Klarna Adds Online Trip Planning with Inspirock Acquisition

Klarna Adds Online Trip Planning with Inspirock Acquisition
By Julie Muhn (@julieschicktanz) Posted on
Categories: Alumni News, Daily news, Klarna, Mergers & Acquisitions

Does COVID have you dreaming up your long-awaited vacation? Consumer payment services firm Klarna’s latest acquisition may be of help.

The Sweden-based company snapped up Inspirock, an online trip planning service, for an undisclosed amount. Klarna CEO and Co-Founder Sebastian Siemiatkowski described the addition of travel planning “a natural extension of the benefits Klarna brings to payments and shopping.”

Founded in 2012, Inspirock leverages AI to help its customers explore a destination’s offerings and create personalized itineraries utilizing local expertise. On an annual basis, the California-based company sees 25+ million customers each year.

The integration will allow Klarna’s 90 million customers to use the Klarna app to pay for a trip in installments. In addition to the payment aspect, Klarna will also help users plan for their trip. Inspirock matches travelers’ preferences with over 230 million data points to optimize their travel itinerary and discover hidden gems.

“For customers, this makes the whole journey from inspiration to planning and preparing for a trip simpler, less stressful, and more fun, while enabling our retail partners to better reach and engage with their audiences by offering more personalized content,” said Siemiatkowski.

Combining travel planning with its existing payment capabilities inches Klarna towards becoming more like a super app. Founded in 2005 and with $3.7 billion in funding, Klarna offers buy now, pay later options to help users avoid credit cards while enjoying payment flexibility. Klarna also offers a shopping app to provide users with a holistic shopping experience– from payments to shipment tracking– and a rewards club it describes as the “vibeyest community in shopping.”

Photo by JESHOOTS.COM on Unsplash

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A Look at the Fintech Unicorns of Southeast Asia

A Look at the Fintech Unicorns of Southeast Asia
By David Penn Posted on
Categories: Finovate Global

This week’s Finovate Global List Series feature takes a look at the roster of Southeastern Asia-based technology unicorns compiled by Credit Suisse’s ASEAN research team in a recent report to see how many of these 35 billion-plus valuation companies are fintech firms.

“The number of unicorns in ASEAN has continued to increase over the last two to three years, now adding up to 35 unicorns,” the report authors noted. Scaling New Heights: ASEAN’s 35 Unicorns reveals that Singapore and Indonesia are home to the lion’s share of the region’s unicorns and that fintech represents the most common sector, followed by e-commerce.

In terms of factors fueling the growth of these firms, the report highlights the role of private equity/venture capital funding, strong demographics – particularly populations with a high number of citizens under the age of 34 – and supportive regulations. The report also underscored the role of COVID-19 in stimulating innovation: “Fintech is still relatively nascent given that 25% to 50% of the region’s adult population remains underbanked or unbanked, but the COVID-19 pandemic has accelerated the adoption of digital financial services.”

Read the full report here. In the meanwhile, here is our look at the fintech unicorns from Credit Suisse’s ASEAN unicorn roundup.

Indonesia

  • Akulaku: a banking and digital finance platform providing digital banking, consumer credit, digital investment, and insurance brokerage services to underserved consumers in Indonesia, the Philippines, Vietnam, and Malaysia.
  • OVO: a digital payment service, headquartered in Jakarta, that offers one of the biggest e-wallets in Indonesia.
  • Xendit: an end-to-end digital payments solution provider for small businesses and large enterprises alike.

The Philippines

  • Mynt: a fintech partnership between Globe Telecom, the Ayala Corporation, and Ant Financial focused on payments, remittances, loans, business solutions, and platforms.

Singapore

  • Advance Intelligence Group: an AI-driven technology parent company offering buy now pay later services, digital lending, and e-commerce products and services.
  • Matrixport: a digital assets and financial services platform that supports investing and trading in cryptocurrencies.
  • NIUM: an international payments platform for cross-border payments, local accounts, and card issuance.

Thailand

  • Ascend Money: a digital payments and financial services company providing wealth management, lending, and insurance products to 50 million users in six countries in Southeast Asia.

Vietnam

  • Vietnam Payment Solution (VNPAY): a Hanoi-based electronic payments solution provider offering mobile banking, phone recharge, and billpay for banks, e-commerce businesses, and telecoms.

Not included in our round-up are a handful of companies characterized by Credit Suisse ASEAN Research as “e-commerce” or “real estate tech.” These firms include Blibli and JD.ID of Indonesia, Carsome of Malaysia, and Carousell, Carro, Lazada, and Moglix of Singapore among the e-commerce unicorns. The region’s real estate technology unicorns featured include Singapore’s JustCo and PropertyGuru.

Here is our look at fintech innovation around the world.

Asia-Pacific

Sub-Saharan Africa

Central and Eastern Europe

Middle East and Northern Africa

Central and Southern Asia

Latin America and the Caribbean

Photo by Arnie Chou from Pexels

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Finovate is Bound for London in 2022

Finovate is Bound for London in 2022
By Heather Stowell Posted on
Categories: Finovate Marketing, FinovateEurope 2022

Two years since the last in-person event, FinovateEurope returns to London over March 22-23, 2022. Book your ticket at early-bird rates or consider these options for joining the 12th annual European event.

New for 2022, there are two demo opportunities for FinovateEurope: digital and physical.

We’ll kick off on Tuesday, March 15 with a digital day featuring a limited number of virtual demos. Attendees will tune in through the ConnectMe event platform for live streaming and networking. Plus, the demos will be available on demand throughout the event. 

On March 22, a second lineup of companies will demo in person at the venue. These demos will also be streamed to our virtual audience. 

Digital Demo: March 15  

– Prerecorded 7-minute demo streamed on March 15
– Event platform and networking app access to chat and schedule meetings with attendees
– Lead reports of demo views through the event platform and in the venue’s streaming lounge
– 30-minute one-on-one coaching for demo skills and format
– Video of your demo for your own use
– Demo video hosted on Finovate.com with 380,000+ visitors/year
– Chance to win the coveted Best of Show award
– And more!

APPLY TO DEMO DIGITALLY

In-Person Demo: March 22  

– 7-minute demo at the venue during the general session on March 22
– Physical demo stand in the exhibition hall on March 22-23 + lead report of scanned attendees
– Event platform and networking app access to chat and schedule meetings with attendees
– Lead reports of digital and physical demo views
– Video of your demo for your own use
– Demo video hosted on Finovate.com with 380,000+ visitors/year
– Chance to win the coveted Best of Show award
– And more!

APPLY TO DEMO IN PERSON

For full package details, click here. 

Demo pricing varies by demo type, application date, and company category. Fees range from $2,795 USD to $19,995 USD — more details here.

Not ready to demo, yet? Join the Startup Booster program.

Startup Booster is designed for new startups seeking exposure, insights, and connections at Finovate events, but who are not ready to demo yet. There are two Startup Booster opportunities depending on your company’s goals for FinovateEurope 2022.

Participation in both is for fintech and tech startups who are less than 3 years old and have raised less than $1M USD. The Advanced Booster is limited to founders.

Startup Booster: £499  

– Event access at special discounted rate (£499 per ticket)
– Event content + networking*
– Event attendees with unlimited meetings and chat
– Breakfast, lunch and networking refreshments
– Startup profile on the event website  

Advanced Booster: £1,000  

– Startup Booster package plus:
– 3-minute pitch video on event platform, marketed and shared with investor attendees
– Virtual booth on the event platform for attendees to contact founders
– Lead reports from the event platform (pitch video views, virtual booth visitors)
– Access to the Investor Networking Reception on March 22  

Apply to the Startup Booster!

Take advantage of these opportunity to make connections with hundreds of the most influential people in fintech and apply as soon as possible. For questions, email heather@finovate.com.

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Conversations from FinovateFall: The Road to Collaborative Banking with ASA Head of Fintech Relationships Ryan Ruff

Conversations from FinovateFall: The Road to Collaborative Banking with ASA Head of Fintech Relationships Ryan Ruff
By David Penn Posted on
Categories: ASA, FinovateFall 2021, Speaker series

At FinovateFall we had a number of conversations with fintech professionals on the challenges of forging successful fintech partnerships. One of the more illuminating discussions we had was with Ryan Ruff, Head of Fintech Relationships with ASA Technologies, who discussed his company’s unique approach to helping fintechs and financial institutions build more constructive collaborations.

As both a fintech executive and a fintech founder, Ruff has a unique understanding of the challenges that fintechs and financial institutions often face when trying to work together. In our discussion at FinovateFall, he explained what some of those pain points are and how ASA Technologies’ platform enables both parties – fintechs and financial institutions – to maximize their interaction with each other, minimize inevitable risks, and focus on core competencies.

On the challenges financial institutions and fintechs face when trying to forge meaningful partnerships.

One of the things we’ve noticed is that everyone understands banking-as-a-service. What that really (represents) is a relationship between one fintech and one financial institution. And there’s a lot of risk there. On the financial institution side, they are asking the question: is this fintech really going to succeed? Do they have the capital? Are they PCI compliant? SOC-2 compliant? There’s a lot of risk in that relationship.

What we do is (offer) a contractual agreement where one financial institution enters into a partnership with all of the fintechs (on our platform), so that if one of them fails, it’s not that big of a deal because there are more coming and there are others on the platform, so it takes away that risk of partnering.

On the other side, the fintechs, when they get on to our platform, they are now partnering with all of the financial institutions, so they can go and find the ones that are most conducive to their clients and can send all their clients to that institution.

On the importance of building understanding and trust among all parties

It’s important that the technology piece is secure, that it’s being done in a compliant way … that’s very important and we work on that. But it’s also important that the revenue models work for both parties as well. (For example) if a fintech has a lead for a banking service like a home loan or a car loan or a student loan, they can send that back to the ASA platform, where the customer is actually a client for the institution. That institution gets to do that loan and then the referral fee goes back to the fintech that provided the referral. So both sides are making money, and they are able to stay in their core competencies and really work at scaling their core value propositions.

What makes a fintech special is that it’s a niche application. It’s something that’s going to help a specific user. Ironically, when you try to go partner with a financial institution, they are looking at it and saying I don’t know if this is going to affect a big enough segment of our user base, so I don’t know if it’s worth doing the partnership. The very thing that makes your fintech special, is what makes it hard to partner.

Now in (our) model, the financial institution is not just getting this one fintech that gets one sliver, they’re getting all the fintechs (which will) hit a much wider base collectively. So it makes more sense for both parties when you’re doing it “multiple (fintechs) to multiple (financial institutions).”

On the way that the current social and economic climate has impacted the work ASA does

It’s made the need for what we do even greater. People are changing what they need out of a bank, and they’re changing what they need out of a fintech because our world is changing. We’re trying to come into a new normal right now that a lot of people don’t understand, and wonder what the future is going to look like. We’ve got a platform where people can build those user experiences really quickly, get them to scale, and get them to market quicker than ever before. So really this moment brings an opportunity for our institutions and our fintechs to be able to collaborate together quickly to build those experiences that people are going to want in this new environment that we’ve all been thrown into.

Check out the rest of our conversation with Ryan Ruff from FinovateFall 2021 on creating successful fintech partnerships – and the importance of moving beyond open banking to what he calls “collaborative banking.”

Photo by James Lee from Pexels

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UpEquity Lands $50 Million to Help Home Buyers Make All-Cash Offers

UpEquity Lands $50 Million to Help Home Buyers Make All-Cash Offers
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news, Funding

Mortgagetech player UpEquity landed $50 million this week to help democratize home buying. The investment brings the Texas-based company’s total funding to $76.7 million in combined debt and equity.

The Series B round, which consisted of $20 million in equity and $30 million in debt, was led by 3 Ventures with participation from Next Coast Ventures, BP Capital Management, Alumni Ventures, Gaingels, Launchpad Capital, and Early Light Ventures.

UpEquity was founded in 2019 and, simply put, is a digital mortgage provider. The company offers three main products for potential homebuyers. Buy with Cash helps average homebuyers make all-cash offers on a home, Buy Before You Sell enables buyers to purchase a new home before selling their current one, and UpEquity’s third solution enables homeowners to refinance their existing mortgage.

For the end consumers, the cost of getting a mortgage from UpEquity is similar to costs they would incur with a traditional mortgage lender. UpEquity aims to compete by not only helping buyers make an all-cash offer, but also by doing so quickly. UpEquity’s average time-to-close is 18 days.

“At the end of the day, our vision is to create equal access to the American dream through frictionless, on-demand homebuying, and it starts with bringing technology into the underwriting process,” said UpEquity Co-Founder and CEO Tim Herman. “By removing cost and inefficiencies from the mortgage process, our customers can make all-cash offers at zero cost to them and still get access to competitive interest rates. They get the best of both worlds.”

UpEquity is part of a newly emerging set of companies called Power Buyers that purchase a home on a buyer’s behalf using cash, then sell it back to them using a traditional mortgage. Rivals in this space include Knock, Homeward, Orchard, and Blend. Like these players, UpEquity makes money on interest paid on the mortgage and commissions from reselling loans.

UpEquity’s revenue has grown 500% year-over-year. The company anticipates it will originate more than $1 billion in mortgages over the next 12 months.

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Goldman Sachs and American Express Collaborate on a Cloud-based Corporate Payments

Goldman Sachs and American Express Collaborate on a Cloud-based Corporate Payments
By David Penn Posted on
Categories: American Express, Daily news

A partnership between Goldman Sachs and American Express will give corporate clients the ability to leverage a cloud-based payment service that supports multiple payment options and provides data and analytics in a single, integrated platform.

“A major pain point for our large commercial card clients is managing multiple platforms and myriad time-consuming, costly and complex processes to make, track, and reconcile thousands of payment transactions every day,” American Express EVP of Global Commercial Services Dean Henry explained. He said that the partnership would help drive modernization in B2B payment operations, “setting a new standard in transaction banking for big business by offering access to faster payments and real-time tracking that can increase efficiency and reduce costs.”

The partnership will embed AMEX’s virtual cards into Goldman Sachs’ Transaction Banking platform, TxB, which currently offers ACH, wire, and foreign currency payments. Additionally, the integrated solution will include:

  • A simple “one flow” process that combines both virtual card and non-card payment activity into a holistic set of B2B payment instructions
  • An intelligent payments engine that routes payments into specific payment channels to optimize buyer preferences based on speed and cost
  • Access to spend data and analytics via a dashboard accessible to both buyers and suppliers, including real-time updates on payment status
  • Actionable insights to enable corporate CFOs to make better, more informed decisions

Goldman Sachs launched its Transaction Banking platform in June 2020 in the United States, and extended the service to the U.K. a year later. Since its stateside launch over a year ago, Goldman Sachs has bagged more than 250 clients, realized more than $35 billion in deposits, and processed trillions of dollars through its systems. The TxB platform leverages a set of RESTful APIs to empower clients to create virtual accounts, originate payments and track account activity, as well as review and manage payments from third parties. The technology is geared principally for direct users, such as corporate treasurers, and also serves as a payments and banking-as-a-service platform for Goldman Sachs’ clients to offer their end users.

“As we surveyed our clients we heard consistent feedback that there was scope to improve the cash management and payment processing set of services,” Goldman Sachs Global Co-Head of the Investment Banking Division Jim Esposito said this summer when the technology was launched in the U.K. He underscored the firm’s 150-year track record in financial and risk management experience, adding “we see huge potential to grow this business in the U.K. and globally.”

The new payment service is already available to select clients. General availability is expected in early 2022.

Photo by Scott Webb from Pexels

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Fintech’s First Quantum Computing Startup Secures Seed Funding

Fintech’s First Quantum Computing Startup Secures Seed Funding
By David Penn Posted on
Categories: Daily news, Funding

In a world in which a new enabling technology seems to capture the fintech imagination at least every other year, quantum computing remains relatively elusive. The promise of being able to leverage quantum computations to accomplish tasks that challenge if not overwhelm current, classical computing technologies is one that, in the area of fintech, has yet to be realized.

Is this about to change? Multiverse Computing, which bills itself as the first quantum computing startup focused on finance, announced this week that it has secured $11.55 million (€10 million) in seed funding. The round was led by JME Ventures and featured participation from a sizable number of investors including Quantonation, EASO Ventures, Inveready, CLAVE Capital, Ikerlan, LKS, Penja Strategy, Seed Gipuzkoa, and Ezten Venture Capital Fund.

“We are a unique company in the quantum computing field,” Multiverse Computing co-founder and CEO Enrique Lizaso said. “While other firms are focused on improving the fundamental hardware and software components of quantum computers, we are keenly focused on leveraging the most advanced quantum devices available now to deliver near-term value for the financial sector.”

Multiverse Computing enables financial professionals to manage complex financial problems such as portfolio optimization and fraud detection. Using the company’s solution, Singularity, users can leverage a simple spreadsheet to run quantum algorithms on any quantum computer without requiring any expertise or experience in programming or working with quantum computers.

Founded in 2019 and headquartered in Basque Country’s San Sebastián, Multiverse Computing enjoys the support of not only its native government, local startup accelerators, and technology centers; but also of institutions like Toronto’s Creative Destruction Lab (CDL). MultiVerse Computing also has forged partnerships with a wide range of technology companies, including IBM, Microsoft, Amazon AWS, Fujitsu, and Quantum Technologies, and said it is collaborating with a number of financial institutions, as well.

“We believe Multiverse Computing will be a global leader in the quantum computing industry,” Lizaso said. “We expect to have annual revenue close to €100 million by 2027 with a staff of 100 people.”

The company plans to use the funding to support its expansion into markets like energy, mobility, and smart manufacturing. The capital will also help fuel Multiverse Computing’s international growth including an office in Toronto and new offices in Paris, France, and Munich, Germany.

Photo by ThisIsEngineering from Pexels

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11 of the Newest Insurtechs in the U.S.

11 of the Newest Insurtechs in the U.S.
By Julie Muhn (@julieschicktanz) Posted on
Categories: List series

Insurtech has already taken off across the globe. What’s more, the fintech subsector is finally beginning to heat up in the U.S. as consumers become increasingly comfortable with digital financial services.

According to CB Insights, fintechs in the insurtech subsector raised $7.4 billion in the first half of this year alone. This figure already surpasses the amount insurtechs raised in all of 2020 by more than $300 million.

The number of new insurtechs driving competition in the space is also growing, so we thought we’d look at some of the newly launched insurtechs in the U.S. this year. Here are 11 of the newest insurtech startups in the U.S.:

ArmadaIQ

  • Leverages AI to insure autonomous vehicles
  • Headquartered in Charlotte, North Carolina

Armadillo

  • Offers home warranty plans designed for digital-first homeowners
  • Headquartered in Clarksville, Indiana

Ascend

  • Provides a modern, all-in-one payments solution that offers a buy now, pay later option for commercial insurance
  • Headquartered in Palo Alto, California
  • Has raised $5.5 million

Limit Financial

  • Operates as a managing general underwriter that specializes in credit insurance and reinsurance solutions
  • Headquartered in Woodcliff Lake, New Jersey

Nirvana Insurance

  • Provides fleet insurance that uses an IoT device to reward safe habits
  • Headquartered in San Francisco, California
  • Has raised $3.2 million

OCHO

  • Helps users in underserved communities build credit by paying their auto insurance
  • Headquartered in San Francisco, California

Oyster

  • Provides personal insurance for everything from bicycles to event insurance to travel insurance
  • Headquartered in New York, New York

Risk Advisor

  • Helps insurance agents advise their clients of their true risk
  • Headquartered in Lexington, South Carolina

SALT Insure

  • Offers agents a home and auto insurance application that helps them close more deals
  • Headquartered in Grapevine, Texas
  • Has raised $250k funding

Shepherd

  • Provides commercial insurance for contractors in the construction industry
  • Headquartered in San Francisco, California
  • Has raised $6.2 million

Stere.io

  • Offers a one-stop-shop for businesses to launch, improve, and grow insurance programs
  • Headquartered in Dover, Delaware
  • Has raised $850k

Photo by Kevin Erdvig on Unsplash

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Currencycloud Taps Plaid to Streamline Account Funding

Currencycloud Taps Plaid to Streamline Account Funding
By Julie Muhn (@julieschicktanz) Posted on
Categories: Alumni News, Currency Cloud, Daily news, Plaid

Global payments platform Currencycloud has teamed up with open finance network Plaid this week. Through the collaboration, the two will offer a joint solution to make it easy for U.K. banks and fintechs to operate in multiple currencies.

The overall objective of the partnership is to reduce friction for Currencycloud customers. Currencycloud will embed Plaid’s Payment Initiation Services (PIS) into its app, allowing customers to pull money directly into their account from any bank without ever leaving the app.

The rollout will begin with customers using the Currencycloud Direct white-label solution, and will later roll out to the entire Currencycloud platform.

“The internet has made business more borderless than ever before, but it is incredibly difficult to move money across countries. Accepting, settling, and converting payments is complicated, expensive, and can take time,” said Plaid Head of European Partnerships Farid Sedjelmaci. “Combining Plaid’s Payment Initiation Services with Currencycloud’s all-inclusive platform for foreign exchange provides a smooth payment experience that obscures all of the complications with online global money movement.”

Prior to the partnership, the only way customers using Currencycloud Direct could top up their account was to leave the app, log into their bank app, and submit the payment. Embedding Plaid’s PIS reduces this friction, streamlining the account funding process.

Currencycloud was founded in 2012 and has since processed more than $100 billion to over 180 countries. The U.K.-based company works with FIs and fintechs including Visa, Dwolla, and Mambu to help them provide cross-border infrastructure solutions to their clients.

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. The company was founded in 2013 and is headquartered in San Francisco, California.

Photo by Jason Leung on Unsplash

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Zopa Raises $304 Million Ahead of IPO

Zopa Raises $304 Million Ahead of IPO
By Julie Muhn (@julieschicktanz) Posted on
Categories: Alumni News, Alumni profile, Daily news, Funding, Zopa

Peer-to-peer lending platform and digital bank Zopa landed $304 million (£220 million) this week. The investment marks Zopa’s largest round to-date, and brings the U.K.-based company’s total funding to $792 million.

According to TechCrunch, today’s funding, which follows a $28 million investment received earlier this year, gives Zopa a post-money valuation of $1 billion (£750 million).

Softbank Vision Fund 2 led the round, which saw contributions from existing investors including Silverstripe, Northzone and Augmentum. Zopa anticipates the cash will help bring its banking tools to more U.K. consumers.

Zopa is on track to hit profitability by early next year. If it does, it will be one of the fastest digital banks in the U.K. to do so. Additionally, if Zopa continues on this path of success, the company is likely to IPO at the end of next year.

Founded in 2004, Zopa debuted its peer-to-peer lending platform at FinovateSpring 2008. The company has since evolved as a player in the challenger banking space. Zopa’s differentiator from competitors, however, is that it is not a fully-fleged bank. The company does not offer a checking account or payment card. Instead, it focuses on savings, loans, and credit-building tools.

Zopa received its banking license in June of 2020. Since transitioning from its flagship peer-to-peer lending model, Zopa has reached $931 million (£675 million) in customer deposits for its savings accounts, has issued 150,000 credit cards, and is now a top 10 credit card issuer in the U.K. based on new customers.

The company’s lending products have also seen success. So far this year, Zopa has disbursed over $8.3 billion (£6 billion) in loans. The company lends over $138 million (£100 million) each year in car loans.

Zopa has formed two recent partnerships that centralize on helping users build and access credit. Its partnership with ClearScore helps provide a pre-approved credit card to Zopa customers who have been declined credit, and its integration with CreditLadder enables renters to build credit by reporting their rental payments.

As for what’s next, Zopa says it is “focused on building a sustainable, profitable business model” that benefits both customers and shareholders.

Photo by Visual Stories || Micheile on Unsplash

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India’s CRED Raises $251 Million for Credit Card Management Platform

India’s CRED Raises $251 Million for Credit Card Management Platform
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news, Funding

CRED, the members-only credit card management platform that rewards users for paying their credit card bills, has landed $251 million in funding this week. The Series E round boosts the India-based company’s total raised to $722 million and increases its valuation to just over $4 billion.

The round was led by existing investors and private equity firms Tiger Global and Falconedge. DST Global, Insight Partners, Coatue, Sofina, RTP, and Dragoneer also contributed. New investors Marshall Wace and Steadfast also joined the round.

CRED, which did not disclose its plans for the investment, launched its online bill payment platform in 2018. The company incentivizes its 7.5 million members to pay their bills on time to improve their credit score. If the user pays on time, CRED sends them CRED Coins they can use to earn rewards or receive access to curated products and experiences.

The Bangalore-based company launched a new product called CRED X IPL last month. The new offering allows members to use their CRED Coins to shop at the CRED Store, book stays on CRED Travel, receive exclusive rewards and cashback, and access offers when they shop online. CRED X IPL also incorporates a competitive aspect; users are pitted against each other on a leaderboard and the one at the top each month receives a jackpot prize.

CRED also counts itself as a fintech investor. The company recently invested $5 million in CredAvenue, a digital platform that helps investors discover, trade, execute, and fulfill debt solutions. CRED is also in talks to invest in Uni, a startup that aims to make credit cards more accessible.

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Facebook Launches Novi Digital Payment App Pilot with Pax Dollar Rather Than Diem

Facebook Launches Novi Digital Payment App Pilot with Pax Dollar Rather Than Diem
By David Penn Posted on
Categories: Daily news, Facebook

Facebook has launched a pilot project for its digital payments app Novi and, courtesy of partnerships with Paxos and Coinbase, will use USDP (Pax Dollar) rather than its Diem stablecoin. The pilot will involve users in Guatemala and the U.S., enabling them to send money to their contacts internationally via the Novi app. The fund transfers are instant, secure, and fee-free.

The decision to use USDP, according to Novi head David Marcus, was not intended as a negative change-of-heart toward Diem. “Our support for Diem has not changed,” Marcus said. “We intend to migrate Novi to the Diem payment network once it (receives) regulatory approval.” He added that using USDP for the pilot project would enable the team to test the technology with a stablecoin that had both a track record of successful operation, as well as “important regulatory and consumer protection attributes.”

First introduced two years ago (as Libra), Diem was initially planned for a 2020 release. However, regulatory concerns emerged almost immediately. For some, the issue was Facebook’s role itself and the potential problems of a for-profit corporation issuing currencies. Others worried about how to classify the technology, as well as how to effectively regulate the Libra platform – especially if the technology was used to help Facebook expand into banking and lending services. These concerns, and Facebook’s apparent inability to respond to them thoroughly, led to a number of high-profile withdrawals from the project, as Mastercard, PayPal, Stripe, and Visa all elected to exit the Libra Association, an organization established to oversee the development of the technology. In November 2020, the project was revised so that Libra would be backed by a single currency, the U.S. dollar, on a one-to-one basis rather than backed by a basket of multiple currencies as previously planned. The project was also rebranded “Diem.”

In the current project, Novi will use the USDP for transactions, and Coinbase will serve as the custody partner. But as far as Facebook is concerned, the selection of the Pax Dollar over Diem at this point is more of a tactical retreat than a strategic withdrawal. “We believe a purpose-built blockchain for payments, like Diem, is critical to deliver solutions to the problems that people experience with the current payment system,” Marcus explained.

That said, even the new project continues to face criticism, with a handful of senators – including Sherrod Brown of Ohio and Elizabeth Warren of Massachusetts – urging Facebook to suspend the project immediately. “Facebook cannot be trusted to manage a payment system or digital currency when its existing ability to manage risk and keep consumers safe has proven wholly insufficient,” the senators said in a statement.

Photo by RODNAE Productions from Pexels

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