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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
PayPal launched its new stablecoin, PayPal USD (PYUSD) today.
PayPal USD is backed by U.S. dollar deposits, short-term U.S. treasuries, and cash equivalents. The coin is redeemable 1:1 for U.S. dollars.
The new offering is designed for digital payments and Web3 and will be available on Venmo “soon.”
Fully backed by U.S. dollar deposits, short-term U.S. treasuries, and cash equivalents, PayPal’s new stablecoin, PayPal USDis now live. The stablecoin – PYUSD – is designed for digital payments, and is compatible with most digital asset exchanges, wallets, and Web3 apps. Eligible U.S. PayPal customers who buy the coin will be able to transfer it to external wallets, send it via P2P payments, and use it to fund purchases at PayPal-supported checkouts. PYUSD holders will also be able to convert their cryptocurrencies into and from PYUSD, which is redeemable 1:1 for U.S. dollars.
PayPal president and CEO Dan Schulman said that the successful adoption of crypto will need stablecoins like PYUSD. “The shift toward digital currencies requires a stable instrument that is both digitally native and easily connected to fiat currency like the U.S. dollar,” Schulman explained. Moreover, Schulman noted that PayPal – with its “commitment to responsible innovation and compliance” – and powerful brand – is in an ideal position to play this role via its PayPal USD offering. He added that PYUSD will be compatible with Web3 apps from the start and will soon be available on Venmo, as well.
PayPal USD is an ERC-20 token issued on the Ethereum blockchain. The stablecoin is managed by Paxos Trust Company. Paxos has indicated that it will publish a monthly Reserve Report for PYUSD outlining the instruments composing the coin’s reserves. The first such report is expected in September.
PayPal has been a Finovate alum since 2011. In the years since, the fintech has grown into a payments leader with more than 435 million active consumer and merchant accounts, and nearly 30,000 employees. The company has facilitated more than 22 billion payment transactions, representing a total payment volume of $1.36 trillion. Founded in 1998 (as Confinity), eBay acquired the company in 2002 for $1.5 billion. eBay spun off PayPal to its shareholders in 2015, returning the firm to its independent status.
PayPal is a public company, trading under the ticker symbol PYPL on the NASDAQ exchange. The San Jose, California-based fintech has a market cap of $71 billion.
Formerly known as TeamApt, Moniepoint is the largest business payments platform in Nigeria. The company processes $170 billion in annualized total payments volume (TPV), and became QED Investors’ first investment in Africa last year.
Headquartered in London, with offices in Nairobi and Lagos, as well as the U.S., Moniepoint was founded in 2015. The company counts more than 600,000 businesses large and small among its customers. Moniepoint has been recognized by the Central Bank of Nigeria as the most inclusive payment platform in the country, and was named the second-fastest growing company in Africa by the Financial Times.
We caught up with Tosin Eniolorunda (pictured), founder and CEO of Moniepoint, to discuss the state of fintech in Nigeria and what Moniepoint is doing to help provide better financial services to businesses and communities in Africa.
In our extended conversation, we discuss challenges to digital transformation in the region, the evolution of Nigeria’s cashless economy, and what to expect in the wake of Moniepoint’s recent rebranding.
What problem does Moniepoint solve and who does it solve it for?
Tosin Eniolorunda: Moniepoint solves the problem of fragmented, inaccessible, and low-quality financial services for businesses in emerging markets. It is a full-service business banking platform seeking to provide all the digital financial services a typical business needs.
Moniepoint specifically provides businesses in emerging markets with banking, payments, credit, and business management tools to help them grow. Our motivation is to power business dreams and create financial happiness for our customers. We recognize the importance of businesses in driving economic growth. By powering the profitability and operations of these businesses, we hope to enable them to make significant contributions to the economy at large.
To date, we have powered the dreams of over one million businesses who support local communities up and down Africa.
Your company began the year with a rebrand, transitioning from Team Apt to Moniepoint. What was the significance of this decision?
Eniolorunda: The company, TeamApt, started as a service provider, and our name was aptly selected. The team providing these services was the heart of our solution. As the company grew, our flagship product – Moniepoint – became ubiquitous in the market, and it became necessary to bring everything together to push the whole brand forward. We had become the point for people’s money, and it was only right we took up that name.
We know top talent is highly sought after in the global fintech industry, which is why we wanted to show our commitment to embracing the best and brightest by going out into the world in our choice of headquarters. By being more globally oriented, we want to be recognizable as an employer of choice for talents around the world.
What is the financial services industry like in Nigeria? And what is its relationship with the fintech ecosystem?
Eniolorunda: The financial services industry in Nigeria is generally a collaborative one. The Central Bank of Nigeria drives policy change in collaboration with all players in the industry – traditional banks and fintech players – all geared towards a more financially inclusive ecosystem. An example of how this plays out is fintechs working with traditional banks as their settlement partners, and traditional banks providing virtual account solutions to fintechs so they can, in turn, provide digital wallets to their customers.
It’s also recognized that fintechs take a generally technology-first approach to financial solutions, and regulations exist to make this as seamless as possible.
You have said that “low-trust” is an impediment to digital transformation in Africa. Can you elaborate on this challenge and what is necessary to overcome it?
Eniolorunda: Financial education is particularly important to gain trust and support for digital transformation, as people generally are wary of what they do not understand. In societies with a large percentage of uneducated people, it is expected that they will push back on innovation that promises to make their lives better.
For example, if a digital bank wants to provide nimble convenient services, it might decide not to have physical branches or a call centre to manage costs. However, low-trust means that these communities of people want to see a person or hear from them in order to leave their monies in the bank.
We overcame this barrier by approaching these markets using a hybrid distribution method – via collaboration with local people they could identify. When they got introduced to these digital solutions by people they knew and saw in their neighborhoods, it became easier for them to trust these products and try them out.
This spring there were a number of headlines about the “cash crisis” in Nigeria. Can you tell us about this and how the crisis impacted Moniepoint?
Eniolorunda: In March 2023, as part of its effort to aid in adopting cashless means of payments, combat inflation and prevent fraud, the Central Bank of Nigeria started a redesign of the Naira, Nigeria’s currency. People had to turn in their old notes as they were no longer legal tender, and the consequence of this process was a reduced availability of cash and, by extension, increased reliance on digital payments.
Moniepoint began to focus on supporting businesses in April 2022, extending our banking and payment tools to them. Consequently, during this cash crunch, we were well-placed to provide these businesses with the tools they needed to accept digital payments and stay afloat.
As a result, we saw a surge in transactions during this period. We adjusted our platform to make it more reliable, helping us to keep supporting these businesses.
What role will Moniepoint play in an increasingly cashless economy in Nigeria and other parts of Africa?
Eniolorunda: By being a banking partner for businesses, we enable them to receive payments digitally, which is very important in Africa’s journey towards becoming a cashless economy. In 2022, we helped businesses process over $170 billion, and are continuing this positive trend in 2023.
We are determined to stay at the forefront of the digital revolution. Initial efforts across the continent have been focused on providing individuals with access to digital financial services, giving them cards and other means to pay digitally. It’s not enough for customers to be empowered to pay digitally; the businesses have to be equipped with the education and resources to receive these payments.
When businesses are able to receive these digital payments directly, cash becomes less central to every transaction, and we’re collectively closer to a cashless ecosystem.
There has been talk in the fintech press about Moniepoint and potential acquisition opportunities. Is the company actively looking to make significant acquisitions?
Eniolorunda: Yes, the plan is to make significant and strategic acquisitions that align with our overall goal of providing an all-in-one financial platform for businesses in emerging markets. These acquisitions allow us to expand our product suite or enter new markets.
Also recently Moniepoint announced a partnership with Google Cloud. Why did Moniepoint pursue this partnership, and what will the partnership help Moniepoint accomplish?
Eniolorunda: As we grew bigger and faster, it was important that financial transactions on our platform could be performed at light speeds, so adopting a hybrid cloud strategy was key for us.
Some of the tools include Cloud Spanner and Kubernetes, which help us to manage and process high volumes of transactional requests per minute, with no lag time. A partnership with Google Cloud ensures we can use their services with personalized support that the scale of our business needs.
What can we expect from Moniepoint in the second half of 2023 and into next year?
Eniolorunda: We are proud to have already been be recognized this year as not just Africa’s largest fintech, but also its fastest-growing. But this is only the beginning.
We have so much in store for the second half of 2023, including plans for a new product and to enter new markets. Watch this space.
Venture investing platform OurCrowd announced an integration with Airwallex.
The integration will make it easier for investors around the world to use their local currency to invest in startups.
Based in Israel, OurCrowd made its Finovate debut at FinovateSpring 2016.
Payments and financial platform Airwallex and venture investing platform OurCrowdannounced a new partnership this week. The two companies are combining their efforts to make it easier for both institutions and accredited investors to invest in startups wherever they are and in their local currency – all with a single click.
The integration works with OurCrowd allocating a global account for each investor. Investors can choose to convert their funds into a number of different currency options, including their own local currency. OurCrowd converts the funds to the selected currency at a transparent rate that is typically guaranteed for 24 hours. More than a third of OurCrowd’s FX flow has moved via Airwallex since the company embedded its API in February. OurCrowd anticipates increasing its flow to 90% by the end of the year.
“With the globalization of the startup world advanced fintech which is multi-currency is a game changer,” OurCrowd CEO Jon Medved said. “Now you can be sitting in Israel and invest in a Silicon Valley startup, pay in Shekels with a single click and it is totally transparent.”
Traditionally, investors have had to convert their local funds into U.S. dollars and then send those funds by wire in order to invest in startups. In contrast, the partnership between OurCrowd and Airwallex will provide investors from more than 195 countries with a platform that enables them to use their own currency to invest in startups. Integrating Airwallex’s API into its platform also gives accredited investors access to Airwallex solutions such as Global Accounts, Payouts, and LockFX which offer further opportunities for investors to participate in startup deals.
Pranav Sood, EGM, EMEA at Airwallex, described the partnership as another success for embedded finance. Sood explained that the integration was a “perfect example” of supporting the growth of its end users while simultaneously giving OurCrowd tools to add to the services they are able to offer. “From streamlining payment processes for investors and startups to minimizing FX costs, embedded finance is simplifying the way businesses operate across borders,” Sood explained.
Headquartered in Melbourne, Australia, Airwallex helps more than 100,000 businesses streamline their international payments and financial operations. The company offers solutions for payments, treasury and spend management, as well as embedded finance, and processes $50 billion in annualized transaction volume. In recent months, Airwallex has forged partnerships with Brex, payments network TrueLayer, business payments platform MODIFI, and Expedia. Founded in 2015, the company has raised more than $900 million in funding at a valuation of $5.6 billion.
OurCrowd made its Finovate debut at FinovateSpring 2016. At the conference, the Israel-based company showed how its app provided an interactive investment discovery and review process to help accredited investors make better, more informed decisions. One of the most active venture investors in Israel over the past ten years, according to Pitchbook, OurCrowd has more than $2.2 billion in commitments. The company has deployed capital into more than 420 portfolio companies and 50 funds across five continents. Founded in 2013, OurCrowd has more than 225,000 registered members from 195 countries on its platform today.
Rumors have circulated that the partnership between one of the biggest names in finance – Goldman Sachs – and one of the biggest names in tech – Apple – is coming to an end.
Specifically, the reports suggest that Goldman Sachs is looking to exit its financial relationship with Apple. Goldman Sachs is Apple’s partner for its Apple Card – and has been since 2019. Goldman Sachs is also Apple’s partner for its Buy Now Pay Later service, currently in beta. Reports from the Wall Street Journal indicate that Goldman Sachs is looking to off-load its Apple credit card business to American Express.
So why has the relationship soured? Here are four possible factors:
Know Your Customer
One of the big headline issues hinting at friction between Goldman Sachs and Apple occurred when Apple CEO Tim Cook was testing the Apple Card and was unable to get approved. The issue had to do with fraud protection protocols on Goldman Sachs’ side. The company’s underwriters rejected the application because, as a well-known, high-profile individual, Tim Cook is often impersonated by fraudsters. This appeared to be a one-off problem at first. But an investigation by the U.S. Consumer Financial Protection Bureau led to additional concerns about disputed transactions and, ultimately, reports of gender bias in the granting of credit limit increases. Goldman Sachs was cleared of any wrongdoing, but the drama helped stoke tensions between the company and Apple.
Culture Clash
It’s not surprising that there were issues between the East Coast Wall Street culture of Goldman Sachs and the West Coast Silicon Valley culture of Apple. But there were very real challenges in the working relationship between the two firms. As is often the case when “move fast and break things” technologists team up with the rules-based world of finance, there was a tension between what one person called a focus on “the sleek technology and product pizazz” on the one hand and “regulatory compliance and profitability” on the other. Even at a more mundane level, basic issues such as the timing of billing statements and card design became grist for conflict and development delays.
The Bank Behind the Curtain
Writing at 9to5 Mac, Chance Miller noted that in addition to losing a ton of money with Apple Card – more than $1 billion by January 2022 – there are other ways that Goldman Sachs was losing out on the Apple partnership. Miller points out that not only was Apple developing its own in-house financial service project (called “Project Breakout”), but also there were other aspects of the relationship that ill-served Goldman Sachs. “One thing to keep in mind is that most Apple Card users likely don’t even know Apple Card is backed by Goldman Sachs,” Miller wrote. “Goldman Sachs exists in the backend, and everything else is managed directly through the Apple Wallet app.”
While this relationship is common in fintech and financial services, it seems like a poor approach for Goldman Sachs, which is newer to the consumer business than Chase or American Express and was likely seeking to build its consumer brand via its association with Apple. Couple that issue with the financial losses, and the potential of Apple “breaking out” on its own, and Goldman Sachs may have one more reason to start second-guessing its Apple Card gambit.
Whose Idea Was This Anyway?
When Goldman Sachs first announced its partnership with Apple, there were many who questioned the financial institution’s deepening foray into consumer banking. Goldman Sachs earned its lofty reputation in the world of finance as a leading investment bank and investment management firm. To say that consumer banking was not a core Goldman Sachs competency would be an understatement. But in the wake of the financial crisis, with Wall Street banks desperate for new revenue sources, consumer banking and the rise of fintech were alluring opportunities to an institution like Goldman Sachs. Goldman Sachs had room to grow – and money to burn. The firm also had a brand name and reputation that would help it gain the attention it would need in an increasingly competitive market.
But projects like Marcus rose and plateaued, with an initial rush of deposits leading to overly optimistic profit forecasts and, ultimately, significant losses. Efforts to expand into areas such as investing via Marcus revealed that Goldman Sachs was not as innovative as smaller upstarts like Robinhood. An attempt to leverage opportunities in consumer lending with the acquisition of Buy Now Pay Later startup GreenSky proved costly.
Seen through this lens, Goldman Sachs’s issues with Apple Card may have more to do with Goldman Sach’s issues with consumer banking.
Digital mortgage platform SimpleNexus has integrated with Finastra’s MortgagebotLOS.
The bi-directional integration is designed to streamline the home financing process for both home buyers as well as lenders, credit unions, and banks.
Finastra was formed in 2017 as the product of a merger between Misys and D+H.
Digital mortgage platform SimpleNexus has integrated with Finastra’s loan origination system for digital mortgage lending, MortgagebotLOS. The bi-directional integration will streamline home financing for both home buyers as well as the credit unions, banks, and lenders who cater to them. Homebuyers will be able to submit mortgage applications by smartphone or other Internet-connected device, and will benefit from being able to easily and securely scan and upload required documents. Automated mortgage loan milestone updates, courtesy of real-time data syncing between the two systems, notify homebuyers on their progress and point to next steps.
“The integration enables financial institutions to optimize their use of both platforms while providing borrowers with a seamless and supportive mortgage application process,” Finastra director of product management Mary Kay Theriault said. “Our goal is to equip lenders with the tools they need to stay ahead in any mortgage market.”
Ben Miller, SimpleNexus CEO, underscored the importance of the bi-directional integration of the two technologies. Miller noted that both homebuyers and lenders will benefit from improvements in convenience, efficiency, and overall usability with the new “from-anywhere digital mortgage application portal.”
Among the first banks to have deployed the technology are ChoiceOne Bank, based in Michigan, and Flanagan State Bank, based in Illinois. Both institutions have leveraged the integration to improve the navigability of the mortgage process for homebuyers as well as reduce manual and redundant tasks for loan originators and processing teams.
Founded as a merger between Misys and D+H in 2017, Finastra currently serves more than 8,100 financial institutions – including 45 of the world’s top 50 banks -across 130+ countries. The company offers solutions for lending and corporate banking, payments, treasury and capital markets, investment management, and banking-as-a-service.
Last month, Finastra announced a partnership with Open Finance company and fellow Finovate alum MX. The partnership will integrate MX’s PFM, insights, and account aggregation solutions with Finastra’s Fusion Digital Banking platform. Also in July, Finastra announced that it was working with European payments processing startup Salve Financial Hub and specialist mortgage lender and savings provider Melton Building Society.
Headquartered in London, Finastra maintains offices in Canada, Singapore, the UAE, and the U.S. Simon Paris is CEO.
Maine-based Machias Savings Bank has partnered with Jack Henry to modernize its technology stack.
Founded in 1869, Machias Savings Bank has $2.4 billion in assets.
Jack Henry has been a Finovate alum since 2010. Newsweek named the company as one of America’s Greatest Workplaces in 2023.
One of the oldest banks in Maine, Machias Savings Bank, has turned to Jack Henry to modernize its technology stack. The financial institution will deploy Jack Henry’s core processing solution to help automate processes and improve efficiency. Machias Savings Bank also will take advantage of business process solutions like Jack Henry’s Enterprise Workflow, as well as access more than 950 API-integrated, third-party fintechs that are a part of Jack Henry’s ecosystem.
“Jack Henry’s innovative mindset positions us well for a technology transformation that will help us stay competitive throughout shifting market and economic conditions,” Machias Savings Bank COO and EVP Peter Greene said. He added that the partnership will help the bank reduce costs while better serving its commercial customers, which have been a special focus for the institution.
“These modernization efforts will help Machias Savings Bank strengthen its connection to a new generation of customers, compete with the big banks, and remain a strong pillar in their community,” Jack Henry SVP and president of Bank Solutions Stacey Zengel added.
A Finovate alum since 2010, Jack Henry serves community and regional financial institutions, providing both internally developed technology solutions as well as integrations with leading fintech innovators. With more than 8,000 clients, the Monett, Missouri-based company offers digital banking, payments, lending, financial crime, and financial health solutions to help banks, credit unions, and other financial services companies innovate faster and compete more effectively against larger rivals in both finance and tech.
Last month, Jack Henry announced its support for the Federal Reserve’s FedNow Service. In June, the company launched its real-time payment fraud feature – Payrailz Fraud Monitor. The technology leverages AI and machine learning to identify and assess multiple fraud indicators to provide actionable scores on each payment transaction. The AI-based offering was made possible by Jack Henry’s acquisition of Payrailz in 2022. In addition to its partnership with Machias Savings Bank, Jack Henry teamed up with Platinum Federal Credit Union in May; First Community Bank, Sunrise Bank, and Today’s Bank in April; and virtual bank Greenpenny in January.
Jack Henry trades on the NASDAQ under the ticker JKHY. The firm has a market capitalization of $12 billion.
Machias Savings Bank was founded in 1869. The institution has $2.4 billion in assets, and 17 branch locations throughout Maine. Larry Baker is president and CEO.
Digital asset tokenization platform DigiShares partnered with digital asset tax, accounting, and data platform Ledgible.
The partnership will ensure greater accuracy and efficiency when assessing taxes for cryptocurrency and tokenized assets.
Founded in 2018, DigiShares made its Finovate debut at our all-digital event, FinovateSpring 2021.
White-label digital asset tokenization platform DigiShares has inked a partnership with digital asset tax, accounting, and data platform Ledgible. The collaboration will give DigiShares issuers, investors, and their accounting teams greater accuracy and efficiency in the challenging area of crypto and tokenized asset taxation.
Specifically, DigiShares will send subscriber investment, trade, and distribution to Ledgible’s Digital Asset Tax and Accounting Platform. Ledgible’s platform then analyzes the economic and ownership activity and normalizes it to enhance CPA-led preparation of Forms 1065 and 1120, Schedule K-1, and other tax returns. The technology assesses digital asset tax liability and provides that data to the customer’s accounting system.
“With the growing adoption of crypto and tokenized assets, tax gain and loss accuracy and efficiency in this new, complex environment is critical for each participant in the tokenized asset ecosystem,” Ledgible CEO Kell Canty said.
Founded in 2018, DigiShares made its Finovate debut at our all-digital event FinovateSpring 2021. The company, headquartered in Denmark, demoed how its technology provides automation and liquidity for real estate via its digital asset tokenization platform. DigiShares digitizes and automates both the processes related to financing of projects as well as ongoing corporate management and ownership. In addition to real estate, use cases for the company’s digitization technology include payments, KYC, e-signing, investor management, and legal processes.
“This collaboration opens new possibilities for our clients in managing digital assets, enabling them to stay compliant and confident in their tax and accounting practices,” DigiShares co-founder and CEO Claus Skaaning said.
2023 has been a busy year of partnerships for DigiShares. This spring, the company announced collaborations with cryptocurrency company TFC Services, Spanish real estate discovery solution Equito App, alternative trading system (ATS) company Oasis Pro Markets, and chartered trust company Fortress Trust. Earlier this month, DigiShares teamed up with Texture Capital to help boost liquidity opportunities for tokenized real-world assets (RWAs).
Disability Pride Month is coming to a close. The annual July commemoration is an opportunity to honor the experience and achievement of those in the disability community. The month of July is special because President George H.W. Bush signed the Americans with Disabilities Act into law on July 26, 1990. The landmark legislation was the first comprehensive law enshrining the civil rights of people with disabilities.
Today we take a look at just a handful of ways financial technology and the financial services community is helping support people with disabilities, whether those challenges are physical or cognitive, transitive or enduring.
There are some who bristle at the euphemism “differently abled.” But the idea of leveraging one ability to make up for another is at the heart of inclusion when it comes to people with disabilities. This is true when we are talking about technologies that enhance the power of hearing or touch for those with visual challenges. It is also true when we talk about a digital banking world that ultimately makes banking services more accessible to all – including those who cannot easily travel.
At the same time, greater awareness of the challenges faced by those with physical and cognitive challenges also means understanding the limits of technology. A pilot project in 2010 that explored disability inclusion in microfinancing institutions in Africa produced what one observer called “several clear conclusions from this pilot worth repeating because they are likely to have near universal application for MFIs entering this market.” The recommendations?
Don’t develop special credit products. Don’t give special conditions. Don’t get disappointed too soon. Identity existing clients with disabilities. Learn from them and use them in promotional efforts and in reaching out to new clients. Join efforts with local disability organization. Improve the physical accessibility of the premises.
A sizable number of government organizations and non-profit entities exist to help support people with disabilities secure employment, housing opportunities, as well as economic and health benefits. In many instances, non-profits have benefited from partnerships with financial institutions. This includes the partnership between JP Morgan Chase and the National Disability Institute. The bank, for example, is backing the NDI’s effort to inform and educate low- and moderate-income individuals with disabilities about the resources available to them under the Community Reinvestment Act (CRA).
The partnership between NDI and JP Morgan has produced some interesting insights into the challenges of small business owners with disabilities, as well. The report, Small Business Ownership by People with Disabilities: Challenges and Opportunities, makes a number of important points – foremost among them that entrepreneurialism is often a major employment choice for people with disabilities. The reasons for this vary from preferring a more flexible work schedule to previous experiences with discrimination or a hostile work environment to a lack of advancement opportunities. Importantly for people in financial services and fintech, the report noted that smaller, disability-owned businesses often avoid traditional financial channels and struggle to secure financing.
The causes for this aversion include concerns about using personal assets as collateral, a lack of assets, or benefit-related issues – such as a fear of losing social security benefits if their countable assets climb too high. Helpfully, the report provides a number of recommendations to help banks and fintechs better serve disability-owned businesses. These suggestions include greater investment in CRA funds for small businesses to more support of policies that would boost business opportunities, access to capital, and better coordinate of public resources.
Sometimes helping people with disabilities means helping people who help those with disabilities. According to data from co-parenting solution provider SupportPay, 38 million people are taking care of loved ones in 2023. To this end we share news that SupportPay has unveiled a new app designed to make it easier for caretakers to share, manage, and track expenses. The solution also enables caretakers to coordinate schedules and streamline communication. It is expected to be available in the fall of 2023.
Sheri Atwood, SupportPay founder and CEO, highlighted the fintech component of the new offering compared to other solutions on the market. “While several caregiver solutions are entering the market, none are focused on reducing the stress of managing expenses between multiple caregivers,” Atwood explained. “Our solution is built to solve this pain point by simplifying and streamlining this process.”
More than 65,000 parents are using SupportPay to manage more than $450 million in expenses and payments. In addition to helping caregivers share, organize, and track expenses and schedules, the new offering also helps caregivers review and resolve disputes as well as maintain certified records of expenses and payment histories. These can be especially helpful for tax purposes or addressing legal issues that arise.
“We knew our platform could be of assistance to all family members, including the staggering number of caregivers,” Atwood said. “From our co-parenting solution, we know that when people share financial responsibilities – whether it’s with an ex, a sibling, or another family member – the process can be much more time-consuming, conflict-ridden, and stressful.”
Founded in 2018, SupportPay is headquartered in Charlotte, North Carolina. The company has raised $6.8 million in funding. SupportPay’s investors include LAUNCH and The Syndicate.
When we think of fintech in Asia, China often comes quickly to mind, as do Singapore, Hong Kong, and a few other places. But Japan? Not so much.
Why is this so? One of the more interesting reads on the topic of fintech in Japan that I’ve come across is a Deloitte study Japanese Fintech in the Global Context. In the report, Deloitte Tohmatsu Consulting Social Impact Director Yasuyuki Ogyu explains some of the challenges that prevent Japan from having the sort of fintech industry we see in countries like the U.S. – or neighbor and rival China.
Ogyu notes that Japan has “a favorable B2C market environment.” Unfortunately, the country also has a “rock-solid yet inflexible financial infrastructure.” This has made investors hesitant to commit capital to new financial services businesses for fear that the return of investment would be low and slow compared to other opportunities in the region. Ogyu shows how, in contrast to the U.S., the high level of quality demanded of Japanese IT systems makes them “ill-suited (in terms of speed and cost) to new initiatives like fintech.” Comparisons between API laws in the U.S. and Europe compared to Japan show that there is still a great deal of work to be done educating the public on the value of “services that utilize personal data.”
Check out the full report. Deloitte’s study is an interesting look at the relationship between fintech innovation and the incumbent Japanese financial services industry. The report also provides a handful of recommendations that might help fintechs make greater inroads in the country.
That said, what are some of the more interesting developments on the Japanese fintech scene of late?
Just a few months after securing a deposit-taking license and one month after going live with its mobile app, Japanese digital bank Habitto announced that it surpassed 12,000 downloads. Habitto has also received more than $922,500 (¥130 million) in new deposits over the past month. But the download milestone news almost was overshadowed by a report that the neobank had opened a new office in the fashion district of Cat Street Uruhara.
Habitto co-founder and CEO Samantha Ghiotti explained. “Despite being a mobile-first finance brand, we still believe that it’s essential to connect with customers at ground level and with a human approach,” Ghiotti said. “Trust in financial brands is built over time. We can only achieve this trust through a combination of positive customer experiences both on mobile and face-to-face.”
Ghoitti and Chief Creative Officer Liam McCance founded Habitto in 2021. The Tokyo-based neobank offers an interest rate of 0.3% on deposits up to ¥1 million as well as a Visa debit card. The company’s mobile app includes free financial advice, personalized money plans, and in-app chat and video call services. Habitto has raised a total of $7.3 million in funding from investors including Saison Capital and Cherubic Ventures.
Turning to the B2C end of the country’s fintech sector, we note that Olta, a Japanese fintech that helps SMEs secure funding, has raised $17.8 million in funding. The investment in the Tokyo-based fintech takes the company’s total capital raised to more than $60 million. A sizable number of investors participated in the Series B round. These investors include SBI Investment, Spiral Capital, DG Ventures, WingArc 1st, AG Capital Delight Ventures, Tottori Capital, Nobunaga Capital Village, BIG Impact, and Aozora Corporate Investment.
Olta was founded in 2017. The company provides cloud-based factoring services for the procurement of funds to meet short-term funding needs without resorting to debt. Olta’s role in supporting small businesses during the COVID pandemic was highlighted by Nikkei Asia in the spring of 2020. One meat wholesaler described how he was able to convert several hundred thousand yen in accounts receivable into cash using Olta’s services.
Here is our look at fintech innovation around the world.
Sub-Saharan Africa
Kenyan telecommunications company Safaricom partnered with U.K.-based TerraPay to launch mobile money transfer service to Bangladesh and Pakistan.
How are community banks keeping pace with rising customer expectations and the demands for greater financial inclusion? What role do fintechs play in helping community banks offer their customers the latest innovative fintech solutions?
I spoke with Charles Potts, Executive Vice President and Chief Innovation Officer for the Independent Community Bankers of America (ICBA) to discuss this and other issues, including:
Key challenges faced by community bankers today
New opportunities and customer expectations
The role of partnerships in helping community banks respond to new opportunities
Core banking provider Tuum and bank orchestration platform Numeral announced a new partnership this week.
The two companies will work together to help financial institutions and fintechs launch and grow across Europe and the U.K.
Paris, France-based Numeral made its Finovate debut this spring at FinovateEurope in London.
A strategic partnership between core banking provider Tuum and bank orchestration platform Numeral is designed to help both financial institutions and fintechs to launch and grow across Europe and the U.K. The combination of Numeral’s bank integrations and Tuum’s modular core banking platform will enable FIs and fintechs to access a variety of European and U.K. payment schemes – including SEPA, Bacs, FPS as indirect participants via integrations with E.U. and U.K. partner banks.
This provides access to partner banks’ local virtual IBANs – or to issuing their own local IBANs. According to research from Numeral, European consumers said they were 83% more likely to use financial services that offered local IBANs instead of foreign ones. The company’s survey also noted that a quarter of respondents said that they had experienced “IBAN discrimination” when using a foreign IBAN. The partnership between Tuum and Numeral, by facilitating local IBANs, will boost consumer trust as well as combat the issue of IBAN discrimination.
In a statement, Numeral CEO Édouard Mandon underscored the importance of scale when it comes to unit economics in fintech and financial services. “Building a pan-European payment infrastructure is critical for financial services and fintech companies to access a broader market, acquire more customers and achieve profitability,” Mandon said. He highlighted the challenge of financial institutions trying to build these solutions internally and pointed to the partnership between Tuum and Numeral as a better way. “Financial services companies should be able to build systems that correspond to their specific needs from readily available building blocks,” Mandon added.
Tuum VP of Global Partnerships Jean Souto shared Mandon’s concern about the challenges FIs face when it comes to allocating scarce resources. “Establishing operations across different countries demands substantial capital and operational expense,” Souto explained. “With Tuum and Numeral’s joint proposition, companies can now harness the power of a modular core banking platform and a pan-European bank orchestration platform.”
Headquartered in Paris, France, Numeral demonstrated its technology at FinovateEurope earlier this year. At the conference, the company showed how financial institutions can leverage its technology to automatically send, receive, and reconcile SEPA payments. The company also demoed how its API platform optimizes FI payment operations by automating bank payment processing. The same month that Numeral made its Finovate debut, the firm announced that it was going live in the U.K.
Providing the payment infrastructure for European fintechs such as Swile and Spendesk, Numeral says that it is on pace to process $5.5 billion (€5 billion) in 2023. The company announced in May that it was teaming up with BNP Paribas and European Buy Now, Pay Later (BNPL) outfit Alma to automate payments to merchants.
Numeral has raised €13 million in funding. The company includes Balderton Capital and Kima Ventures among its investors.
New York-based digital bank Grasshopper announced a partnership with automated financial crime assurance and testing specialist Cable.
The partnership will enable the bank to enhance its own compliance and risk management capabilities.
Cable made its Finovate debut last September at FinovateFall.
Digital bank Grasshopper has turned to Cable for its automated financial crime assurance and testing capabilities. The bank will leverage Cable’s technology to deploy next-level automation that will enhance the advanced compliance and risk management capabilities of its own compliance program.
“Cable will help us and our fintech partners take advantage of the latest automation to gain superior visibility and comprehensive compliance insights, which will enable our clients to scale more efficiently and responsibly – back by the leading advanced compliance technology,” Grasshopper Chief Compliance Officer Chris Mastrangelo said.
Cable offers a solution that enables both banks and fintechs to automate their compliance assurance and effectiveness testing. The company’s Automated Assurance offering helps institutions discover regulatory breaches and control failures when they occur, empowering compliance teams to take immediate action. Cable’s technology streamlines a variety of manual processes including operations in quality control, stakeholder reporting, and record management. The company says that businesses have achieved nearly a 6x average return on investment in their first year using Cable. Clients using Cable’s complete suite of solutions have saved an average of $440,000 a year, according to the company. Cable demoed its technology at FinovateFall last year.
Based in New York, Grasshopper is a digital bank with total assets of more than $700 million. The institution caters to the “innovation economy,” serving small businesses, startups, venture capital and private equity, as well as fintechs. The bank’s partners include a number of Finovate alums including Visa, FIS, and Alloy. Grasshopper won Best Use of Tech in Banking at the 2023 Banking Tech Awards USA sponsored by sister publication Fintech Futures.
“As one of the most innovative BaaS providers, Grasshopper demonstrates that integrating cutting-edge compliance infrastructure and automation is mission-critical to the success of the best BaaS companies in today’s banking landscape,” Cable CEO Natasha Vernier said. Grasshopper will take advantage of Cable’s Partner Hub, which provides compliance infrastructure that is specifically designed for bank-fintech relationships. This includes automated risk assessments, automated assurance, quality assurance, management information, reporting, and more.
Vernier co-founded Cable with Chief Product Officer Katie Savitz in 2020. The company raised $11 million in Series A funding in May. Stage 2 Capital and Jump Capital provided the financing, along with existing investor CRV. This year alone, Cable has partnered with digital asset custody platform Palisade, embedded banking software platform Treasury Prime, U.K. bank Griffin, and crypto payments company Ramp.
