This Week in Fintech (12/13)

This Week in Fintech (12/13)

Hello Fintech Friends,

The year may be coming to a close, but fintech holiday calendars are no less busy! See below for all the latest news.

Quote of the week

“The arrival of true autonomous finance will be the companies that provide the connective tissue between [...] competing needs, automatically monitoring and adjusting your financial roadmap over the course of your lifetime.”
- Angela Strange, the ‘Google Maps’ for Money (source)

Read of the week

In Beyond the fintech hype, Quartz digs deep to analyze the ten of the top fintech companies, understand why investors are backing them, and predict what changes they portend for financial services.

In banking and credit card news, in a status commoditization sign of the times, just about every credit card is now a metal card.

Visa announced a partnership with MFS Africa, the largest digital payments hub on the continent, to work on cross-border remittances and e-commerce. Mastercard, meanwhile, continues to invest in digital identity tools to bring unbanked consumers across Africa onto the financial grid.

Mastercard is also expanding its partnership with the Swedish fintech Doconomy to give cardholders carbon footprint tracking based on their purchases and enable cardholders to offset CO2 consumption. In its push to improve digital identity tools, the card network is also partnering with an Australian university to provide identity verification for online exams and student registration.

Goldman Sachs continues to aggressively expand its consumer banking products, with a plan to launch robo-advisor for clients to invest as little as $5,000 (built by the United Capital team it acquired in May; its Marcus bank was re-orged this year under Wealth Management).

HSBC is raising its overdraft rates to a single rate of 40% - as much as quadrupling the overdraft rates that it charges to some customers.

UK neobank Metro Bank has partnered with Canadian fintech firm Sensibill to allow some business users to capture receipts with their phone cameras and automatically append them to transactions. French online bank Orange Bank partnered with German fintech Wirecard to offer Google Pay to all its Android customers.

Fintech platform services provider OnDot is promoting a new white-label application that aims to enable consumer banks and credit unions to “deliver an Apple Card-like experience for its existing credit and debit card portfolios, including instant card signup, wallet provisioning, spending insights and easy self-service.”

Morgan Stanley will eliminate 1,500 jobs in year-end staff cuts as mega-banks continue to consolidate and downsize. Barclays, meanwhile, will be investing more in its offshore Pune campus, with plans to hire 9,000 employees in the new location.

Brick-and-mortar retailers are starting to push back against the high fees charged by premium credit cards, which take a cut out of profits.

Megabank BBVA is working with search tech company Yext to try to make its site search more like Google’s.

The Apple Card is now reportedly beginning to show up on consumer credit bureau reports in the US, and has also lowered its APR range. The card will also now offer users an interest-free installment plan for iPhone purchases and 6% back on Apple holiday purchases.

Citibank and Singaporean e-commerce site Lazada unveiled their new co-branded card in Singapore on Monday.

And in regulatory news, the EU warned Facebook that no international digital currencies would be allowed to operate in the EU without regulatory approval, and presidential candidate Sen. Liz Warren proposed new oversight rules for bank mergers.

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In fintech news this week, in the competition to win consumers to online brokerages, Robinhood is the latest platform to allow fractional share trading for investors, following Charles Schwab and Square. It will now allow users to invest as little as $0.01 in any stock, by holding the shares independently on the back-end.

A few interesting thoughts from the investor who sourced the Honey deal for Citi Ventures, on the prospects and growth of the company and the Paypal acquisition.

Russian banking and fintech app Tinkoff is following in the footsteps of the WeChats and Gojeks of the world, building a ‘super app’ that combines its consumer fintech with new lifestyle features and a third-party developer API and marketplace.

UK neobank Starling Bank announced its partnership with legal services provider Sparqa, to offer its own clients legal services through its marketplace. UK open banking fintech platform Token.io spun off a de-novo company called M10 Networks to build clients new digital money solutions.

Danish neobank Lunar released its new stock trading feature, to allow international trading, in partnership with Saxo Bank. In Japan, Softbank Group launched a digital wallet that will hold both fiat and crypto currencies.

Brex raised an additional $200 million in lending capital via its newest debt facility from Credit Suisse.

Fintechs Plaid and Kabbage this week came out with a great op-ed about the future of open banking in the US and how to preserve innovation in the fintech ecosystem.

Here are some interesting stats on Ant Financial’s Chinese micro-lending product, Huabei, which has grown prodigiously.

Fintechs Ocrolus and Kapitus announced a partnership to leverage AI to enable lenders to process applications more efficiently.

Not fintech per se, but in the realm of financial innovation, the SEC has interestingly rejected the New York Stock Exchange’s proposal to allow more direct listings like Slack’s and Spotify’s. To be determined what implications this has for non-IPO listings.

In an attempt to thwart the innovators’ dilemma, corporate venture deals have grown 500% since 2014 as banks continue to invest in fintechs.

And one-third of millennials in the UK say that their primary bank is a neobank.

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Financings

  • Residential real-estate financing startup Hometap raised $100 million in new funding to let homeowners access their home equity without taking on debt.
  • Mexican neobank Albo raised a $19 million Series A to become the biggest challenger bank in the country.
  • Romanian and UK white-label neobank-as-a-service platform raised a $14 million Series A to continue expanding across Europe, and move into southeast Asia and the US.
  • LA-based algorithmic lender to Latino businesses Camino Financial raised $8 million in Series A funding to build more AI lending tools.
  • Portify, which provides credit to UK gig economy workers, raised a £7 million Series A.
  • Canadian Merchant revenue recovery fintech FlexPay closed $6m in new funding to grow its product.
  • Tribal Credit, a SMB corporate card similar to Brex for emerging markets startups, raised a $5.5 million seed round.

Exits and M&A

  • The Postal Savings Bank of China IPO in Shanghai and Shenzhen raised $4 billion but shares only rose 2%.
  • The Brazilian brokerage and wealth management platform XP raised $2 billion in its Nasdaq IPO, jumping almost 30% in its first day of trading.
  • Private equity firm Motive Partners bought a 60% stake in Fiserv’s investment services unit for $510 million.
  • Bill.com raised $216 million in its IPO on the New York Stock Exchange.
  • Credit Karma acquired the 5-person startup Haven Money to develop autonomous financial tools for its users.
  • Payoneer, the cross-border payments platform, acquired Optile, a German startup that lets users integrate their payment experiences. Financial terms were not disclosed.
  • Cboe Global Markets entered into an agreement to acquire European equity clearinghouse EuroCCP for around €45 million.
  • Mercer Global Advisors acquired Republic Wealth Advisors, a Texas wealth management firm. Financial terms were not disclosed.

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Deeper Reads

Africa’s fintech boom is creating niche ecosystems to power the industry’s future globally

A guide to the biggest beasts in the fintech unicorn herd

The New Wave of FinTech Lending — 7 Essential Strategies

He Left Goldman to Hunt Fintechs and Now Catches Unicorns

2019 Payments Year in Review | Part I

2019 Payments Year in Review | Part II

Advisers are drowning in fintech choices