Author: Julie Muhn (@julieschicktanz)

Apple Launches iPhone Tap-to-Pay as Payment Acceptance Tool for Merchants

Apple Launches iPhone Tap-to-Pay as Payment Acceptance Tool for Merchants
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news
  • Apple launched its Tap to Pay capability enabling merchants to accept payments via iPhone
  • Stripe will be the first payment platform to offer the new Tap to Pay functionality.
  • The new solution will compete with Block’s Square, PayPal’s contactless QR code payment offering, and others

Rumors circulated about the launch of a contactless payment acceptance tool for iPhone a few weeks ago. Today, the news is no longer a rumor; Apple confirmed the details.

The tech giant announced plans to launch Tap to Pay on iPhone, a new capability that lets merchants use their iPhone to accept Apple Pay, contactless payment cards, and other digital wallets by tapping it to their iPhone. The new payment tool will be available as a service. Apple will allow payment platforms and app developers to integrate the new contactless payment capability into their iOS apps for business customers.

“As more and more consumers are tapping to pay with digital wallets and credit cards, Tap to Pay on iPhone will provide businesses with a secure, private, and easy way to accept contactless payments and unlock new checkout experiences using the power, security, and convenience of iPhone,” said Apple’s Vice President of Apple Pay and Apple Wallet Jennifer Bailey. “In collaboration with payment platforms, app developers, and payment networks, we’re making it easier than ever for businesses of all sizes — from solopreneurs to large retailers — to seamlessly accept contactless payments and continue to grow their business.”

Tap to Pay leverages NFC technology to enable customers to pay by holding their iPhone, Apple Watch, contactless credit or debit card, or other digital wallet near the merchant’s iPhone, to complete a purchase in person. Once the technology becomes available, merchants simply need to unlock the capability on their iPhone; no additional hardware is necessary.

Stripe will be the first payment platform to offer Tap to Pay. The fintech will offer the payment technology to its merchant customers via its new Shopify app. Additional payment platforms will be added later this year. “Whether you’re a salesperson at an internet-first retailer or an individual entrepreneur, you can soon accept contactless payments on a device that’s already in your pocket: your iPhone,” said Stripe Chief Business Officer Billy Alvarado. “With Tap to Pay on iPhone, millions of businesses using Stripe can enhance their in-person commerce experience by offering their customers a fast and secure checkout.”

The new payment acceptance tool is a direct competitor to the multiple merchant acceptance solutions that launched over a decade ago, including Block’s Square, which launched its card reading dongle in May of 2010, and PayPal, which launched its contactless QR code payment technology in 2020.

Despite this well-established competition, Apple still has more than a fighting chance to gain traction with Tap to Pay. That’s because not only is it hardware-free, it is also virtually friction-free for customers, and doesn’t require shoppers to download a new app or change their existing habits. Additionally, because it is an Apple product, we can count on it to build a customer-first user interface.

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American Express Launches Digital Checking Account to Compete with Challenger Banks

American Express Launches Digital Checking Account to Compete with Challenger Banks
By Julie Muhn (@julieschicktanz) Posted on
Categories: Alumni News, Alumni profile, American Express, Daily news
  • American Express is launching a new, digital checking account called Amex Rewards Checking
  • The Amex Rewards Checking account will offer a 0.50% high-yield APY on account balances, along with other membership rewards
  • The new checking account is only open to primary American Express credit cardholders and is limited to individual users.

Financial services giant American Express is expanding its horizons into the crowded world of digital checking. The company is launching Amex Rewards Checking, an all-digital consumer checking account, for eligible U.S. card members.

As an incumbent player, American Express has multiple advantages over the many smaller digital challenger upstarts that have launched in the past two years. That’s because not only does the New York-based firm have credibility and a pre-existing large customer base, it also comes with a reputation for its rewards and perks.

“Our Members want more banking products and services from us,” said American Express Executive Vice President and General Manager of Consumer Banking Eva Reda. “And they want more from their checking account, without giving up the benefits that are important to them. That’s why we built Amex Rewards Checking to deliver more value for Members with the powerful and trusted backing of American Express. It’s digital checking without compromises.”

The checking account product will be a draw to Millennial and Gen Z users, who look for banking products with incentives and rewards. In fact, according to a study from Amex, 35% of consumers rank rewards and offers at the top when considering opening a new account. Given this, Amex packed competitive features into its new checking account. Accountholders can:

  • Earn 0.50% high-yield APY on their account balance, which is 10x higher than the national rate
  • Gain one Membership Rewards point for every $2 spent on eligible debit card purchases. Users can redeem these points for deposits into their Amex checking account
  • Pay no monthly maintenance fees or minimum balance fees
  • Receive purchase protection for accidental damage or theft on eligible purchases
  • Access Amex’s customer care providers 24/7 via phone or chat
  • Receive fraud protection and monitoring
  • Make fee-free ATM withdrawals at 37,000 MoneyPass ATM locations

The new Rewards Checking account is only open to primary American Express credit cardholders who have had their account for more than three months. Currently, the new checking account is limited to individuals and cannot accommodate joint accounts.

The new Amex Rewards Checking is American Express’ first checking account for retail customers. The financial services giant has offered small business checking for a little over a year now. The company acquired Kabbage in 2020 for $850 million and leveraged the purchase to launch a small business checking offering in 2021. That said, it’s worth noting that Amex’s new debit card is not available to its small business checking customers.

American Express, which presented at our developers conference in 2015, is listed on the New York Stock Exchange under the ticker AXP. The company saw $36 billion in revenue in 2020 and has a market capitalization of $149 billion. Stephen Squeri is CEO.

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Wirex Expands to the U.S.

Wirex Expands to the U.S.
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news
  • Wirex, which has 4.5 million users across Europe and Asia, launched its crypto-to-fiat services in the U.S. today to all U.S. users, except those in New York and Hawaii
  • The company is partnering with Zero Hash, Checkout.com, Visa, and Sutton Bank for the distribution of its crypto-enabled debit card
  • The launch comes 18 months after Wirex received its first money transmission license in the U.S.

Remember in 2020 when we wrote that Wirex was “inching” toward a U.S. launch? Well, the slow crawl is over; the cryptocurrency payments platform announced it has officially expanded its services to the U.S.

Wirex’s platform, which enables users to buy, store, exchange, and spend fiat currency and more than 37 cryptocurrencies, is leveraging partnerships with Zero Hash, Checkout.com, Visa, and Sutton Bank to distribute its crypto-enabled debit card to American users. The London-based company is expanding beyond the EEA and APAC regions, where it already serves 4.5 million users.

“U.S. users have been demanding an alternative to traditional forms of payments that are antiquated, slow and non-transparent, and that’s where Wirex steps in,” said Wirex USA Managing Director Harold Montgomery. “We’re known for upholding regulatory and licensing standards where required, and applying industry-best practices where regulations don’t yet exist. American customers can expect the same level of compliance.”

Founded in 2014, Wirex’s app links to a Visa debit card that allows customers to spend their cryptocurrency online and in-store at over 61 million locations. Additionally, the company offers free domestic and international ATM withdrawals, no annual fee, zero exchange fees, near instant crypto transactions, live transaction notifications, and the ability to instantly top up via their debit card with zero fees.

Today’s launch comes 18 months after the company received its first money transmission license in the U.S. from the State of Georgia Department of Banking and Finance. Starting today, Wirex’s services are available to users in all states except New York and Hawaii. The company said it will launch in those regions later this year.

In December of last year, Wirex launched its non-custodial wallet, an app within the Wirex ecosystem that serves as a secure way for users to send, store, and receive digital assets. Earlier that month, Wirex invested five billion Wirex Tokens in a new, cross-chain DeFi lending protocol called Nereus.

Wirex has almost $8 million in funding. Pavel Matveev is CEO.

Photo by Ewan Kennedy on Unsplash

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Pillow Raises $3 Million for its DeFi Investment Platform

Pillow Raises $3 Million for its DeFi Investment Platform
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news, Funding
  • DeFi investment startup Pillow raised $3 million in Seed funding
  • The company will use the funds to fuel global expansion, build its investment strategies, and grow its user base
  • “We want to create a future where accessibility to decentralized finance is democratized,” said company founders

Pillow, a platform that invests in curated DeFi strategies, landed $3 million in funding this week in its first-ever investment round. The Seed round was led by Elevation Capital and a group of crypto angels. Pillow will use the funds to build out DeFi strategies, accelerate global expansion, build up its community of users, and grow the Pillow brand to reach a global audience.

Pillow was founded in 2021 to offer its users an accessible way to earn market-beating interest rates on a range of crypto holdings– including $USDC, $USDT, $BTC, and $ETH– without needing to be experts in the space. “We believe the next big unlock in Web 3.0 is going to come from significantly improving user experiences,” said Elevation Capital Principal Vaas Bhaskar. “Pillow fits right into that theme by abstracting away the complexities of DeFi – and hence making it more accessible.”

To remove the complexity, Pillow’s investment strategies are curated and actively managed. Additionally, the company offers 1-click investing with the potential of high yields and without transaction fees (known in the crypto world as gas fees) and underlying chains and tokens.

“We want to create a future where accessibility to decentralized finance is democratized, if not more than traditional finance. We’re fulfilling this vision by letting our users gain access to DeFi yield opportunities in a simple, safe, and secure manner,” said Pillow founders Arindam Roy, Rajath KM, and Kartik Mishra. “Our users have shown unequivocal faith in our platform in our private access program, and we’re on track to scale this to new heights. We’re grateful for the mentorship and guidance of Elevation Capital as we scale, along with some of the best builders in the Web 3.0 space … We’re elated to have the ecosystem rally behind us as we build our platform and community.”

Though decentralized finance seemed like a futuristic vision of the financial world in 2020, progress toward a decentralized world is quickly picking up steam. The total locked value in decentralized assets has gone from around $20 billion at the start of last year to around $250 billion this year. Additionally, last January, the U.S. Office of the Comptroller of the Currency (OCC) gave the green light to allow banks to use stablecoins. And many countries have either launched, piloted, or are in the process of planning their own bank-issued digital currency (including the U.S. Federal Reserve, which issued a discussion paper on central bank digital currencies last week).

Photo by Ivan Samkov from Pexels

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ConsenSys Acquires MyCrypto to Improve its Web3 Wallet

ConsenSys Acquires MyCrypto to Improve its Web3 Wallet
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news
  • Blockchain technology company ConsenSys is acquiring MyCrypto
  • ConsenSys will combine MyCrypto’s tech with its own Web3 wallet, MetaMask
  • Financial terms of the deal were undisclosed

Blockchain technology firm ConsenSys made its seventh acquisition today. The Switzerland-based company is buying Ethereum interface MyCrypto, a California-based startup that helps users manage and store their crypto assets.

Specifically, ConsenSys will combine its Web3 wallet, MetaMask, with MyCrypto to improve security and standardize the user experience across desktop, mobile, extension, and browser wallets. MyCrypto launched in 2015 to help users unify their Ethereum accounts. Founded one year later, MetaMask offers its 21 million monthly active users a non-custodial crypto wallet for mobile and browser extensions.

“I think we’ll be able to provide a wallet experience that is much more able to help its users make the best decisions through this rapidly evolving Web3 wallet landscape,” said MetaMask Co-founder Dan Finlay.

The MyCrypto and MetaMask teams have collaborated since 2016. The groups have teamed up to educate the customers on security best practices and have helped integrate and maintain MetaMask’s phishing detection service. User security and education will continue to be a major priority. Moving forward, MyCrypto and MetaMask aim to prioritize user security and education.

“With the rapid growth of the ecosystem and products racing to ship slick features, it is imperative that the leading wallet continues to build foundational and secure self-custody tools that empower the user,” said MyCrypto CEO and Co-founder Taylor Monahan. “Combining our years of experience and shared values allows us to accelerate our mission of providing a way for users to fully realize their self-sovereignty.”

ConsenSys plans to eventually merge the MetaMask and MyCrypto features and brands. For now, however, they will operate independently. MetaMask Co-founders Dan Finlay and Aaron Davis, will lead the unified Desktop, Mobile, Extension, and Browser product offerings alongside MyCrypto founder Taylor Monahan. MyCrypto’s team of 12 employees will join ConsenSys.

Photo by Lukas from Pexels

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5 Reasons to Come to FinovateEurope This Year

5 Reasons to Come to FinovateEurope This Year
By Julie Muhn (@julieschicktanz) Posted on
Categories: FinovateEurope 2022, List series

If you’re already registered for FinovateEurope, taking place the 22nd and 23rd of March, you get it. Attending the industry’s premier demo show, whether in-person or digitally, grants you access to the best minds in fintech. Not only this, but also the depth and variety of content will set you up to make the best partnerships and crush the competition in 2022.

But regardless of whether you’re a die-hard Finovate fan who is coming to the event or if you’re simply curious to see what the event is all about, here are five reasons you need to be there.

Live and in person (plus a digital option)

We held our first in-person event since the pandemic last fall and we are thrilled to continue in-person events this year, as well. Seeing industry colleagues not only energizes us, it also offers room for spontaneous interactions that simply are not possible via video.

That said, if you’re not able to attend physically, we have a digital option for almost all of the content. In fact, we even have a bonus, digital-only day on March 15 that will feature a keynote, a fireside chat, and a power panel.

Sustainable approach

We are committed to running events which are both environmentally sustainable and socially responsible. Under our new FasterForward approach, we have embarked on a series of activities and commitments to ensure our events become more sustainable while also helping our partners and customers achieve the same. Specifically, we are aiming to become carbon neutral across our events by 2025, cut the waste generated through our events in half by 2025, and embed sustainability inside 100% of our events by 2025.

Speaker lineup

You won’t want to miss hearing our lineup of experts take the stage! We’ll have two full days of content plus the opportunity to network with some of the top names in fintech, including Chris Skinner, CEO of The Finanser; Louise Beaumont, Chair of the Open Finance and Payments Working Group at techUK; Olivier Guilaumond, Global Head of ING Labs and FinTechs at ING; and more. Be part of our audience to see the future of finance first.

You, our audience

When it comes down to what truly makes our shows great, it’s you, our audience. Fortunately, our agenda has a lot of built-in opportunities to network with your best fintech friends, meet new ones, and hold meetings crucial to your firm’s operations.

This year, we’ll host two special networking sessions, including a Women in Fintech Executive Boardroom presentation on Tuesday and an Ask Me Anything Q&A session with Inma Martinez, Author of The Fifth Industrial Revolution.

We’re back in London

After hosting FinovateEurope in Berlin in 2020 (just days before the pandemic hit), we’re headed back to London, our flagship location for FinovateEurope. This year’s event will take place at the Intercontinental O2, a new location for us. The expansive venue will offer us plenty of elbow room and is minutes from Canary Wharf, the headquarters location for many fintech startups.

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Monzo Officially Launches in the U.S.

Monzo Officially Launches in the U.S.
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news

U.K. digital bank Monzo is officially entering the U.S. market this week. The startup announced it’s now allowing U.S. clients to apply for a Monzo account.

Monzo has been in closed beta for the past 18 months, during which time it has onboarded thousands of new U.S. customers, processed millions of dollars of transactions, and gathered user feedback.

The company has launched new features inspired by this feedback, one of which is a salary sorter. This tool that helps users divide their paycheck, separating their spending, savings, and bills once their paycheck is received.

This week’s news comes after Monzo withdrew its U.S. banking license application last October. “While this isn’t the outcome we initially set out to achieve, this allows us to build and scale our early-stage product offer in the U.S. through existing partners and invest further in the U.K.,” a Monzo spokesperson told CNBC last year. “We have big ambitions for Monzo U.S. There are many routes to market we’re exploring that have been successful for other market entrants who are now major players.”

One of those “routes” is a partnership with a traditional bank based in the U.S. While Monzo is a fully licensed bank in the U.K., the startup is partnering with Ohio-based Sutton Bank to provide its U.S. accounts. Sutton will hold user deposits and provide protection with FDIC insurance.

Monzo was founded in 2015 and seeks to be a hub for users to manage their entire financial lives via its mobile app. In addition to financial management and budgeting, Monzo also offers a Mastercard debit card with no overdraft fees, no minimum balance, and no foreign exchange fees.

The digital bank has five million U.K. customers. This number is small when compared to competitor Revolut, which counts more than 14.5 million users. However, Monzo U.S. Product Manager Thomas George noted that it’s not just about the number. “We don’t believe it’s possible to build a globally impactful company without considering the impact we have on the communities we serve,” George said. “Too many people around the world lack access to vital banking services. So we’re also working to improve financial inclusion, support customers in vulnerable circumstances, and play our part in creating a more just society.”

Photo by frank mckenna on Unsplash

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BNPL Player Amount Acquires Linear Financial Technologies

BNPL Player Amount Acquires Linear Financial Technologies
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news, Mergers & Acquisitions

Modern banking experiences provider Amount has acquired SMB loan and account origination platform Linear Financial Technologies for $175 million.

Founded last February, Linear offers financial services organizations a set of tools to help create a smooth customer experience. The Virginia-based startup provides a digital originations and servicing platform for credit cards, loans, and deposit accounts to help companies optimize the experience for their customers. Linear’s clients include Citizens Bank, PNC Bank, Fifth Third Bank, Bank of the West, and American Express.

Amount, a three-year-old company based in Illinois, helps financial services companies digitize their infrastructure to keep up with the rapid pace of technological change. The company’s modular approach offers firms their choice of embedded finance tools, including omni-channel account opening, credit cards, loans deposits, buy now pay later (BNPL), and more.

“In Linear, we saw an opportunity to pair Amount’s consumer banking solution and buy now, pay later technology with Linear’s small business banking solutions to help financial institutions simplify and streamline business processes to create new business opportunities and increase value for our clients,” said Amount CEO Adam Hughes. “We admire what Sam and his team have built at Linear, especially as we share many of the same values when it comes to developing technology, with a heavy focus on bringing data and insights to the forefront, to improve customer experiences, business processes, and risk management. I’m excited to welcome the Linear team to Amount and look forward to working beside them to expand Amount’s product set.”

After the deal is finalized, Linear will rebrand and operate as Amount Small Business. Linear CEO Sam Graziano will join Amount’s executive team and become Head of Amount Small Business. Combining the two companies will boost Amount’s employees to almost 600. The firm will maintain offices in New York City, New York; Reston, Virginia; Chicago, Illinois; and Los Angeles, California. 

Today’s announcement comes four months after Amount partnered with Marqeta to help banks enter the BNPL space. The company, whose bank clients collectively manage just over $3.1 trillion in assets and serve more than 50 million U.S. customers, was valued at over $1 billion after a $100 million Series D funding round last May.

The BNPL space flooded with new players last year. This influx of new companies, plus the pressure from incumbent financial services firms such as Goldman Sachs offering BNPL solutions, has made competition in the credit card alternative space hotter than ever. Today’s merger will offer Amount a better competitive advantage against established BNPL players such as Klarna, AfterPay, Affirm, and Sezzle. As the BNPL market begins to mature, we can expect to see much more merger and acquisition activity in 2022.

Photo by Anika Huizinga on Unsplash

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Expensify Launches Payment Card for CPAs and Accounting Firms

Expensify Launches Payment Card for CPAs and Accounting Firms
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news, Expensify

Expense management firm Expensify has come out with its first product since making its debut on the public markets last year. The California-based company debuted a corporate payment card designed specifically for CPAs and accounting firms.

The Expensify CPA card comes with a high credit limit and doesn’t require a credit check or personal guarantee. The card continuously reconciles between Expensify and QuickBooks, Xero, Sage Intacct, and NetSuite. This real-time reconciliation offers administrators an up-to-date picture of company financials.

Expensify Founder and CEO David Barrett explained why the new CPA card was a timely offering from his company. “Expensify is already used by nearly half of the top 100 CPA firms in the U.S.,” Barrett said. “We used that expertise and experience to build the first card program that caters directly to the accounting profession and their clients.”

CPA-specific features of the new card include free American Institute of Certified Public Accountants membership, free CPA certification renewal, free CPE credit reimbursement, free access to three CPE credits with ExpensifyApproved! University, and free Expensify CPA Cards for both their firm and clients. Cardholders will also receive access to a team to help with high-level strategy, client onboarding, and training.

There is no information on the cost of the new card. However, cardholders receive a discount for signing up their clients. Firms that have 21 to 1,000 clients who are monthly active users receive anywhere from 15% to 30% off.

Expensify was founded in 2008 with a flagship receipt-scanning app and a simple motto, “Expense reports that don’t suck!” Since then, the company has launched a corporate payment card, offered a COVID-friendly virtual travel assistant, and expanded into billpay. In November of last year, Expensify went public on the NASDAQ under the ticker EXFY. The company has a current market capitalization of $2.1 billion.

Photo by MART PRODUCTION from Pexels

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Routefusion Raises $10.5 Million to Help Give Fintechs Cross-Border Superpowers

Routefusion Raises $10.5 Million to Help Give Fintechs Cross-Border Superpowers
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news, Funding

Earlier this week Routefusion, a company that helps financial services companies with global expansion, raised $10.5 million. The Seed round was co-led by Canvas Ventures and Silverton Partners. Haymaker Ventures, Initialized Capital, Sherwin Gandi, and Aldrin Clement also participated.

The new capital boosts Routefusion’s total funding to over $14 million. The company will use the funds to grow its team and to expand its operations in new markets, specifically in Latin America and Africa, two regions poised for growth. Adding the two new regions will extend Routefusion’s reach to more than 180 countries and more than 150 currencies.

Routefusion was founded in 2018 and helps small to mid-sized fintech companies expand their operations internationally in order to compete with traditional financial institutions and large financial services giants. The Texas-based company offers customers access to more than a dozen different banking and foreign exchange providers. Routefusion’s customers include Synapse, Jeeves, Novel, PaymentLabs, and Wyre.

“Gone are the days when go-to-market meant a domestic launch in one market. Today’s most ambitious fintech companies know that in order to win big, they must launch globally,” said Routefusion Cofounder and CEO Colton Seal. “We understand how to expand a company’s product and financial infrastructure, eliminating the obstacles associated with international payments and banking operations. With Routefusion, companies can embrace the global economy and scale across borders and oceans.”

As competition heats up in the digital alternative banking space, cross-border payments are only expected to grow. In fact, they are estimated to total $156 trillion by next year. Routefusion echoes this growth. The company has experienced a 200% growth in customers and a more than 5000% revenue growth in the past 11 months.

Photo by TK on Unsplash

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What The U.S. Federal Reserve Omits in its CBDC Paper

What The U.S. Federal Reserve Omits in its CBDC Paper
By Julie Muhn (@julieschicktanz) Posted on
Categories: Thought Leadership

The U.S. Federal Reserve has issued a discussion paper today on central bank digital currencies (CBDCs). The paper is meant to serve as the first step in a public discussion about CBDCs between the Federal Reserve and stakeholders.

The documentation offers a basic background on what CBDCs are and how they may impact citizens. As a part of the discussion, the paper depicts potential benefits and risks of implementing a CBDC. Specifically, the Fed cites the following:

Benefits

  • Safely Meet Future Needs and Demands for Payment Services
  • Improvements to Cross-Border Payments
  • Support the Dollar’s International Role
  • Financial Inclusion
  • Extend Public Access to Safe Central Bank Money

Risks

  • Changes to Financial-Sector Market Structure
  • Safety and Stability of the Financial System
  • Efficacy of Monetary Policy Implementation
  • Privacy and Data Protection and the Prevention of Financial Crimes
  • Operational Resilience and Cybersecurity

Ultimately, the 35 page document leaves out a key issue when it comes to CBDCs: governmental control. A government-issued CBDC would allow the government to dictate how, where, and when currency holders spend their funds. As an example, consider unemployment money issued in the form of a CBDC. The government could restrict the funds to not work at businesses categorized as liquor stores or bars.

Restrictions such as these aren’t necessarily a bad thing. In some cases, giving the government control over government-issued funds makes a lot of sense. In fact, it is even common practice in programs such as WIC, which offers low income mothers access to healthy foods.

However, if there’s one thing Americans love, it’s freedom. And if citizens receive their paycheck in the form of a CBDC, it’s likely they won’t want the government to control their spending. When it comes to monitoring citizens’ spending of CBDCs, however, the Fed did note the risk of balancing privacy with the need to prevent financial crimes. Under the Potential risks section, the paper states, “Any CBDC would need to strike an appropriate balance between safeguarding consumer privacy rights and affording the transparency necessary to deter criminal activity.”

The purpose of the paper is to essentially open up the discussion of CBDCs with the American people. While the Fed makes it clear it may not necessarily proceed with issuing a CBDC, it proposes 22 questions to readers in an effort to gather comments from all stakeholders. If you’re interested, you have until May 20, 2022 to submit your thoughts.

While the concept of CBDCs is fairly new in the financial services world, the conversation around the new form of cryptocurrencies is being taken quite seriously. At the moment, 90 countries are currently exploring or launching their own CBDC. In fact, TechCrunch reported earlier this week that China’s digital Yuan wallet now has 260 million users.

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Plaid Acquires Cognito

Plaid Acquires Cognito
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news, Mergers & Acquisitions, Plaid

Open finance network Plaid is snapping up identity verification and compliance platform Cognito in a deal valued around $250 million.

Plaid’s “next major step” as a company is to help developers build onboarding experiences. And because identity is a huge piece in the onboarding process, Cognito’s technology will be key in the launch of the new tool. “This means simplifying every step of the consumer journey from their first interaction during signup, to the first magical moment delivered by that product – the first time sending money to a friend, or the first time trading a stock or cryptocurrency,” Plaid CEO Zach Perret said in a blog post.

Perret cited identity verification, account connection, and account funding as three parts of a complete onboarding experience. Currently, Plaid’s technology takes care of the latter two pieces but is missing identity verification technology. According to TechCrunch, Cognito’s technology will be available to Plaid’s 5,500 clients as an optional add-on. Plaid’s services range from a free option to a package that costs north of $500 per month.

Cognito’s technology verifies user identity by connecting their phone number with their traditional identity data such as name, date of birth, address, and social security number. The California-based company also helps businesses stay compliant by managing and automating their anti-money laundering and politically exposed person screening. Since it was founded in 2014, Cognito has verified 76 million users for 300 clients including Affirm, Brex, and Current.

Today’s news is another signal of expansion for Plaid, which partnered with Dwolla, Square, Checkout.com, Currencycloud, and Marqeta last October to move into account-to-account payments.

With $734 million in funding, Plaid helps 11,000+ FIs offer their customers access to third party financial services via a suite of APIs to connect consumers, financial institutions, and developers. Plaid also offers a suite of analytics products that provides further insights into transactions. The company was founded in 2013 and is headquartered in San Francisco, California.

Photo by Edilson Borges on Unsplash

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