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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
Uber is launching a new debit card with tandem checking account.
The Uber Pro debit card is made available via partnerships with Mastercard, Marqeta, and Branch.
Uber Pro cardholders can receive up to 7% cashback on fuel purchases.
Uber’s latest attempt to attract more drivers to its platform comes in the form of a debit card with a tandem checking account. Late last week, the rideshare company announced the Uber Pro debit card.
The new debit card comes courtesy of partnerships with Mastercard, Marqeta, and Branch, a workforce payments platform that caters to gig economy workers and contractors. The card offers Uber drivers up to 7% cash back on gas purchases when they achieve Diamond status as an Uber Pro driver.
The Uber Pro card comes with a checking account powered by Branch, which will automatically deposit cardholders’ earnings into their account after every trip. Branch offers a unique take on earned wage access by enabling workers to access their paycheck as they earn it. The card currently has a wait list and will launch in the coming weeks.
This latest announcement comes three years after Uber originally introducedUber Money, a debit card and mobile app powered by Green Dot, and five years after the company launched its Barclays-powered credit card.
The launch of the Uber Pro card comes alongside a handful of other driver-related announcements from the ridesharing company. The Uber app will now offer drivers a range of nearby trips to choose from, show drivers their exact earnings upfront before they accept a trip, and offer enhanced benefits to Uber Pro drivers.
These driver-focused benefits are in part an effort to smooth out the supply and demand issue that Uber is facing. The nationwide labor shortage, combined with high fuel prices, has historically made it difficult for Uber to attract drivers. In May, Uber CEO Dara Khosrowshahi said, “Our need to increase the number of drivers on the platform is nothing new nor is it a surprise … there’s a lot of work ahead of us, but this is a machine that is rolling.”
Rapyd will facilitate in-app payments for Viber users.
“Through this partnership, Rakuten Viber can confidently step into the world of payments and become a leader in embedded finance, supported by Rapyd’s licensed end-to-end fintech offerings,” said Rapyd CEO Arik Shiltman.
Payments platform Rapyd partnered with consumer-facing messaging app Rakuten Viber today. Under the agreement, Rapyd will facilitate in-app payments for Viber users.
“The future of payments is integrated fintech, and this partnership demonstrates why we founded Rapyd in the first place: to democratize fintech for all,” said Rapyd CEO Arik Shiltman. “We’re proud to provide the infrastructure and licensing for global companies like Rakuten Viber, one of the world’s most trusted and recognized messaging and communications platforms, to develop their own financial services without them having to build the foundation from scratch. Through this partnership, Rakuten Viber can confidently step into the world of payments and become a leader in embedded finance, supported by Rapyd’s licensed end-to-end fintech offerings.”
The move places Rakuten Viber squarely in the center of the global digital payments space. Viber users can use the messaging service to send and receive money instantly, with no fees. Recipients can store money in a mobile wallet with an IBAN, which is available in the Viber app. Rakuten Viber is launching the service in Greece and Germany, where users can transact in Euros. The company will later expand into multiple currencies and will roll out to more countries.
Founded in 2016, Rapyd is a fintech-as-a-service innovator that offers a payments network and platform to facilitate local and international supplier and customer payments. The company has offices in London, Tel Aviv, San Francisco, Denver, Dubai, Miami, Singapore, Iceland, and Hong Kong.
MX has appointed Jim Magats as CEO, replacing Interim CEO Shane Evans.
Magats comes to MX after spending 18 years as a senior executive at PayPal, where he specialized in open finance.
Evans will continue to serve as a senior advisor.
Open finance fintech MXnamed Jim Magats CEO this week.
The news comes after company Founder and former CEO Ryan Caldwell stepped down at the beginning of the year, appointing Shane Evans as Interim CEO. After the transition, Caldwell stepped into a new role as Executive Chair to spend more time with family and focus on his daughter’s health recovery.
“Jim Magats brings a wealth of experience and knowledge about how to deliver high-impact financial solutions and products for consumers, merchants, and financial organizations, along with a vast network of partners and customers at the world’s leading financial institutions and fintechs,” said Caldwell. “We have tremendous confidence in Jim’s ability to lead the organization through the next phase of our growth in establishing our leadership in the open finance economy, helping organizations of all sizes access and act on financial data to improve customer outcomes and grow their businesses.”
Magats comes to MX after spending 18 years as a senior executive at PayPal. Most recently, he served as the company’s Senior Vice President for Omni Payments Solutions where he was charged with overseeing the company’s open banking strategy and partnership network of more than 150 financial institutions and networks.
The appointment is strategic for MX, which has spent the past few years positioning itself as a leader in the open finance space, because of Magats’ experience in open finance. While at PayPal, he worked with regulators in Europe helping to create PSD2 banking standards. He also spent time building PayPal’s open, secure API capabilities to facilitate digital payments.
“Financial data is the lifeblood of a connected economy, and nobody helps organizations access and act on financial data better than MX. Our opportunity to make financial data accessible and actionable is global, extends across verticals, and has the potential to make a positive difference in the lives of billions of people,” said Magats. “After 18 amazing years at PayPal, I’m incredibly excited to join MX, a company on a mission to build the open finance economy and empower the world to be financially strong. We are going to deepen and extend our partnerships with financial institutions and fintechs to fuel the next wave of innovation while fostering greater participation in the global economy through new products, use cases, and services.”
During his seven-month tenure as Interim CEO, Evans saw the company through the tragic passing of company Cofounder Brandon Dewitt. Evans, who joined MX in 2019 as Chief Revenue Officer, will continue to serve as a senior advisor.
European business finance solution company Qonto is seeking to acquire its competitor Penta.
Together, the two will serve more than 300,000 small business customers across Germany, France, Italy, and Spain.
Terms of the deal have not been disclosed.
Two European business finance solution companies have agreed to join forces. In the deal, which is expected to close in the next few weeks, Paris-based Qonto is seeking to purchase Berlin-based Penta. Financial terms have not been disclosed.
“When Steve Anavi and I founded Qonto in 2016, we had the ambitious goal of simplifying everyday banking for SMEs and freelancers across Europe,” said Qonto CEO Alexandre Prot. “Today, we’re already present in four European markets and, while I’m very proud of what we’ve achieved so far, we want to go even further: the natural next step was to join forces with Penta. We are thrilled to welcome the Penta team onboard. Together we’re going to be the finance solution of choice for one million European SMEs and freelancers by 2025!”
Penta launched in 2017 and now serves 50,000 small business customers in Germany. Qonto launched the same year and currently serves more than 250,000 clients across France, Germany, Italy, and Spain. The acquisition will combine Qonto’s brand strength, license, and core banking system with Penta’s local expertise.
Qonto is anticipating that Penta’s existing market presence will strengthen its operations in Germany. The combined entity will make Qonto a strong leader in the European digital business finance sector. After the acquisition is complete, the company will have more than 300,000 customers and 900 employees.
“With the combination of increasing customer numbers and rising revenues, we have gained even more substance in the past 18 months,” said Penta CEO Markus Pertlwieser. “We are very excited that we now have the chance to actively shape digital banking for business customers in Europe as a team with Qonto.”
Open-Finance.ai partnered with FICO to leverage the company’s Blaze Advisor decision rules management system.
Israel-based Open-Finance.ai will integrate Blaze Advisor into its open banking platform to offer real-time credit assessments.
This news comes as “Israel is on the cusp of major banking reform with the introduction of open banking,” said FICO VP of Partner Management in Europe, the Middle East, and Africa Mark Farmer.
Analytic decisioning platform FICO and risk, finance, and compliance software company Open-Finance.ai have teamed up this week.
Under the agreement, Open-Finance.ai will integrate the FICO’s Blaze Advisor decision rules management system into its open banking platform. Using FICO’s technology, Open-Finance.ai will assist its financial services clients to save time on consumer credit assessments by leveraging real-time, analytically driven appraisals.
For Israel-based Open-Finance.ai, this comes just as open banking legislation is gaining traction. “Israel is on the cusp of major banking reform with the introduction of open banking,” said FICO VP of Partner Management in Europe, the Middle East, and Africa Mark Farmer. “Automating decisions allows lenders to increase the efficiency of the lending process without sacrificing risk management regulatory rigour. This will speed up lending, increase customer satisfaction, reduce operational costs and drive economic activity.”
Open-Finance.ai anticipates the move will help remove human bias from lending decisions, improve risk decisions, and expand access to credit to more people.
FICO’s Blaze Advisor gives businesses a solution to make smarter, more transparent business decisions by offering companies multiple methods for rule authoring, testing, deployment, and management. To make this work, Blaze Advisor provides decision trees, scorecards, decision tables, graphic decision flows, and customized templates. The technology also supports business performance monitoring.
“Manual processes, a conservative approach and significant regulation have been a drag on growth of the Israeli market,” said Open-Finance.ai Co-founder Shay Basson. “Now, we have an ability to manage risk instantly, based on multiple data sources to provide an instant, yet risk-aware decision to credit and insurance consumers.”
Founded in 1956 and headquartered in California, FICO offers decisioning tools used by more than 650 clients, including nine of the top 10 U.S. banks and eight of the top 10 EMEA banks. Last year, FICO launched a new loan origination solution called FICO Originations Solution that seeks to automate the entire customer journey.
The $2.4 trillion consumer credit card industry has been getting crowded, but the increase in competition is not enough to stop X1, one of the newest players in the smart payment card space.
X1 was founded in 2017 to create a challenger credit card that fits today’s digital-first era. “With X1, we tossed the rulebook out and designed the first challenger card for digital natives,” said X1 Co-founder and CEO Deepak Rao. “X1 delivers a superior experience that feels both simpler and smarter than any other credit card on the market.”
Having exited private beta in October of last year, X1 now has cardholders in 50 states and its card has been used in more than 100 countries. The company reports that a card transaction takes place every five seconds, and it is on track to see $1 billion in annualized spend this year.
Helping to fuel this success is a $25 million Series B funding round the company received this week. The investment was led by FPV, with Craft Ventures, Spark Capital, Harrison Metal, SV Angel, Abstract Ventures, the Chainsmokers, and Global Founders Capital also participating. X1’s total funding now sits at more than $45 million, which the company will use to invest in product innovation and scale.
So why is a newcomer experiencing this kind of success so early on? The answer may lie in how X1 is differentiating itself from the competition. The company offers four major features that set it apart from incumbent credit card providers. Cardholders can:
Benefit from income-based credit limit
X1 says it bases cardholder credit limits on their current and future income, rather than on their credit score, which is a risk underwriting method that is not only dated, but also excludes certain segments of the population that have thin credit files. The company estimates that this method allows it to set cardholder credit limits up to five times higher than traditional players.
End free trials automatically
In today’s subscription-based economy, cardholders need a payment method that works for their needs. X1 offers virtual payment cards that automatically expire, allowing users to automatically end a free trial by terminating the payment method. Using a virtual card number in this way limits the possibility a user will continue to pay for a service they have forgotten about and don’t use.
Spend anonymously
X1 offers a feature to help users protect their privacy. The company allows cardholders to spend anonymously, without disclosing their personal information, which can be sold, misused, or susceptible to fraud.
Create virtual cards for one-time use
While not a new feature to the credit card world, single-use virtual credit card numbers are more commonly found in commercial credit card offerings. At their core, these single-use virtual cards offer more security since the credit card number expires. They are also great to use as a backup method to control recurring transactions or limit subscription fees.
X1 will begin accepting applications from its 500,000 user waitlist– as well as to the general public– in the coming weeks. The card comes with no annual fee and pays users two points on every dollar they spend (3 points for every dollar if the cardholder spends more than $15,000 in a year). Points can be redeemed at major brands and retailers.
Casavo has raised $408 million in a debt and equity financing round.
The round is comprised of $306 million in debt and $102 million in equity, and brings Casavo’s total funding to $798 million.
The company will use the funds to grow its existing operations, while expanding into France.
Casavo, a France-based fintech that seeks to make it easier for users to buy and sell their homes, has raised $408 million in combined debt and equity. The round is comprised of $306 million in debt, along with $102 million in Series D equity financing, and brings Casavo’s total funding to $798 million.
The equity round was led by Exor NV, along with contributions from existing investors Greenoaks, Project A Ventures, 360 Capital, P101 SGR, Picus Capital, and Bonsai Partners; as well as new investors Neva SGR, Endeavor Catalyst, Hambro Perks, Fuse Venture Partners, and others. Casavo reports that the funds bring the company’s borrowing capacity to more than $510 million, which will be key to scaling its home-buying business.
Casavo was founded in 2017 to simplify the process of buying and selling homes. The company originally launched as a home-buying platform and has since evolved to offer a marketplace that serves both home sellers and buyers. Sellers can either receive a purchase offer from Casavo or find a buyer through the company’s partner agent network, and buyers can access Casavo’s inventory of properties and receive integrated services such as mortgages.
“The round will allow us to consolidate our leadership in Europe by growing across our existing markets in Italy, Spain and Portugal, while expanding into new ones, with France being a priority,” said Casavo Founder and CEO Giorgio Tinacci. “We’ll continue investing in our mission to simplify the way people sell and buy homes, having evolved from a pure home-buying platform to a leading next-generation European residential marketplace.”
Today’s funding comes just four months after Casavo’s last fundraise in March, when the company received a $203 million investment. Casavo currently has 4,000 homes in Italy, Spain, and Portugal listed on its platform. So far, the company has sold 3,200 properties for a total value of $1+ billion.
Fundrise islaunching a $1 billion growth equity fund called the Fundrise Innovation Fund.
The new VC-like fund will facilitate crowdsourced investments in private technology companies.
The move is Fundrise’s first significant expansion outside of private real estate.
Alternative investment firm Fundrise was originally founded to give retail investors access to invest in private real estate. Today, the Washington, D.C.-based company is expanding its horizons, adding access to another area of investing with limited access for everyday investors– venture capital (VC).
The company islaunching the Fundrise Innovation Fund, a $1 billion growth equity fundaimed to democratize access to investments in top private technology companies. The move is Fundrise’s first significant expansion outside of private real estate.
“The proprietary systems and technology infrastructure we created to tap into private real estate are now capable of disrupting ownership of other asset classes previously inaccessible to individuals,” Fundrise said in a blog post announcement. “…in short, Fundrise has the potential to not only open up but completely transform the entire $10 trillion private market.”
Fundrise was founded in 2010 to offer investors an alternative to stocks and bonds. In 2012, the company launched its real estate investment platform that allows users to invest as little as $10 in private real estate. Today, Fundrise has 300,000 users and has acquired more than 200 assets, collectively worth more than $5.1 billion, on behalf of its investors. The company takes a low-fee approach, charging a 0.15% annual investment advisory fee along with a 0.85% annual asset management fee for each fund.
Fundrise said it selected to expand into VC investing because it has proven to be one of the best-performing investments as well as one of the most exclusive investments, since the general public is excluded from investing in a company until after it goes public.
With the VC fund, Fundrise will enable users to invest in a diversified portfolio of high-growth private tech companies ranging from mid-to-late stage, as well as some public equities. The company’s fee model for the fund will not come with a “carried interest” profit sharing component.
Fundrise will open VC investing to current users of its real estate offerings first, though “on a limited basis.”
The world of banking is ever-evolving, and NCR has been part of this evolution since it was founded in 1881.
To get some insight from a firm that has had a front-row seat to industry changes– and to get a glimpse of what’s next– we spoke with NCR Chief Product Officer Erica Pilon. She has spent more than 20 years in the fintech industry, having also spent time at FIS managing three unique digital banking platforms.
What products and technology are resonating with NCR’s 600+ institution clients?
Erica Pilon: Our clients are really responding to data enhancements, crypto, and self-service support. Consumers today expect all interactions to be hyper-personalized, which is impossible without real-time, reliable data. At NCR we are helping financial institutions personalize banking experiences for customers at scale through enriched data and analytics. For example, we recently announced that Allegacy Federal Credit Union has partnered with us and Google Cloud for our data warehousing and analytics solution to make data actionable, unlock predictive insights, and drive innovation and financial health.
Another service resonating with our clients is the ability to offer buy/sell/hold of bitcoin within digital banking as it drives opportunities to build relationships, increase data insights, and generate revenue. Our clients have also shown increased interest in and excitement around enhanced self-service offerings, such as the Kasisto intelligent digital assistant, which provides human-like digital customer support.
What trends are making the largest impact in fintech in the coming year?
Pilon: Community financial institutions no longer only compete with the institution down the block but also with nontraditional threats like neobanks, big techs, and fintech providers. There is a new sense of urgency for financial institutions to provide modern, convenient experiences with robust, innovative products and services to retain customer loyalty, trust, and market share.
Open banking is a massive trend that is transforming the fintech space; it’s creating an opportunity for banking as a service and giving smaller fintech players the ability to try and steal market share from traditional institutions. To compete, banks and credit unions must work with partners that will help them stay open while continuing to leverage the significant trust advantage they have with customers and members. This is another reason why personalizing the experience within digital channels is so important; it helps community financial institutions retain their differentiator and compete with emerging threats.
How is NCR preparing itself for web3?
Pilon: We recently acquired LibertyX, a leading cryptocurrency software provider, which lays the groundwork for us to deliver a complete digital currency solution to our customers. This includes the ability to buy and sell cryptocurrency, conduct cross-border remittance, and accept digital currency payments across digital and physical channels.
NCR remains committed to delivering the agile software platform and services necessary for institutions to power flexible, efficient, and modern banking experiences across all customer touchpoints. Our platform is designed to help our clients quickly innovate and deliver new offerings to keep pace with emerging preferences and trends.
Howhas the recent consumer-first narrative changed how NCR develops its banking products?
Pilon: NCR continues to prioritize consumer-first, mobile-first experiences in our technology solutions. Now, in a world with so much optionality, banks and credit unions must be able to offer a wide range of choices for how consumers can conduct their banking. This means robust self-service capabilities with strong support options like video chat, as well as sophisticated physical footprints.
The consumer-first narrative is another reason NCR is so focused on data; banking interactions today must be personalized, or customers will quickly go elsewhere. This doesn’t just mean knowing basic details like names and birthdays, it also means being able to provide meaningful advice and guidance related to things like financial health and wellness.
How has NCR evolved to serve bank clients in today’s digital-first era?
Pilon: We firmly believe that digital-first doesn’t mean digital-only, but rather digital everywhere. This is where NCR is uniquely differentiated in the market; we have the ability to offer sophisticated digital solutions for both physical and digital touchpoints, enhancing the customer experience and increasing efficiencies. For example, we can facilitate the ordering ahead of cash or coin for small businesses or starting an account opening process online and then finishing it in the branch. NCR bridges the gap between physical and digital touchpoints.
The pandemic only emphasized what NCR and our clients have known all along: the future is digital, and it’s time to adapt. NCR remains dedicated to providing the flexible, innovative, and efficient technology needed to power excellent banking experiences and strengthen credit unions and community banks’ competitive positions.
Modern core processing provider Zeta appointed FIS Veteran Karla Booe as Chief Compliance Officer.
Booe has spent more than 27 years working at FIS, where she served as Deputy Chief Compliance Officer.
Zeta was voted Best of Show at FinovateWest Digital 2020.
Modern core processing provider Zeta is introducing a fresh face this week. The California-based company recently brought onFIS Veteran Karla Booe as Chief Compliance Officer.
Booe will drive regulatory compliance programs for Zeta’s U.S. based clients from her office in Little Rock, Arkansas. She has spent the past 27+ years working at FIS, where she most recently served as the company’s Deputy Chief Compliance Officer.
Commenting on Booe’s appointment, Zeta CEO and Cofounder Bhavin Turakhia said, “She will further our already strong commitment to regulatory risk and compliance.”
“There has been little-to-no tech innovation with regard to the management of regulatory risk compliance for credit cards in the last decade,” said Booe. “I am excited to help drive that change for Zeta’s clients. Zeta’s mission to provide next-gen capabilities to banks so they can launch products, programs, and innovations faster are underscored by a technology framework and by design principles that will completely change the processing landscape.”
Zeta, which was voted Best of Show at FinovateWest Digital 2020, offers modern core and processing for banks and embeddable banking for fintechs. Earlier this year, Zeta received $30 million in new funding, bringing its valuation to $1.5 million.
Digital insurance agency Wefox raised $400 million in a combined debt and equity round.
The funds boost Wefox’s valuation from $3 billion to $4.5 billion.
Wefox relies on technology to take a “prediction and prevention” approach, rather than relying on a “repair and replace” mindset.
Digital insurance agency Wefox just raised $400 million in a combined debt and equity round led by Mubadala Investment Company. EDBI, Eurazeo, LGT, Horizons Ventures, OMERS Ventures, and Target Global also participated. The investment brings Wefox’s total funding to $1.3 billion.
The round boosted Wefox’s valuation from $3 billion to $4.5 billion in 12 months. This increase comes at a time when other fintechs are closing funding in down-rounds, meaning their valuation has decreased.
“This new valuation of $4.5 billion is a clear validation of our business model, which focuses on indirect distribution via agents rather than direct,” said Wefox CEO and Founder Julian Teicke. “This makes our business one of the most credible insurtechs in the market right now.”
According to Teicke, Wefox doubled its revenue, which stood at $320 million last year. Within the first four months of this year, Wefox saw $200+ million in revenues, which positions the company to generate $600 million by the end of this year.
Founded in 2015 and with more than two million customers, Wefox is a licensed digital insurance company that sells insurance through intermediaries, not directly to customers. The company relies on technology to take a “prediction and prevention” approach, rather than relying on a “repair and replace” mindset, which many insurance companies take.
Wefox will use today’s funds for product development and to expand across Europe, Asia, the U.S. The company aims to reach three million customers by year-end.
“Wefox is in the strongest position ever,” said the company’s CFO and Founder Fabian Wesemann. “In successfully closing this funding round we reinforce our strategy and enable faster acceleration on our path to greater revenues and profit.”
I’ve had my eye on Curve since it launched in the U.K. in 2015. Curve consolidates users’ payment cards into a single physical card and digital wallet, meaning that users only need to carry one card.
After Curve announced its U.S. launch earlier this year, I signed up for the waitlist and onboarded last week. I’ve only had the card for about a week so far, but overall I’m fairly impressed.
Better than predecessors
The company’s card consolidation technology seems to be winning where other players have failed. Remember COIN, the digital smart card that promised to replace all of the cards in your wallet? The company had a slow and rocky start after its 2013 launch– it didn’t even begin shipping cards until 2015– and then shut its doors in 2017 after being acquired by FitBit in 2016. At that point, some of the company’s backers had not even received their card in the mail even though they fronted $50 for the opportunity to get on COIN’s wait list.
Curve has obviously learned from COIN’s mistakes. To start, the company has a lower customer acquisition cost (CAC) compared to COIN. While COIN shipped a digital, battery-powered card along with a magstripe-reading dongle that customers would use to load all of their payment cards, Curve issues a standard plastic payment card with an EMV chip and NFC-powered contactless payment technology.
The plus side
Curve also comes with a handful of additional benefits including rewards, no foreign exchange fees, an Anti-Embarrassment mode that will allow the payment to go through even if the card is declined (with restrictions), and a Go Back in Time feature that enables users to change which card is used for a transaction up to 30 days after the fact. Unique benefits such as these are typically only found with digital banks. But I like that Curve offers me access to these unique features while I get to keep my primary banking relationship.
The downside
Of course, there are a handful of drawbacks I’ve noticed so far, as well. The biggest downside for me is that Curve is working with Mastercard for its credit card network. This means two things– I can’t use it at Costco and I can currently add only my debit card to the app. That’s because at the moment, Curve users can only add credit cards from Mastercard, Discover, and Diners Club. This limitation negates the main benefit of the Curve card, which shouts the motto, “one card to rule them all.” Curve plans to support Visa credit cards in the future, however, so perhaps this is only an issue for beta testers.
The other drawbacks are fairly minor. The PFM capabilities are lacking, perhaps because they expect users to turn to their bank for money management tools. Additionally, call me shallow, but I wish the card itself wasn’t so ugly. With black, white, and red lines, the card has a masculine, retro vibe.
Curve’s potential trajectory
If the progress Curve has made in the U.K. is any signal of its trajectory in the U.S., there is hope that the company will not go the way of COIN. The biggest indication of this is its business plan. Unlike other consolidated payment cards and even some digital banks, Curve operates on a freemium model with the three paid tiers ranging from just under $6 to just under $18 per month. Benefits offered to users in higher tiers include using the Go Back in Time feature more than three times per month, adding more than two cards, and receiving 1% cashback at a limited number of retailers. And for users worried about the color of their Curve card, Curve also offers U.K. users other card design options and even a metal card for those willing to pay for the top tier.
