This Week in Fintech (10/11)

This Week in Fintech (10/11)

Hello Fintech Friends,

Bob Dylan once opined “the times they are a changin,” and while he was allegedly not referring to fintech, you could be forgiven for thinking so after another exciting week of news below.

As always, please feel free to forward.

Quote of the week

“We need banking but we don’t need banks anymore. Do you think someday we can open a bank account or ask for a loan without physically have to come to the bank?”
Bill Gates, 1994

In banking and credit card news, Citi this week is launching a co-branded credit card with South East Asian e-commerce firm Lazada, as part of its expansion strategy to grow its consumer banking customer base in the region by 2 million cardholders over the next few years. Co-branded cards are ways for retailers (and sports teams, airlines, universities, etc.) to drive customer loyalty while providing them with offers such as discounts. (More detail here.)

HSBC forecasts that it will cut 10k jobs in the near future. We’ve seen this trend at other retail and investment banks, which have announced 60k+ job cuts so far this year. (For perspective, the 10k is out of HSBC’s global workforce of 238k.) While there are many pundit explanations for the cuts, the likely culprits are a combination of individual bank performance and re-org (Deutsche), increased automation, conservative bottom-line practices ahead of an expected economic slowdown, and routine cost-cutting exercises.

UK bank NatWest is entering into a three-month trial of biometric fingerprint credit cards with 150 customers. The cards offer contactless payments using fingerprint ID verification for transactions up to £100. Meanwhile, UK challenger bank Metro Bank is entering into partnerships with fintechs to boost its small business product offerings in financing, account opening, and financial advice. And Barclay’s has been slammed by consumers and regulators for ending a program that allowed customers to withdraw cash at UK post offices.

Joint Scandinavian bank project P27 announced it’s working with six Nordic banks this week to create the first cross-border real-time payments platform for domestic and international money transfers. (In the US, similar efforts are being undertaken by fintech Venmo, bank consortium EWS (the operator of Zelle), and most recently the US Federal Reserve.) Relatedly, Samsung Pay this week announces international money transfers and a virtual debit card for US users, Finastra teams up with Ripple for cross-border payments, and Norway's largest bank, DNB, is launching a new mobile app powered by open banking platform Nordic API Gateway.

Airtel Africa has struck an innovative new partnership with MasterCard, giving 100 million Airtel customers a virtual card that will let them pay at any online merchants who accept Mastercard, even without a bank account. (As an ‘emerging markets fintech’ nerd, this excites me.)

Brazilian bank BMG plans to raise up to $395 million in an IPO, which it had postponed after presidential elections in 2018.

And finally, in continued easing of Dodd-Frank era, post-financial crisis banking regulations, the Fed is expected to ease liquidity and capital rules on US banks this week.

In fintech news this week, Tear Sheet has launched an ambitious Fintech Toolkit, meant to catalog all the tools and tech that are needed to build financial apps in one place.

PayPal is quitting Facebook's Libra project with Visa and Mastercard potentially following suit. The surprising reversal comes as the consortium and stablecoin draw increased regulatory scrutiny over data use practices and monetary sovereignty.

Robinhood is joining the high-APY savings account fray (once again), launching Cash Management, an account that will earn a 2.05% APY on uninvested cash in its brokerage accounts. (And breaking with the many brokerages who earn much of their revenue through net interest income on uninvested cash.) Credit-building platform Credit Karma also announces a 2.03% APY savings account this week, bringing the number of fintechs offering high-APY accounts well into the double-digits.

Intuit and Visa are launching an instant deposit feature, using Visa's real-time push payments technology. This will allow small businesses to deposit funds from their Quickbooks receivables accounts directly into their bank accounts in real-time.

Upgrade this week launches an installment loan card for consumer credit. And Affirm debuts an app to provide one-use virtual cards so that customers can finance their purchases with any online merchant.

Kaspi, a Kazakh online payments platform, filed for an IPO at a $5 billion valuation less than a month ago but is now postponing the plan citing "unfavourable and uncertain market conditions".

Robinhood revamps its newsfeed (from the acquired MarketSnacks) with Wall Street Journal articles and ad-free videos.

And last but not least, Monzo is rolling out an in-person beta trial program across the US.

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Financings

M&A

  • C2FO, the Kansas City business receivables financing marketplace, acquires Priority Vendor, an Indian early-payment platform. Financial terms were not disclosed.

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Deeper Reads

There are a lot of great deep reads this week. The top three -- on fees in fintech, major trends, and product expansion -- are particularly interesting.

Fintech Price War -- Goldman's $1.3B Marcus burn, Neobank £200MM loss, ETrade's $75MM trading fees; plus 14 short takes on top developments.

A Guide to What’s Happening in the Fintech Revolution (with great charts)

The start of the midgame for fintech companies.

After years of rapid growth in Africa we’re about to enter the age of Mobile Money 2.0.

A $40 Billion Pile of Leveraged Loans Is Battered by Big Losses.

As part of Stripe’s environmental program, starting this year, we are committing to pay, at any available price, for the direct removal of carbon dioxide from the atmosphere and its sequestration in secure, long-term storage.”

Alternative lenders continue to steal business from banks.

New York three-year old wins ‘commuter of the week’ with positive daily affirmations on his way to school.