its product roadmap and help bring innovative products to market. BNPL platform Optty hit the headlines for adding Singapore FinTech Pace as part of its plan to integrate numerous companies in the same place and boost their sales and conversions, providing retailers a direct channel to multiple top providers. Splitit also added its installment capabilities to Everyware’s Pay By Text platform, intending to offer a mobile-first BNPL solution with minimal friction. Even digital transformation specialist Amdaris teamed up with Stripe to provide an industry-leading solution for embedded payments that can empower companies to build and scale powerful global payments and financial services more efficiently.
As for the funding rounds, B2B BNPL startup Playter closed a $55M debt and equity round to help SMEs reduce their burn rate by paying for professional services invoices in installments. Solarisbank raised ~$42M from its existing investors, with the intent to raise more money as it’s looking to go public in the future. Hokodo also announced a Series B fundraise of $40M to help fulfill their ambition of enabling businesses to access a better way to pay via a B2B BNPL platform.
In other news, BNPL provider Zip grabbed headlines for its plans related to merchant and consumer fee hikes to help it ride out a tough market environment of soaring inflation, rising interest rates, and tighter regulations. BNPL giant Klarna also launched its new loyalty card feature to allow users to store and access their physical loyalty cards as digital versions, collecting points and benefits at merchants without the need to carry plastic equivalents while shopping in-store. Raisin Bank made a move into the payments business through the acquisition of the payments division of German private bank Bankhaus August Lenz. Through this acquisition, Raisin will be able to offer its partners and their customers electronic payment transactions as well as cash solutions.
The DeFi industry observed a catalog of new product offerings and partnership announcements from the exchanges in an attempt to provide their client with the best services during the current circumstances of the crypto market.
In an interesting situation, Binance US had announced that it’ll offer zero trading fee on Bitcoin trading. This could help the traders get some incentive and a much-needed boost of morale during the current crypto winter. Surging in popularity in recent weeks, Gnox Finance launched its “yield farming as a service” Gnox token that provides an easy solution to new traders who are not familiar with the process of staking or liquidity pools.
Despite the crypto market still battling the harsh winter, digital assets seem to be on the boom as Citi chose Metaco to help it build a platform facility that will help its clients store digital assets. Moreover, Bequant also announced its integration with Fireblocks in an attempt to offer its institutional clients with DeFi access. This integration of Fireblocks with Bequant’s proprietary asset transfer tool could be a game-changer for the functionality of Bequant’s brokerage platform.
In other news, Beam completed its annual hard fork, providing much-needed privacy missing from DeFi-enabled blockchains. The move brings many infrastructure upgrades for the private DeFi (PriFi) ecosystem. Additionally, Uniswap made the bulletin for outperforming its host blockchain Ethereum in terms of fees paid over a seven-day rolling average.. According to data from Crypto Fees, traders on Uniswap accounted for an average daily total of $4.87 million worth of fees surpassing the average fees from Ethereum users which accounted for $4.58 million. As for other events, XCarnival, an Ethereum-based protocol that acts as a lending aggregator for NFTs, was exploited with a $3.8M hack. XCarnival team proposed an offer of 1500 ETH to persuade the hacker to return the funds, on which the hacker accepted the offer and returned half the funds worth $1.9M. Voyager Digital also slashed the withdrawal amount limit amid the headlines of a loan worth $655M to Three Arrow Capital (3AC) surfaced. Since (3AC) failed to meet its financial obligations, Voyager intends to pursue recovery from 3AC and is in discussions with the company's advisors regarding the legal remedies available.
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The Platform Finance space witnessed a variety of eye-catching affairs last week.
On the partnerships front, Aerotruth signed LuLu Financial Holdings and Samsara Remit as marquee clients for its proprietary online platform created to simplify and streamline the partner B2B onboarding process for FinTechs, banks, and other financial institutions. Tillful formed a partnership with Experian to help small firms build stronger credit. The move allows Tillful’s users to connect their accounts directly to Experian's business credit reporting system and enabling the bureau to integrate real-time cash flow data into its reports to provide a more accurate understanding of borrower eligibility. FinTech Nuula joined hands with Even Financial to provide a business loan search tool to small business owners, having them compare more than 30 lenders’ offerings to find the most appropriate personal loans they can use to finance their companies. Meanwhile, Bloomberg, MarketAxess, and Tradeweb Markets formed a joint venture to become a consolidated tape provider for European fixed income markets.
Furthermore, global payroll provider Papaya Global acquired Azimo to expand the range of products and services it provides and to be able to deliver global payments in hours rather than days. Speaking of acquisitions, Pine Labs acquired Setu to harness the API integration prowess of the latter.
Parallelly, Wirex launched a variety of features for new and existing customers in the UK. New users will be able to order Wirex’s Mastercard debit card, allowing holders to seamlessly spend a variety of currencies at over 81 million locations worldwide. Existing users on the other hand will have access to increased daily top-up and spending limits, exclusive OTC exchange rates, and zero fees on FX and transfers to contacts. PayPal announced an upgrade to its B2B payments tech, enabling business accounts to receive payments by eliminating the long-standing “Friends & Family” option for business payments – meaning customers will only be able to send these types of payments for goods and services from consumer PayPal accounts.
In other news, Canadian bank TD made the list for its plans to open-source its Equity Resource Hub, a digital platform that helps integrate diversity, equity, and inclusion into all stages of product and service design. US startup Kasheesh also launched a free digital platform that lets users split payments for online purchases across multiple credit, debit, and gift cards, while also working with Stripe and Plaid to verify each user’s proof of identity and funds for security purposes.
While the focus on environmental impact becomes a priority for conscious consumers, the Green Finance space continues to flourish.
Beginning with the spotlight on the various funding rounds, ESG Book closed $35M in a Series B funding to advance ESG Book’s next-generation technology capabilities, enabling clients to meet increasingly complex sustainability requirements, and accelerate the company’s expansion. Banyan, an investment facilitator for sustainable infrastructure, raised $8.2M in Series A funding, valuing the company at $47M. Brookfield Asset Management raised $15B at the final close of its inaugural net zero-focused impact fund, Brookfield Global Transition Fund, focusing on greenhouse gas (GHG) emissions, energy consumption reduction, low carbon energy capacity growth, and sustainable solutions. Additionally, The Development Bank Of Japan (DBJ) stole headlines for its plans to spend about $40B for sustainable purposes, all the while scrutinizing the use of funds to ensure companies aren't greenwashing.
On the various partnerships, global banks Citi, ING, and Societe Generale announced a partnership with RMI’s Center for Climate-Aligned Finance to decarbonize the aluminum sector through the formation of a new Aluminium Climate-Aligned Finance Working Group. Oaktree Capital Management joined the Partnership for Carbon Accounting Financials (PCAF) to measure and disclose the greenhouse gas (GHG) emissions of its portfolios. The OPEC Fund for International Development partnered with the UN Capital Development Fund (UNCDF) and Sustainable Energy for All (SEforALL) to design and deliver a new Climate Finance and Energy Innovation Hub. Furthermore, Previsico and Zurich Municipal partnered to boost flood risk resilience across the public sector, providing Zurich Municipal’s customers with a surface water flood warning system free of charge. Sustainable infrastructure company Generate Capital announced a $500M strategic growth investment in utility-scale solar and storage renewable energy developer Pine Gate Renewables.
As for the product launches, FinTech startup Single.Earth launched a digital currency called Merit which rewards landowners for protecting their forests. Forest owners whose forests have been intact for 20 years will start receiving Merits for every 100kg of CO2 sequestered in their forests. The UK government’s Department for Works and Pensions (DWP) announced the launch of “Green Nudge”, a new three-week trial aimed at encouraging pension savers to make green investment choices and increase engagement on the sustainability of pension investments. Kiko Ventures launched a $450M fund to invest in climate tech and regenerative technologies. The UK Infrastructure Bank was also in the news for its plans to tackle climate change and boost regional growth, making clean energy the largest sector for investment.
In other news, Polygon announced that its network reached carbon neutrality and is on its road to becoming carbon negative by permanently retiring $400,000 in carbon credits to offset 104,794 tonnes of greenhouse gases emitted since the inception of its blockchain. Towards implementing a new sustainability reporting system in Europe, the EU Council and European Parliament announced that they reached an agreement on the rules of the Corporate Sustainability Reporting Directive (CSRD) – which require companies to have their reported sustainability information independently audited, and will also apply to some large non-EU companies. Bank of America (BofA) similarly announced an agreement with clean energy company Constellation for the purchase of solar power and project-specific renewable energy certificates from a new US-based solar project.
Some other happenings in the FinTech universe 🪐
Bringing you the additive of additional highlights from beyond the six segments that made up for some hot-off-the-press headlines for the week –
Uganda-based FinTech startup Xeno raised $2M seed,
FinTech infrastructure firm Prime Trust raised $107M in Series B funding,
UK FinTech SumUp secured $620M in funding,
Earned wage access platform Tapcheck announced a $20M Series A, and
Autobooks secured $50M Series C led by Macquarie Capital Principal Finance.
And that's a wrap 👋
We hope you enjoyed this edition of the Weekly FinTech Brew, and we'll be back with more next week!
If you're hungry for more FinTech insights, check out some of our other work at WhiteSight.
Our latest publications include exploring how The Future of Financial Services Will Run on Open Rails and Unearthing The Bustle In Green Finance: Earth Day 2022.
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