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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
The first week of April begins with a resolution in the Sam Bankman-Fried saga as the former FTX founder and infamous crypto entrepreneur receives a sentence of 25 years in prison.
Crypto
Sam Bankman-Fried sentenced to 25 years in prison for its role in the FTX scandal.
FinovateEurope 2024 will have its fair share of local talent demoing live on the Finovate stage on 27 February in London. And while we’re looking forward to the return of FinovateEurope 2023 Best of Show winner NayaOne, we’re also excited to meet a whole bunch of U.K.-based fintechs that are making their Finovate debuts:
FinovateEurope 2024 will also feature one of our most geographically diverse lineups to date. Companies from 15 different countries plus the U.K. will be on hand in just a few weeks to demo their latest fintech innovations at our annual European fintech conference.
See for yourself! Here’s a look at the range of countries our demoing companies are coming from:
A newly announced partnership between institutional payment orchestration platform Paydock and Australia’s Commonwealth Bank (CBA) will give merchants in Australia the ability to offer their customers a range of new payment options. This new flexibility comes courtesy of PowerBoard, which provides a dynamic payments experience to customers via API, without requiring businesses to make major changes to their existing payments infrastructure.
“Our partnership with CommBank sets a global precedent for financial institutions,” Paydock CEO and founder Rob Lincolne said. “It shows not only how banks can bring flexible payment strategies to customers in record time with payments orchestration, but also it establishes a new paradigm whereby banks can become more competitive and deliver more value by working with fintech players.”
PowerBoard will make it easier for CBA to deploy the latest payment methods, types, providers, and processors to merchants. CBA General Manager of Merchant Solutions Karen Last noted growing customer interest in new payment options. In a statement, she highlighted alternatives such as account-to-account payments, digital wallets, and Buy Now Pay Later as reasons to pursue the partnership with Paydock.
“PowerBoard makes it significantly easier for Australian merchants to offer choice to customers and manage their payments ecosystems, without all the costly integrations,” Last said.
Headquartered in London, Paydock also maintains an office in Sydney, Australia. The company has raised $31.8 million (£25 million) in funding according to Crunchbase. This capital came in the form of a Series A investment in May that was led by IAG Silverstripe.
Commonwealth Bank of Australia is one of the top 50 banks in the world. Founded in 1911, CBA became a fully private bank in 1996. The institution is part of the “big four” of Australian banks, along with the National Australia Bank (NAB), ANZ, and Westpac. CBA had total assets of 1.2 trillion AUD as of 2022.
Speaking of Commonwealth Bank, the institution also announced this week that Bendigo Bank and fraud monitoring firm Satoriwill pilot CBA’s NameCheck technology. Launched this spring, NameCheck is built to prevent scams and mistaken payments. According to the bank, the solution has prevented more than 10,000 scam payments and reduced mistaken payments by more than $100 million, to date.
“With scams and fraud costing Australians and businesses billions of dollars annually, it’s clear a whole of ecosystem response is needed to combat this problem,” CBA Group Executive Business Banking Mike Vacy-Lyle said. “We are proud to be able to extend our industry-leading technology to others and contribute to protecting more Australians against cyber criminals.”
NameCheck leverages advanced technology and CBA’s access to payment data to help establish the accuracy of account credentials. Bendigo Bank will integrate NameCheck into its Up app. Financial fraud monitoring company Satori will also take advantage of the technology.
“We are excited to work with CBA and extend the NameCheck service to our corporate customer base to complement the existing AI driven financial controls monitoring service driving operational efficiency and preventing fraud,” Satori Executive Director of Growth Mark Bookatz said.
Founded in 2002, Satori is headquartered in Sydney, Australia. The company has more than 200+ customers in the APAC region who rely on its automated transaction monitoring services. These firms include Afterpay, Qantas, and Volkswagen Group.
The Australian government’s plans to regulate Buy Now Pay Later services are having a hard time keeping up with public enthusiasm for the payment option.
This week, the Reserve Bank of Australia (RBA) shared results of a survey that indicated a significant increase in use of Buy Now, Pay Later services. The specific demographic was individuals between the ages of 18 and 39. The survey showed that more than 40% of those in this cohort had used BNPL services in the past year. The survey, which had almost 1,000 participants, also noted an overall increase in the number of people using BNPL. Incorporating data from a Reserve Bank of Australia research paper from 2022, the RBA determined that there has been an increase of 8% in adult BNPL use since 2019.
Designing a regulatory framework for Buy Now Pay Later services in Australia has been on the government’s to-do list since the spring. The goal is to bring BNPL under the umbrella of existing credit regulations, including credit license requirements, and minimum standards on conduct, services, and products. This also includes mandating that BNPL companies conduct credit history checks. Overall the regulations, which will treat BNPL services as conventional lending products, are seen as among the toughest proposed.
But the rollout has hit a snag. The RBA has announced that the new regulatory framework for BNPL will arrive next year rather than at the end of 2023 as originally planned. The reason for the delay was “resourcing pressures” on the government’s legislation writing team. And while this will likely give New Zealand regional bragging rights over its larger neighbor when it comes to adoption of BNPL regulations, the impact of the delay on the Australian BNPL market should be slight.
Here is our look at fintech innovation around the world.
Philippines-based digital bank Tonik has entered the insurance business. The neobank announced a new strategic partnership this week with life insurance company Sun Life Grepa Financial, Inc. (Sun Life Grepa).
The partnership will enable Tonik to offer its customers Payhinga, a credit life and disability insurance product. Payhinga gives policyholders access to life and disability insurance with coverage of up to 120% of the loan amount. Further, policyholders can use a two-month payment holiday to reschedule upcoming loan payments in the event of financial difficulty.
“The partnership with Sun Life Grepa will significantly expand our suite of products, and insurance is a highly sought-after addition our customers have been requesting,” Tonik Country President Long Pineda said.
The Philippines’ first, digital-only neobank, Tonik offers loan, deposit, and payment products to consumers via its digital banking platform. The bank teamed up with FC Home Center, launching its Shop Installment Loan with the retailer in August. In June, Tonik announced that it had reached the one million customer milestone. Greg Krasnov (CEO) founded Tonik in 2020.
Speaking of digital banks based in the Philippines, UNO Digital Bank is teaming up with Collabera Digital. A digital engineering services provider, Collabera Digital will help the bank develop and integrate a mini app within superapp GCash.
Collabera Digital provided the strategy to address key issues such as AML and KYC, and built an integrated API platform. The leading superapp in the Philippines, GCash provides a wide range of financial services including money transfer, billpay, savings, investments, insurance, lending, and more. UNO Digital Bank’s integration into GCash will boost access to financial services to individuals across the socio-economic spectrum. The integration also supports the growth of the digital economy via services like mobile banking and digital wallets.
“Our partnership with GCash is significant in scaling and increasing our customer reach,” founder and CEO of UNO Digital Bank Manish Bhai said. “As a greenfield bank, built independently of a larger traditional institution, we have to be innovative in identifying opportunities to grow and expand. GCash, with their 90+ million users and active thrust towards financial inclusion, is a great partner leading to a win-win proposition for both the entities.”
UNO Digital Bank was founded in 2021 and is headquartered in Taguig, a city in the Manila metropolitan area. The institution had total assets of $29 million (PHP 1.78 billion) as of end of year 2022.
What are fintechs in the Philippines doing for small businesses? Merchant fintech platform yufinannounced a series of partnerships this week designed to bring new services to Philippines-based merchants. The new additions to yufin’s partnership ecosystem include wholesaler Lots for Less, delivery firm Transportify, and streaming content company Vivamax.
Shubhrendu Khoche, President and co-founder of yufin Philippines, noted that the new partnerships will drive greater digital adoption by businesses throughout the value chain. “As the financial growth engine for small merchants, these new partnerships will create more reasons for digital payment for our small merchants, their shoppers, and suppliers,” Khoche explained.
Founded in 2021, yufin aims to raise the income of 10 million households at least by 50% in the next five years. The company’s partnership ecosystem helps turn small, corner shops into preferred banking and credit hubs for their customers. With a goal of partnering rather than competing with local banks, yufin offers assisted digital financial services that enable underserved communities to leverage technology to improve financial outcomes.
Here is our look at fintech innovation around the world.
Sub-Saharan Africa
South Africa’s Lipa Payments secured full SDK certification for Tap to Phone from both Visa and Mastercard.
Kenyan fintech and mobility solutions company Data Integrated won approval to operate as a Payment Service Provider from the country’s central bank.
Stitch, a business payments company based in South Africa, raised $25 million in Series A funding.
Central and Eastern Europe
German B2B Buy Now Pay Later payments provider Mondu registered with the Financial Conduct Authority (FCA).
Polish fintech Verestro integrated the Quicko Wallet money transfer service within the Slack application.
Cloover, a climate-based fintech based in Germany, raised €7 million in pre-seed funding.
Middle East and Northern Africa
ACI Worldwideforged a partnership with MENA-based payments and BaaS enabler NymCard.
One of my biggest takeaways from my conversations about digital assets with delegates at FinovateEurope last month was the idea that new use cases will be among the first signs that the industry has emerged from so-called “crypto winter.”
That bar is likely years away from being cleared. In the meanwhile, crypto exchanges continue to expand access to digital assets for traders and investors. Today’s edition of Finovate Global looks at recent developments in the cryptocurrency and digital asset industries in Central and Eastern Europe (CEE).
Austria-based Bitpanda announced this week that it now offers CFDs – contracts for difference – for trading cryptocurrencies. CFDs are available for Bitcoin, Ethereum, and Solana on Bitpanda’s platform. These products enable cryptocurrency traders and investors to speculate on both rising and falling prices. The new offering, on the platform under the appropriate name “Bitpanda Leverage,” also gives cryptocurrency traders the ability to leverage their trades 2x.
According to coverage in The Paypers, Bitpanda is well aware of both the risk of “complex financial instruments” like CFDs and the “high risk of losing money” they often bring to traders’ portfolios. Bitpanda also acknowledges that the new products are more suited to short-term trading than longer-term investing. The CFDs have been available to a limited number of Bitpanda customers since late 2022. This week, the company is announcing that the products are being made available to all traders on the Bitpanda app.
CFD trading is not as regulated as trading in other financial products like stocks and exchange-traded funds (ETFs). As such, CFD trading is illegal in the U.S. and U.S. residents are forbidden from opening CFD accounts. The derivatives are traded in markets in the Euro Zone, however, as well as in the U.K., Switzerland, Japan, Canada, Australia, South Africa, and New Zealand, among others.
There are many ways in which Ukraine, which continues to defend itself from Russia’s invasion more than a year ago, is seeking greater integration with its neighbors to the West. This week we can add cryptocurrency regulatory policy to that list.
Ukrainian regulatory authorities announced this week that they would adopt the Markets in Crypto-Assets (MiCA) regulation just passed by the European Parliament. Heralded as a major advancement for the cryptocurrency industry in Europe, MiCA seeks to provide uniform regulations and standardized rules for digital assets in the E.U. At present, companies in the cryptocurrency space in the region must negotiate 27 different regulatory frameworks – crippling efficiency and limiting innovation.
“We, along with colleagues from the NKCPFR (National Commission for Securities and the Stock Market) and other regulators, are already working on implementing some provisions of MiCA to make crypto assets legal in Ukraine,” Yaroslav Zheleznyak said. Zheleznyak is the Deputy Chairman of the Tax Committee of Ukraine.
Cryptocurrencies have played an interesting role in Ukraine’s defense against Russian aggression. An article at the World Economic Forum last month noted that more than $21 million in cryptocurrency has been donated to pro-Ukrainian war efforts. According to blockchain analytics company Elliptic, $80 million of that amount went directly to support the Ukrainian government.
Cryptocurrency investors and traders in Lithuania have a new exchange to do business with. Crypto exchange Bitget, which is based in the Seychelles, announced this week that it has secured its registration in Lithuania. This will enable Bitget to offer its service in or from the central European nation.
Analysts consider Lithuania to be among the leading countries in the European Union when it comes to legislation helping develop the cryptocurrencyindustry. The country has been praised for the clarity and transparency of its regulations regarding cryptocurrency licensing – as well as a shorter licensing process compared to other countries in the E.U.
“The global regulation of digital assets is advancing on a daily basis, and we actively observe the regulatory changes around the globe,” Managing Director of the Bitget exchange Gracy Chen said. “We have a whole dedicated compliance team in place to focus on various regulatory compliance matters.” In its statement, the company noted that its compliance team has grown by 50% in the last 12 months. Bitget also recently launched a $300 million user protection fund.
Founded in 2018, Bitget serves more than eight million users in more than 100 countries and regions.
Here is our look at fintech innovation around the world.
Real-time payments software company ACI Worldwide has appointed Thomas Warsop as its Interim Chief Executive Officer, effective immediately. Warsop was formerly the non-executive Chair of the ACI Worldwide Board of Directors. He replaces Odilon Almeida, who was the company’s CEO from March 2020 until now. Almeda was named CEO after Philip Heasley – who had served as CEO and President for 15 years – retired. Independent board director Adalio Sanchez will assume the role of non-executive Board chair.
“As ACI advances its vision to lead the real-time payments revolution, the Board is determined that now is the right time to transition to a new leader focused on accelerating our technology transformation and delivering operational excellence across our business,” ACI Nominating and Corporate Governance Committee Chair Mary Harman said.
A member of the company’s board of directors since the summer of 2015, Warsop became non-executive chairman seven years later in June of 2022. In addition to his tenure on the ACI board, Warsop brings his experience as Group President at Fiserv to his new position. Warsop has led a number of private equity firms previous to joining the ACI board including One Call Care Management, York Risk Services Group, and The Warranty Group. He also held executive roles at Electronic Data Systems, ranging from President of the firm’s Business Process Outsourcing unit in the Asia Pacific to Vice President of Global Financial Services.
“ACI is uniquely positioned to support banks, merchants, and billers around the world,” Warsop said in a statement. “We have market-leading software platforms in use at many of the world’s leading financial institutions and are poised not just to benefit from, but to drive, the rapidly approaching real-time payments revolution.”
ACI Worldwide’s C-suite news comes less than a week after the company announced third quarter results. The report included a 35% year over year increase in new ARR bookings, as well as “notable booking success across all segments, providing visibility into future revenue growth,” then-CEO and president Almeida said. At the same time, the company the impact of inflationary pressures on both interchange revenue and foreign exchanges rates. Adjusted EBITDA for Q3 was down year over year, but the company did iterate its full-year guidance.
Challenges notwithstanding, ACI Worldwide has continued to forge partnerships with institutions around the world, helping them enhance their payment operations. The company teamed up with Sweden’s Westpay in September, who will deploy ACI Secure eCommerce to bring new capabilities to its in-store payment solutions. Also that month, ACI Worldwide announced a partnership with loan management software provider GOLDPoint Systems. ACI will help the Provo, Utah-based company to digitize its billpay operations via its ACI Speedpay solution, which is used by thousands of billers in the U.S.
Founded in 1975 in Omaha, Nebraska, ACI Worldwide is currently headquartered in Miami, Florida. The company is a leading force driving innovation in real-time electronic payments for banks, processors, billers, networks, and more. ACI Worldwide serves 19 of the top 20 banks worldwide, enables more than 80,000 merchants, and provides electronic billpay technology for thousands of organizations. Processing more than 225 billion consumer transactions a year, the company serves more than 6,000 customers in 95 countries around the world.
A publicly traded fintech on the NASDAQ under the ticker “ACIW,” ACI Worldwide has a market capitalization of $2.4 billion. The company has been a Finovate alum since 2011, demoing its business banking solution in partnership with mShift at FinovateFall. ACI Worldwide returned to the Finovate stage five years later to lead a presentation on its latest innovations in ecommerce payment technology at our developers conference, FinDEVr Silicon Valley in 2016.
Active in 15 countries in Latin America, payments infrastructure provider Geopagos has secured an investment of $35 million. The equity funding round was led by Riverwood Capital and featured participation from Endeavor Catalyst. The sum represents the company’s first institutional financing and will be used to fuel the development of new embedded payments solutions and help the firm expand throughout Latin America.
Geopagos provides financial institutions, fintechs, retailers, software companies and other organizations with end-to-end digital solutions to help them launch or grow their payment acceptance businesses in the area. These solutions include terminals that enable mobile phones to operate as point of sale devices as well as technology that turns websites into e-commerce platforms.
With clients including Santander, BBVA, Banco Estado de Chile, and Finovate alum Fiserv, Geopagos processes more than 150 million transactions and more than $5 billion in volume a year. The Buenos Aires-based company was founded in 2013 by Sebastián Núñez Castro, Julián Lisenberg, Fernando Tauscher, Raúl Oyarzun and Damián Harburguer.
“Latin America is a market with very low card penetration and Geopagos is well positioned as a software enabler and infrastructure provider to boost card acceptance and digital payments across the region,” Riverwood Capital co-founder and managing partner Francisco Álvarez-Demalde said.
Speaking of payments in Latin America, blockchain-enabled accounts receivable and B2B payments company PayStand has acquired Yaydoo, an accounts payable, cash flow management, and liquidity solution provider based in Mexico. Yaydoo is one of the fastest-growing startups in Mexico, with more than 150 employees working in more than six different countries. Founded in 2017 and operating throughout Latin America Yaydoo raised $20.4 million in Series A funding last year and this year was named a “Súper Empresa 2022” and a “Súper Empresas para Mujeres 2022” by Expansión Top Companies México.
“Together, PayStand and Yaydoo will redefine the boundaries of B2B fintech across the continent,” PayStand CEO Jeremy Almond said. “The combined company will be one of the first global B2B blockchain platforms at a significant scale. The resulting company will have processed over $5 billion in payments, added 300 additional employees, and built a network of over 500,000 connected businesses, the largest of any commercial B2B blockchain in the world.”
Founded in 2013, PayStand made its Finovate debut at our developers conference, FinDEVr Silicon Valley, one year later in 2014. The company leverages blockchain and cloud technology to digitize receivables, automate processing, lower time-to-cash, remove transaction fees, and drive new revenue. A member of the 2021 CB Insights Fintech 250 and named to the Inc. 5000 for a second year in a row in 2021, PayStand has secured $86 million in funding, most recently raising $50 million in a Series C investment led by NewView Capital and featuring participation from SoftBank’s SB Opportunity Fund and King River Capital.
Here is our look at fintech innovation around the world.
ACI Worldwide unveiled its mobile engagement platform ACI Smart Engage this week.
The new solution relies on location, voice, and image recognition to enable consumers to purchase goods and services remotely with a single click.
The launch of ACI Smart Engage comes at the same time that ACI Worldwide announced a divestment of its business banking unit, ACI Digital Business Banking.
Real-time payments software company ACI Worldwidelaunched its mobile engagement platformACI Smart Engage today. The solution leverages location, voice, and image recognition technology to enable merchants to offer their entire inventory of products and services directly to consumers’ smartphones. ACI Smart Engage combines geolocation with scannable media and audio tags inside a range of media types – including TV, print and radio advertisements, posters, magazines, catalogs, window displays, and more. Consumers can use the solution to instantly purchase products and services on-the-go with a single click.
“With ACI Smart Engage, merchants can reach consumers through their smartphones no matter where they are and turn every interaction into an opportunity to sell,” ACI Worldwide head of merchant Debbie Guerra said. “ACI Smart Engage combines the in-store and online experience for consumers by reaching them on their smartphones through various media, including supermarket labels, restaurant menus, or window displays, and driving true mCommerce sales through embedded one-click payments. With ACI Smart Engage, merchants can make ‘window shopping’ a reality.”
Merchants can integrate ACI Smart Engage into their existing mobile apps using Smart Engage SDK APIs. The technology is a part of ACI Omni-Commerce, a secure omni-channel payment processing platform that supports the in-store, online, and mobile needs of modern merchants. ACI Omni-Commerce also offers consumers more of the kind of purchasing experiences they are looking for.
“Consumers are reaching for their smartphones to make informed buying decisions more than ever before,” Guerra added. “With Smart Engage, we enable merchants to reach those consumers at the right time, when they are most likely to make a purchase and then help them complete the purchase with a single click. It fosters direct engagement between merchants and their customers.”
ACI Worldwide’s launch of ACI Smart Engage comes as the company announced a decision to divest its corporate online banking solutions to middle market private equity firm, One Equity Partners. The move is part of ACI Worldwide’s “three-pillar strategy” which is designed to support value creation for shareholders via a focus on growth.
“Our efforts to accelerate organic growth are firmly on track, and we are now making progress on the third pillar, step-change value creation through M&A,” ACI Worldwide president and CEO Odilon Almeida said. “The divestment is in line with our commitment to continually review the company’s portfolio to maximize shareholder value.”
The transaction for ACI Digital Business Banking, as the technology is called, has been valued at $100 million. The deal is expected to close in Q3 of 2022.
A veteran of both Finovate and our developers conference FinDEVr, ACI Worldwide offers real-time payment solutions to help corporations process digital payments, enable omni-commerce, and manage fraud and risk. Founded in 1975 and headquartered in Miami, Florida, ACI Worldwide is partnered with 19 of the top 20 banks around the world, and works with 80,000 merchants directly and through PSPs. The company’s technology facilitates more than 225 billion consumer transactions a year.
With 2021 revenues of $1.4 billion, ACI Worldwide is a publicly-traded company (NASDAQ: ACIW) with a market capitalization of more than $3 billion.
This week’s Finovate Global takes a look at developments in the Indian fintech industry. Leading off is news that Indian neobank Niyo has secured $100 million in Series C funding. The round was led by Accel and Lightrock India and also featured investment from Beams Fintech Fund, Prime Venture Partners, and JS Capital, among others. Niyo, founded in 2015 by Vinay Bagri and Virender Bisht, will use the capital to support product innovation, marketing, and branding, as well as increasing its distribution footprint and adding talent.
“We have always strived to offer tangible value and a delightful experience to our customers,” Bagri said in a statement. “In the process we are transforming the way India banks.” Co-founder Bisht highlighted the impact of the pandemic on the pace of digitization of financial services in the country. “We are seeing massive tailwinds for digital products since COVID,” he noted.
Niyo collaborates with banks to offer digital savings accounts and other banking services. The neobank serves four million customers via its banking and wealth management operations and says that it is adding customers to its platform at a rate of 10,000 new users a day. With more than $3 billion in transactions, Niyo claims it is the biggest consumer-based neo-banking platform in India.
Earlier this month Niyo introduced the country’s first, fully digital salary account. Over the next three months, the company plans to offer additional banking products including personal loans, credit cards, and integrated forex.
“We can relate to you when you say – Building a crypto exchange is difficult,” WazirX co-founder and COO Siddharth Menon wrote on the company’s blog earlier this week. “While we have learned it the hard way, we want to simplify it for you.”
WazirX’s BUIDL with WazirX program will enable organizations to build their own crypto exchanges leveraging WazirX. The program includes tools, support, guidance, access to angel and VC investors, and more. The exchanges built via WazirX’s new offering will feature access to 300+ of the highest liquidity markets, and the ability to leverage WazirX’s custody and exchange infrastructure for cryptocurrency withdrawals and deposits.
“To be the world leader, we believe that India should build more for Web3,” Menon added. “This is a billion-dollar opportunity, and that is why we at WazirX are here to support you.”
From neobanks to cryptocurrencies to embedded finance, we now turn to news that Google Pay users in India are now able to apply for and receive personal loans in their bank accounts via the Google Pay app. Loans of up to $1,332 (100,000 rupees) are available and can be repaid over a period of as many as 36 months.
The new service is being offered in partnership with India-based digital finance company DMI Finance, who also will determine eligibility for the financing. The loans will be processed in “near real-time” and are geared toward supporting financial inclusion by helping Indian consumers access short-term credit.
“Our teams have worked closely together to bring transparent and seamless credit to millions of Google Pay users,” DMI Finance co-founder and joint Managing Director Shivashish Chatterjee said. “We look forward to scaling this new partnership in the years to come and make the promise of financial inclusion a reality for many millions more.”
FinovateEurope 2022 is less than one month away. If you are an innovative fintech company with new technology to show, then there’s no better time than now and no better forum than FinovateEurope. To learn more about how to demo your latest innovation at FinovateEurope 2022 in London, March 22 and 23, visit our FinovateEurope hub today!
Here is our look at fintech innovation around the world.
It’s a good week to be a fintech in Latin America. Uruguay-based fintech dLocal made its Nasdaq debut, raising more than $617 million in an IPO that gave the firm a valuation of $6 billion. The company, founded five years ago, offers a payments platform that enhances the ability of global merchants to operate in emerging markets. With customers ranging from Amazon.com to Uber, dlocal will use the capital from the IPO to add new features to its platform as well as enter new markets, according to an interview with Reuters.
Also this week, Latin American open finance API platform Belvo announced that it had secured $43 million in Series A funding. The round featured participation from new and existing investors – including investment angels like David Vélez, founder and CEO of Brazilian fintech Nubank. Belvo will use the new capital to “scale and enhance” its data enrichment solutions in particular, as well as launch its bank-to-bank payment initiation offering in both Mexico and Brazil. Adding to its 70-person workforce is also part of the company’s plans, with a goal of doubling headcount by the end of the year and “hiring more than 50 engineers in Mexico and Brazil in the coming months.”
Elsewhere in Latin America, Mexican payment gateway Prosa is reportedly considering a sale that could bring the company a valuation of more than $1 billion. The firm is one of the region’s biggest payment processors, facilitating more than 4.5 billion transactions in 2020. Also this week, EVO Payments announced that it had agreed to acquire Chilean e-commerce payment gateway Pago Fácil.
As Angela Strange and Matthieu Hafemeister noted this spring in their report Latin America’s Fintech Boom, “there is an enormous amount of untapped opportunity in Latin America for financial services of all types.” The authors cite five reasons to be optimistic about the demand for financial services, factors ranging from the region’s size to the opportunity to replace largely cash-based systems, as well as four reasons why Latin American fintech may be at a “tipping point.”
“As is often the case,” the authors wrote, ” growth appears gradual for a long while, then happens suddenly, seemingly all at once. Latin America is currently experiencing an explosion in fintech activity, and this is just the beginning.”
Here is our look at fintech innovation around the world.
Pakistani fintech Tag raised $5.5 million in pre-seed funding; the company also announced that it will join the Summer 2021 cohort of the Y Combinator accelerator.
Zelf, a messenger-based challenger bank based in Latvia and focused on Generation Z customers, announced earlier this week that it has secured $2 million in pre-seed funding. The round was led by Austrian venture capital firm 3VC, and featured participation by Seed X, Hard Yaka, Goldfinger, and angel investor Chris Adelsbach.
The company, founded by CEO Elliot Goykhman, will use the capital to fuel growth and expansion throughout Europe, particularly in Spain, Germany, Poland, and Italy. Zelf also sees the funding as an opportunity to establish itself in the U.K. and the U.S., as well. Most recently, the company launched operations in France and said it has 13,000 people currently using its Zelf Cards there.
“We started building ZELF in 2018 with a vision of a cashless and contactless society of the future,” the Zelf Team noted on its blog in a look back at 2020. “and the shockwave of COVID-19 in 2020 proved that it was the right path not only businesswise, but also sadly healthwise.”
Zelf accountholders get a digital Mastercard and an IBAN account which can be used to send and receive money on instant messaging apps like Facebook Messenger, WhatsApp, Telegram, and Viber. Zelf also features an AI-powered voice interface that can be used to perform basic PFM functions like requesting money, sending invoices, and checking account balances.
“We are confident that our business model of eliminating cumbersome banking apps, as well as physical plastic cards, will prove to be the winning strategy,” Goykhman said.
This week’s Finovate Global Lists takes a look at the fintech industry in the Philippines. IBS Intelligence recently leveraged the Startup Genome’s Global Startup Ecosystem Report to analyze the adoption of digital financial services in the country and pick five companies to keep an eye on this year.
The Philippines, as the article noted, is an interesting case study insofar as the country’s capital of Manila has signficant English-speaking population and what IBS Intelligence called “a more western inclined culture” that is a “natural fit for the growth of fintech.”
Compared to larger neighbor Indonesia and smaller neighbor Malaysia, the Philippines is younger and has a faster growing population. The Philippines also has a marginally higher literacy rate, as well as higher real GDP growth and greater per capita mobile phone penetration (based on subscriptions).
Looking specifically at the country’s fintech industry, Startup Genome noted that fintechs comprise 15% of the startups in Manila, the Philippine capital. The report gave the country’s fintech market a transaction value of $10 billion in 2019 and anticipated a growth of 24% in 2020. Among the fintechs highlighted in the report are digital wallet and exchange Coins.ph (recently acquired by Indonesia mobility company Go-Jek for $72 million) and online financing platform for SMEs, First Circle.
More than two years in the making, the FedNow payments initiative – launched by the U.S. Federal Reserve to accelerate payments and transfers – is picking up speed. The project currently has more than 110 banks, financial services providers, and other organizations slated to participate, and among them are ten Finovate alums.
“We’re gratified by the industry’s tremendous interest and willingness to devote time and energy to help us develop the FedNow Service,” Esther George, executive sponsor of the Federal Reserve’s payments improvement initiatives, said. George, who is also President and CEO of the Federal Reserve Bank of Kansas City, added that the pilot has had to “adjust” to accommodate greater than expected interest.
The idea behind the service is to expand the reach of instant payment services offered by financial institutions and enable businesses and individuals to send and receive instant payments, with full access to their funds within seconds. The FedNow Service will leverage the Federal Reserve’s FedLine network, which connects to more than 10,000 financial institutions directly or via their agents.
The pilot program is designed to review the technology’s features and functionality, assess the user experience, and greenlight the product for further testing and eventual general availability. Participating institutions will be retained, post-launch, to provide additional review and advice with regard to issues like adoption roadmap, industry readiness, and overall payments strategy.
“The FedNow Service marks a turning point in the industry’s move to making real-time payments a reality,” Booshan Rengachari, founder and CEO of Finzly, explained. Finzly is one of Finovate’s newest alums – most recently demoing its technology at FinovateWest Digital last fall – and is one of the participants in FedNow’s pilot program.
Rengachari further suggested that this “turning point” was a moment his company had anticipated. “We created our Payment Hub specifically to help FIs prepare and go to market faster with newer RTP networks,” he said. Finzly’s CEO added that this helps “address the challenges of offering single payment API for multiple payment networks without having to run disparate payment systems from multiple vendors.”
The 10 Finovate alums participating in the FedNow project are listed below.
