Today's newsletter brought to you by our friends at Finley.

Hello Fintech Friends,

Will this be the year that pay-by-bank finally becomes a thing?

Many, many fintechs have been designing and promoting direct account-to-account bank payments as a replacement for cards in the half decade since Open Banking became established in the US and EU. But pay-by-bank has always suffered principal-agent incentive mismatches:

• For merchants, the value is clear: pay lower transaction fees on sales;
• For networks, the value is mixed: reduce the complexity of fraud, auth, and disputes, but take no interchange as a result (if networks decide to support A2A – if not, they’ll be cut out entirely);
• For issuers, the value is mixed as well: reduce your dispute and chargeback costs, but collect no interchange fee split (and customers will still dispute fraudulent purchases, even if they bear the liability);
• For customers, it’s not clear that there is much value to pay-by-bank. Why have money debited from my account instantly when I can wait to pay it down monthly? Why pay with a product that doesn’t give me rewards? Why bear the liability for disputes, returns, and fraud? Why go through a clunky bank login flow whenever I want to buy something?

And ultimately, it’s the customers that select the payment method.

For pay-by-bank to really work as a product in 2024, it has to provide a seamless user experience (no need for an in-the-moment bank login at the point-of-sale), strong security (my credentials won’t get stolen), better liability (I’m not on the hook for fraudulent purchases), intuitive error messaging (ie: low balance), potential for overdraft payments without penalties (dare I say - credit?), and – most importantly – rewards that compensate me for not using my credit card.

Hosted checkouts like Stripe Link are a step in the right direction, but it remains to see whether A2A apps will be able to pry credit cards from their users.

And speaking of Stripe.. we have so, so much fintech news to share this week. Stripe Sessions took place in San Francisco, including a raft of new announcements from the company (below), along with fintech announcements from Visa, Google, Airwallex, Revolut, Monzo, Block, Apple, One, Uniswap, and more.

Please enjoy another week of fintech and banking news below! (👍👎 Have feedback for us? Let us know!)

Raising debt capital is a crucial requirement for card, lending, and neobank startups, but most fintech operators don’t come from a capital markets background. That’s why Finley and Cross River Bank put together this comprehensive guide to raising debt capital. It outlines the people, processes, and partners you need to assemble to execute a debt capital raise. Download your free copy here.

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💼 Fintech Job of the Week

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🏦 Financial Services & Banking

🚀 Product Launches

Italy's UniCredit is rolling out debit, credit and pre-paid cards with features designed by Mastercard for blind and partially sighted-people.

Mastercard launched a virtual card app to simplify travel and business expenses for commercial clients, signing HSBC Australia and Westpac as its first customers. The card network also added new features to its Engage and Fintech Express programs and is tackling the growing threat of scams through the launch of an AI-based product suite and several cross-industry partnerships.

Blackrock is forming a joint venture with India's Jio Financial to set up a wealth management and broking business in India, while the firm's bitcoin fund accounted for 20% of the firm's Q1 ETF net inflows, making it the fastest-growing ETF in history.

📰 Other News

The New York Stock Exchange is polling users about opening 24/7 trading.

Visa disclosed in earnings that it added over 100 million credentials from September to December 2023 (!) and partnered with Standard Chartered to enable faster account-to-account cross-border payments for corporate clients.

The Bank of London is using Gen AI to speed up coding for companies testing embedded banking applications via the transaction bank's API suite.

The European Central Bank is ready to impose sanctions on Italy’s UniCredit for continuing to do business with Russia.

India's central bank barred Kotak Mahindra Bank from taking on any new customers through its online and mobile bank.

The Central Bank of Mauritania and the Reserve Bank of New Zealand are both working on their own bank-backed digital currencies. Zimbabwe's new gold-backed currency, the ZiG, is sliding in value on the black market. Many central banks are partnering together to explore cross-border payment tokenization.

The US is working on a bill to provide a regulatory framework for services that offer workers access to their paychecks before payday.

💻 Fintech

🚀 Product Launches

Walmart's proprietary fintech One, which is partnered with buy-now-pay-later provider Affirm, also launched its own BNPL loans in the company's 4,600 US stores, as it plans to push further into lending.

StreetBeat (a TWIF partner) launched its Tuition Rewards Program, in which subscribers can earn points that directly translate into substantial tuition savings via investing on the platform.

Revolut is getting into targeted advertising in its app.

Stripe is getting back into crypto payments for the first time since 2018, adding support for USDC on Solana, Ethereum and Polygon.

Oracle Cloud launched new tools to help banks manage portfolio climate risks.

Google Wallet will launch in India as a payment method aggregator, but will not replace Google Pay.

Card-linked instalment payments platform Splitit launched FI-PayLater to enable banks and card issuers to offer buy-now-pay-later loans.

Forge, the operator of a marketplace for trading in private companies, launched in Europe with the support of Deutsche Börse.

LendAPI partnered with Prove to launch a 3-click identity verification process:

Raising debt capital is a crucial requirement for card, lending, and neobank startups, but most fintech operators don’t come from a capital markets background. That’s why Finley and Cross River Bank put together this comprehensive guide to raising debt capital. It outlines the people, processes, and partners you need to assemble to execute a debt capital raise. Download your free copy here.

Want to sponsor a newsletter? See our sponsorship information here.

📰 Other News

Bucking the trend of fintech layoffs, neobank Revolut plans to grow its 10,000-person team by 40% in 2024.

Estonian neobank LHV Bank reported an after-tax profit of £6.4 million in its first year, after launching personal savings products with Raisin and Flagstone and small business loans after taking over the loan book of Bank North.

UK small business neobank Allica Bank reported its first full-year profit of £16.1 million (on revenues of £191 million) just three years after opening.

Earned wage access provider Brigit announced that it hit $100 million in revenue and reached profitability in 2023.

Visa-owned European open banking aggregator Tink announced its move into the US market, starting with customers Dwolla and MaxRewards. Cross-border business payments provider Airwallex also expanded its payment acceptance capabilities to the US.

Stripe is de-coupling its payments products from the rest of its fintech product suite, meaning that customers will no longer be required to process payments via Stripe in order to access the rest of its services.

Block will now let Square merchants convert a part of their daily sales to bitcoin.

....and despite receiving a Wells Notice, digital asset platform Uniswap's volumes surpassed $2 trillion in total trading, with $3 billion in daily trading volumes.

It looks as though Apple's tap-to-pay technology will open to third-party developers in Europe beginning next month.

Monzo is getting new customers to sign up for its premium accounts using free sausage rolls and discounted train travel. 🌭

Aspiration is spinning out its consumer financial banking product into a new provider of climate-friendly financial services.

This Week in Fintech: Fintech Happy Hour in Mexico City 🇲🇽 · Luma

Who: Our Latam Fintech Founders, Operators, & Investors Community What: Fintech Happy Hour Where: Haab Project Condesa When: Tuesday, April 30th, 2024 Why:…

This Week in Fintech

🤝 Partnership Corner

Klarna and Uber announced a global partnership, and Forage and Uber Eats partnered to offer online purchasing and delivery of groceries to SNAP EBT recipients.

Till Financial, a family banking platform for kids and teens, partnered with EF Explore America, an educational travel company within the United States, to service international trips with their cashless payments solutions.

Core provider DCI partnered with fraud and risk platform DataVisor on new fraud protection tools.

Berlin Fintech Happy Hour · Luma

Who: Our Berlin Fintech Founders, Operators, Partners and Ecosystem Community What: Fintech Happy Hour with light bites Where: Mr. Susan Cocktail Bar When: May…

This Week in Fintech

👎 The Bad News

Monese, a UK consumer fintech that targets customers underserved by mainstream banks, is working with advisors on plans to split itself into separate consumer-facing and corporate businesses – or potentially shut down, amid mounting losses – after raising at a £1 billion valuation in 2020. The company has 2 million customers in 30+ countries.

Apex Crypto, the digital currency exchange platform that Bakkt acquired from Apex Fintech in 2022, is on track pay out at most $88 million if it hits all its financial targets – less than half of the platform's $200 million purchase price.

Bambu, a Singaporean embedded roboadvisor, shut down after missing profit targets.

Fundid, a business-building credit card and grant-matching tool for women-owned businesses, shut down.

Status Money, a millennial and gen z focused financial management app, closed down and transitioned its customers to Quicken Simplifi.

MarketForce wound down its African B2B e-commerce arm and partnered with Chpter, a social commerce spinout, to build a conversational commerce platform.

A new suit from investor Activant Capital alleges that ousted Bolt founder Ryan Breslow architected the company's share buyback offer in order to retain control of the company.

GOP lawmakers in the US are demanding that Funding Circle's SBA 7(a) loan license be revoked.

Investor FTV and banking-as-a-service provider Solid settled their lawsuit, with Solid repuchasing around 25 million shares at $1.04 (vs. a Series B share price of $2.40).

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