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SmartAsset Launches New Client Acquisition Solution

By David Penn Posted on April 16, 2020
Categories: Daily news, SmartAsset

Photo by **chepté cormani** from **Pexels**

One of my favorite stories about financial management involves a new broker who becomes alarmed during a major market meltdown. The broker is fearful of hearing from anxious clients and investors, who he is convinced will demand that he sell everything. He asks his supervisor for advice and his boss replies, “call them.” When the broker hesitates, his boss continues, “call them. If you don’t another broker will. “

Communication with clients is key for all successful financial managers – whether they are long-term customers or new prospects. And this engagement is all the more important when the markets are volatile and nerves are on edge. This is what makes the new service from SmartAsset, unveiled today, a valuable resource for financial managers as well as their customers and clients.

Live Connections, from SmartAsset, enables financial advisors to connect directly with prospective clients by phone. The service is available to U.S.-based certified financial advisors, Registered Investment Advisors (RIAs) and advisory firms via SmartAsset’s SmartAdvisor platform.

Michael Carvin, CEO and co-founder of SmartAsset, said the new innovation was part of the company’s goal to enhance what he called “the match-making experience between consumers and financial advisors.” He added that the service would enable customers to more easily reach financial advisors “when intent is at the absolute highest.” The company notes that the average investor using its platform is 57 years old and has significant assets of nearly $900,000. Yet the vast majority of them – more than 75% – report not having a financial advisor.

The technology also enables advisors to spend more time working with clients and less time hunting for them. “For advisors, Live Connections cuts through the noise as we’re able to instantly connect them with validated consumer leads over the phone,” Carvin said. “All advisors have to do is pick up the call and focus on what they’re good at: advising clients.”

Today’s launch of Live Connections follows a 2019 pilot program in which advisors and firms reported a 100% contact rate and a 20% close/conversion rate with prospects.

One of the world’s most viewed sources of personal financial information, SmartAsset reaches more than 65 million people each month. Most recently demoing its technology at FinovateSpring, New York-based SmartAsset was founded in 2012 and has raised more than $51 million in funding. The company includes Focus Financial Partners, IA Capital Group, and Javelin Venture Partners among its investors.

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Apiax on Why 2020 is Turning Out to Be the Year for Regtech

By Julie Muhn (@julieschicktanz) Posted on April 16, 2020
Categories: Apiax, Speaker series

News from regtech companies has been flowing in 2020. Not only that, we saw significantly more regtech companies at FinovateEurope earlier this year than we have at previous events.

To get some insight into what’s driving this, we caught up with Apiax Co-founder Ralf Huber, who has over 16 years of legal and compliance experience within the financial industry and helped launch Apiax in 2017.

Talk to us about how Apiax makes regulations digital. Aren’t most regulations already available in a digital format?

Ralf Huber: Yes and no. It depends on your definition. PDF documents are technically a “digital format” but they are one-dimensional and still require a lot of manual interpretation. Truly digital is, in our meaning, responsive and machine-readable regulations.

Considering the pace of innovation in business you would expect to find more digital solutions in legal and compliance, but in reality it is lagging far behind with manual processes and text-based resources. As well as costly and inefficient, the ambiguous terminology can be difficult to interpret, which ultimately puts the business at risk. We want to change that.

At Apiax, we transform text-based manuals into responsive and machine-readable compliance rules. These rules combine individual case attributes with relevant regulations for precise dos and don’ts to any given business scenario.

In practice, you can access guidelines through user-friendly apps and be compliant at the touch of a button – as opposed to reading 50+ pages from a policy or manual. Alternatively, companies can integrate the rules directly into their internal applications and workflows to serve as a “compliance plug-in.”

What is behind the name “Apiax”?

Huber: Apiax simply refers to what it enables you to do.

API stands for Application Programming Interface and is the technology we use to integrate our compliance rules into digital processes, like a compliance layer. It allows for rules to work behind the scenes of existing infrastructure to identify, block, or notify of noncompliant actions. Once compliance has gone digital, it supports business growth and helps create highly efficient processes whereby compliance is the only possible outcome. This is also known as compliance by design.

AX refers to “ask,” a spelling version used historically and still today in some parts of the world. In other words – ask the API!

How has COVID-19 impacted Apiax? Have any opportunities arisen out of the crisis?

Huber: COVID-19 has shaken entire industries and many companies have had to re-evaluate core business practices and compliance frameworks because of it.

We at Apiax trust the capabilities of technology and understand its central role in making organizations lean and resilient. Our digital-first solutions reflect the way we already operate and do business ourselves.

Lately, we have seen broader industry endorsement as financial institutions aim to keep their compliance units operational when team availability becomes challenging. Many companies look for ways to digitalise their core client-facing processes, a transition which requires machine-readable compliance expertise. Paper-based documentation and text-based policies do not fit into this digital workplace and accessibility is poor.

Now, more than ever, it is important to share know-how seamlessly and independently of team availability — especially with business stakeholders. Adapting to today’s challenges will help shape future best practices and key processes. We will all learn and come out of this better equipped to tackle uncertainties and change. In the meantime, we are here to help with that transition. Simply drop us a message.

Regtech seems to be becoming more mainstream in fintech. Tell us why 2020 is turning out to be the year for regtech solutions?

Huber: RegTech has traditionally taken hold in the financial services industry with its undergoing wave of technology and constant regulatory scrutiny. Building on a tough decade of post-recession initiatives and an influx of financial regulations, many organizations look for ways to minimize the burden and spend of compliance measures in favor of growth objectives and innovation.

Meanwhile, technology has made it possible to add user experience and accessibility to regulation – two concepts that used to be far away from each other. RegTech enables organizations to better stay in line with compliance standards whilst materializing growth plans with a stronger go-to-market readiness.

If you missed Apiax’s demo at FinovateEurope earlier this year, you can watch the full demo video below.

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Stripe Brings Home $600 Million- its Largest Funding Round Yet

By Julie Muhn (@julieschicktanz) Posted on April 16, 2020
Categories: Daily news, Funding

Payment acceptance and business management platform Stripe announced an extension of its $250 million Series G funding round today. The additional $600 million in funds come from existing investors including Andreessen Horowitz, General Catalyst, GV, and Sequoia.

The investment is Stripe’s largest so far and brings the California-based company’s total funding to $1.6 billion.

The company will use the new funds to hire more staff, invest in its software, make strategic acquisitions, and expand internationally. Stripe has launches pending in Bulgaria, Cyprus, the Czech Republic, Hungary, Malta, and Romania.

Stripe first announced its Series G round in September of last year, in a pre-COVID-19 world. However, despite the vast differences in the global economy at that time, the company’s valuation has actually increased– from $35 billion last September to $36 billion today.

A $1 billion rise in valuation is rare these days, when startups across the globe have been told to brace for down rounds. The company attributes this boost to the increased digital adoption that has occurred as a result of businesses moving their operations online because of the coronavirus.

“People who never dreamt of using the internet to see the doctor or buy groceries are now doing so out of necessity. And businesses that deferred moving online or had no reason to operate online have made the leap practically overnight,” said John Collison, Stripe president and co-founder. “We believe now is not the time to pull back, but to invest even more heavily in Stripe’s platform.”

Stripe was founded in 2010 and has since padded its client base with well-known firms such as Caviar, Coupa, Just Eat, Keap, Lightspeed, Mattel, NBC, Paid, and Zoom– a partnership that was just unveiled today.

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10 Fintechs that Make Taxes Less Taxing

By Julie Muhn (@julieschicktanz) Posted on April 15, 2020
Categories: ANNA, Avalara, Credit Karma, DAVO Technologies, Gusto, Innovation Series, Xero

Taxes, especially in the U.S., can be anxiety-inducing not only for consumers but also for small businesses. And even though this year’s tax filing deadline has been extended to July 15, the filing and payment requirements remain unchanged.

“The daunting task of gathering documents for a year that has passed is one that is difficult for small business owners, especially when they already feel overwhelmed at tax time,” said Lil Roberts, CEO and founder of Xendoo. “Coupling that pain point with small businesses feeling that federal tax is a “black box” and understanding how to maximize tax savings is also extremely frustrating.”

Fortunately, where there is a financial problem there is a fintech solution. There are many fintechs available to help both individuals and businesses not only understand their taxes but also to facilitate tax payment. Below, we’ve highlighted the top 10 tax-focused fintechs.

ANNA

ANNA offers a business bank account and mobile tax app that help merchants with their invoicing, expense tracking, and taxes. The company’s app reminds businesses about tax deadlines and helps them prepare by estimating how much they owe as they earn revenue. ANNA also has a team of accountants to help prepare and submit tax returns.

Avalara

Avalara offers tax compliance tools for a range of businesses. The Seattle-based company, which counts customers such as Pinterest, Adidas, and Bed Bath & Beyond, offers products to help companies calculate sales tax, gather data to prepare and file tax returns, as well as collect, store, and manage tax documents on behalf of the business. Avalara offers products tailored to specific businesses, including ecommerce, lodging, communications, and restaurants.

Credit Karma

In 2016, financial health company Credit Karma launched a free tax filing service. Interestingly, the company was recently purchased by TurboTax parent Intuit for $7 billion. In comparison with Credit Karma’s free service, TurboTax charges users anywhere from $60 to $120 for a federal return and $45 for a state return.

DAVO

DAVO launched in 2011 to be the ADP for merchants’ sales tax. In other words, DAVO automates the entire sales tax process on a business’ behalf. The company connects to the merchant’s point-of-sale technology to collect sales data and sets aside taxes on a daily basis. When sales tax is due, DAVO files and pays on the small business’ behalf.

Gusto

HR and payroll company Gusto has a robust set of services to make small business owners’ lives easier. The company automatically files payroll taxes and distributes I-9s, 1099s, and W-2s to employees. Gusto also helps businesses stay compliant by staying up-to-date on changing tax laws and doing all tax-related calculations on the business’ behalf.

Refundo

Refundo offers a suite of solutions to help tax preparers bring their operations into the digital age. Among the company’s products are mobile document transfers, audit assistance, tax preparation fee collection service, payment acceptance tools, and refund advance technology. At the end of the day, the company’s solutions not only make the tax preparer’s life easier, they make the lives of their taxpaying clients easier, as well.

RoamHR

With a mission to make self-employment easier, RoamHR automatically removes tax withholdings from users’ accounts once they get paid and places the funds into a RoamHR Tax Withholding Account. The company also offers tools that help users track deductible expenses, such as mileage, and helps them file their business taxes each quarter.

Taxnology

Taxnology has built a digital tax compliance center, a web-based solution to help businesses manage their taxes digitally. The company stores business’ historical tax data in the cloud so that it can be used for future cash flow planning and budget purposes or retrieved in the event of an audit. Taxnology is currently only available in Hungary.

Xendoo

Xendoo offers bookkeeping and CPA services that connect with businesses’ financial accounts to deliver monthly reports, business insights, and tax filing. Because Xendoo has a comprehensive view of the merchant’s financials, the company is able to provide tax consulting services, as well.

Xero

Cloud accounting software company Xero has been helping small businesses with their bookkeeping since it was founded in 2006. The company also offers solutions to help tax preparers who have Xero clients automate and customize tax-related tasks. For businesses who prepare taxes on their own, Xero offers tools to file taxes online, as well as prepare sales tax returns using software that leverages a company’s sales data to automatically calculate the taxes.

Roberts added one final thought for those businesses working toward that July 15 deadline. “For a smooth process, best practice is to have monthly bookkeeping done so tax benefits are being collected all year, and having books in order to make tax time more peaceful.” And during a pandemic, anything that can make a process more peaceful is worth doing.

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iProov Unveils New Web-Based Biometric Authentication Solution

By David Penn Posted on April 15, 2020
Categories: iProov

Photo by **Sharon McCutcheon** from **Pexels**

Three-time Finovate Best of Show winner iProov is bringing its innovations in biometric authentication to the web browser. The company announced the launch of iProov Web today, giving users of laptop, desktop, and tablet computers the same level of security enjoyed by users of iProov’s mobile app.

“iProov Web is a game changer for the digital identity industry,” company CEO Andrew Bud said. “Millions of people around the world have iProoved themselves on a mobile app, accessing online government, banking or travel services securely by proving that they are who they say they are, and that they are genuinely present during the authentication.”

The new offering is geared toward the significant number of people who prefer to use desktops or laptops, particularly for large online purchases and transactions, or when security is a top concern. In their product announcement, iProov cited data that indicated that while the web represented 37% of online traffic, it nevertheless delivered a disproportionate 56% of online revenue.

iProov’s patented Flashmark technology enables mobile apps to confirm genuine presence and provide seamless authentication, support digital onboarding, or assist in account or password recovery. The technology defends against presentation and replay attacks, as well as deepfakes, by ensuring both that there is a real person conducting the transaction and that the real person, is the right person.

London-based iProov most recently demonstrated its facial recognition-based biometric authentication solution at FinovateEurope in Berlin this February, picking up its third consecutive Best of Show award. Also that month, iProov opened a North American headquarters in Catonsville, Maryland at the Research and Technology Park at the University of Maryland Baltimore County (UMBC).

More recently, the company partnered with SK ID Solutions, bringing its technology to customers in Estonia, Latvia, and Lithuania. iProov was founded in 2011.

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Onfido Raises $100 Million Because “Identity is Broken”

By Julie Muhn (@julieschicktanz) Posted on April 15, 2020
Categories: Funding, Onfido

Digital identity verification platform Onfido reeled in $100 million in a round led by TPG Growth this week. Salesforce Ventures, Microsoft’s M12 Capital, and others also participated. The London-based company’s total investment now sits at just over $182 million.

The company, which counts TechStars, YCombinator, and 500 Startups among its previous investors, will use the funding toward R&D and global expansion. Specifically, Onfido plans to boost its operations in the North American market.

Onfido started off in 2012 with $20,000 in funding from Oxford University and made those funds last for a whole year. After that, the company said it could go one of two routes: it could grow quickly and rely on investment to sustain operations or it could opt for slower growth but be financially self-sufficient.

“We’ve naturally chosen the grow-fast path because we strongly feel that the time to solve the digital access problem is overdue, and urgently needs to be solved, for good,” said CEO and Co-founder Husayn Kassai.

From the outset, Kassai and fellow co-founders Eamon Jubbawy and Ruhul Amin focused on creating a new standard for digital access that looks beyond credit bureaus for a more inclusive approach that stops fraud without compromising the user experience. “Identity is broken and getting worse, contributing to $2 trillion in laundered money,” said Kassai.

To help overcome this, Onfido tapped the power of machine learning to assess 4,500 types of documents from 195 countries for authenticity, as well as match document photos to the user’s selfie. The technology, which the company showcased at FinovateFall 2018, can be used for user onboarding, identity verification, fraud detection, age verification, and to help meet AML and KYC requirements.

“We didn’t fundraise to just get to the next milestone, we need the funding as we’re changing the world,” added Kassai.

With more than 350 employees across nine offices in London, San Francisco, New York, Albuquerque, Lisbon, Berlin, Paris, New Delhi, and Singapore, Onfido helps more than 1,500 companies verify their users. Among the company’s clients are Revolut, Zipcar, Expensify, and Bitstamp.

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How to Underwrite Loans When Everyone is a Higher Risk

By Julie Muhn (@julieschicktanz) Posted on April 14, 2020
Categories: Alumni profile, Neener Analytics

COVID-19 has rewritten so many rules about the economy. It is now more difficult than ever to underwrite risk and ultimately understand if a consumer will pay back their loan.

The Wall Street Journal reported late last month that many lenders have implemented stricter lending requirements because of this challenge. In some ways, this is necessary for banks to protect themselves. However, the more stringent standards also create hardships for consumers who could really use some extra cash right now.

Policymakers have intervened to encourage banks to loosen their lending standards to meet consumer needs during this time. Banks are being told not to pay attention to credit as much as they used to and to not collect more than a year’s worth of data for underwriting.

“There is significant pressure by the Small Business Administration to make unsupported loans,” said career banker and author Richard Lawless. “Banks are being told, ‘don’t pay attention to bad credit.’ This will result in loan losses of 10%, or more. All of which amounts to the new CDC guidance for banks, ‘don’t wear you mask, don’t wash your hands, touch everything, and gather in large groups. It’s okay, the government has got your back.'”

Fortunately, non-traditional underwriting models have been gaining popularity in the fintech space. Many of these models don’t rely on a borrower’s financial standing, but instead pull data from alternative sources such as social media. Two things fueling this recent explosion include the availability of more data and the advanced expertise of AI.

California-based Neener Analytics relies on both of these aspects– the abundance of data as well as AI– for its risk outcome predictor. The company offers businesses an “automated psychologist” that tells companies the likelihood that a prospective borrower will pay back a loan. Unlike the way many companies analyze creditworthiness, Neener Analytics doesn’t look at whether or not the consumer’s financial situation is in good shape. “The question isn’t can they pay us back– that’s easy to figure out,” said CEO Jeff LoCastro during his demo at FinovateSpring 2019. “The question is will they.”

The company places a lot of weight on what it considers small data and human data. Regarding the impact of the COVID-19 crisis on consumer credit scores, LoCastro said, “The market is going to be hit with a tidal wave of newly undecisionable consumers: consumers who on a Monday were a good bet, but by Friday will suddenly be unacceptable. They missed payments because of a global COVID shut-down…not because they are a bad risk; this is a health crisis, not a financial one. But the big data algorithms can’t account for that… Only small data can see beyond COVID; only through small data is the consumer still a distinctive individual human being endowed by a unique matrix of conditions and domains that manifests in binary outcomes.”

To help businesses underwrite risk in this new environment, Neener Analytics’ tool turns to social media. With over 70% accuracy, this “automated psychologist” tool can be summoned via a one-click decisioning tool or a chatbot dubbed ARIA. Both methods eliminate the need for lenders to ask more questions on loan applications, which often leads to abandonment.

“We all know sometimes bad things happen to good people,” added LoCastro. “The only way to bridge this is through human data . . . not through more underwhelming historical, transactional, or relational approaches. With Neener Analytics, consumers who were a good bet on Monday . . . will still be a good bet on Friday.”

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Currencycloud and Derivative Path to Bring FX to Community Banks

By David Penn Posted on April 14, 2020
Categories: Alumni News, Currency Cloud, Daily news

A new strategic partnership between Currencycloud and cloud-based FX trading platform Derivative Path will make it easier for community and regional banks to offer a variety of FX and interest rate derivative trading options to their customers.

Derivative Path will embed Currencycloud’s FX technology into its DerivativeEDGE platform, an end-to-end solution for interest rate derivative, FX, and hedge accounting. Together the offering will provide banks with a solution that enables counterparty/order management, electronic spot FX with integrated Request for Quote execution, third party international payments and receipts, and derivatives valuation, as well as compliance reporting.

Derivative Path co-founder and co-CEO Pradeep Bhatia said, “This joint effort will help us leverage our technology capabilities, global infrastructure, and subject matter expertise, to offer banks a platform to manage their FX and payments, a growing need in an underserved space.”

Based in the San Francisco Bay area, Derivative Path partners with financial institutions, buy-side, and commercial end-users to provide over-the-counter, interest rate derivative and FX trading execution and management solutions. Founded in 2013, the company has more than 100 clients and has facilitated thousands of trades with its interest rate, FX, and hedge accounting technology.

Long-time Finovate alum Currencycloud offers 85 APIs over four modules – collect, convert, manage, and pay – that represent the complete B2B cross-border payment workflow. The company has processed $50+ billion to more than 180 countries around the world.

Most recently demonstrating its technology at FinovateSpring 2018, Currencycloud has raised more than $160 million in funding. The company picked up nearly half that sum in a Series E round at the beginning of the year. In February, Currencycloud announced a partnership with U.K. travel money card, Currensea. Mike Laven is CEO.

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Kyckr Deepens Relationship with Citi

By Julie Muhn (@julieschicktanz) Posted on April 14, 2020
Categories: Citi, Daily news, Kyckr

Regtech company Kyckr, which first partnered with its client Citigroup in 2016, has extended its relationship with the bank. Kyckr announced today that it will now provide Citi Commercial Bank with its client verification platform.

Kyckr’s verification platform has information on more than 200 company registries and 170+ million legal entities across 120 countries. Citi Commercial Bank will use the company’s API to verify business information using documents that detail ownership and control, financials, solvency, and more when onboarding new commercial clients.

“Onboarding new clients when opening a bank account is the first stage in customer verification, involving gathering vital information on the customer and conducting identity checks to comply with Know-Your-Customer regulations,” said Kyckr CEO Ian Henderson. “More and more businesses are looking into automated and accurate means of adhering to Anti Money Laundering and Know Your Customer obligations to prevent fraud, and this is where our technology is well positioned in the market.”

Along with Citi Commercial Bank, Kyckr also serves Citi’s Institutional Clients Group (ICG) and Trade and Transaction Services (TTS) with its corporate data solutions.

Kyckr has provided APIs and cloud-based automated decision engines to help companies with KYC compliance, due diligence, and customer onboarding since it was founded in 2007. The Australia-based company is listed on the ASX under the ticker KYK and has a market capitalization of $10.85 million (AUD $16.9 million). Since going public, Kyckr has raised $11 million in post-IPO equity.

In addition to Citigroup, Kyckr’s clients include DemystData, the Bank of Ireland, and others.

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Three Ways Digital Identity is Combating the COVID-19 Crisis

By David Penn Posted on April 13, 2020
Categories: List series

Technology companies from every corner of the globe have been lending their talent, resources, and solutions to help deal with the health and economic implications of the COVID-19 crisis. While those firms in health technology have obviously played the lead role, innovators in virtually every field of technology are bringing their unique expertise to the challenge.

Here are three ways that companies specializing in digital identity and identity management are helping organizations, institutions, and individuals manage the global pandemic.

Know Your Carrier

One of the key ways that countries like South Korea have “flattened the curve” of the pandemic is through an approach called “test and trace.” This strategy relies on accurately identifying those who have the coronavirus and then tracking down all those individuals who have had contact with the infected individual so that they can be tested for the virus.

For example, In China, in addition to temperature checks outside of public places like restaurants, officials are leveraging smartphones and QR codes to identify those who are infected with the virus, and to track their recent movements to locate others who may have been in contact with the infected person. In the West, the news that Apple and Google are collaborating to develop a contact tracing solution that will help us meet this specific challenge is a positive sign. Yet as hopeful as this opportunity may be, it is not without caveats.

“It’s really important to get the cooperation of the public,” Recode Executive Director Kara Swisher told CNBCs Squawk Box Monday morning during a discussion on the Apple/Google initiative. She flashed her sleep and activity-tracking Oura ring, noting that wearables could be among the mobile technologies that could be used to make contact tracing as seamless as possible. “More power to the tech companies means more power to the tech companies,” she said. “The only question is will they give it back when this is over?”

Know Your Customer

Getting money into the hands of unemployed and furloughed workers is one challenge. Getting money into the bank accounts of businesses forced to close their doors during this period of quarantine and social distancing has proved, in some ways, to be an even steeper challenge. Many in the small business community were caught off guard, for example, when they learned that in order to access federal COVID-19 relief funds they would need to have a relationship with a participating financial institution.

The issue is that, even in an emergency, knowing your partner is paramount. And in order for banks to be financially responsible, they need to pursue the same measure of KYC diligence on applicants for emergency funding as they would for any other banking customer. To fail to do so would leave these institutions vulnerable, potentially, to massive fraud losses – turning an already challenging environment for banks even worse. Making it easier for financial institutions to engage needy SMEs by leveraging many of the innovations in Big Data and advanced machine learning – while remaining compliant and financially responsible – is a slam dunk opportunity for a sizable number of fintechs.

This is a reminder that regtech may not be appear to be the most important subsector within financial technology. But in the same way that the global pandemic is causing us to think as much about epidemiologists as we do about emergency room doctors, the current challenge in KYC also reminds us of how important innovations in regtech are not only within technology, but also for society as well.

Know Your Crew

While many are understandably eager to “re-open the country,” it remains likely that thousands of workers will continue to work remotely – at least in the near term. This phenomenon has been a boon for companies like Zoom that provide technology that enables online conferencing and makes it easier for workers who do not traditionally work from home to do so.

One major challenge for these newly-homebound employees is ensuring that they are logging into their company’s networks and platforms in a safe and secure manner. Beyond having the infrastructure to support remote work, having the capacity to authenticate legitimate remote workers, and to make sure that the data they are transmitting back and forth remains out of the hands of hackers and cybercriminals is critical.

Indeed, one of the discontents of the “Zoom Boom” is that many people using the platform have raised major privacy concerns, including reports that Zoom conferences have been infiltrated by hackers, interrupting live presentations with obscene images.

As with KYC, this is another area where fintech’s regtech calvary is coming to the rescue. Firms like Onfido and Jumio, among many others, have made their identity verification technologies available for free to organizations and institutions in the health and home care fields that are on the frontlines of the fight against the virus.

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Visa and Fold Offer Co-Branded Card with Crypto Rewards

By David Penn Posted on April 13, 2020
Categories: Daily news, VISA

Payments giant Visa has teamed up with Atlanta, Georgia-based Fold to launch a co-branded debit card that offers rewards in the form of bitcoin. The partnership was announced late last week, and is the fruit of Fold’s participation in Visa’s Fintech Fast Track program.

The new debit cards are expected to be available in July. Users will get up to 10% of their cash purchases credited in Bitcoin. What’s unique about Fold’s approach with the new card is that it enables users to earn Bitcoin while spending in dollars. As Fold CEO and co-founder Will Reeves explained, by spending in dollars and accumulating Bitcoin rather than spending it, users avoid the potential tax implications of selling the digital asset.

This new initiative extends Fold’s business beyond enabling shoppers to buy dollar-denominated gift cards from popular brands like Amazon, Uber, and Starbucks with Bitcoin. Made available on an “early access” basis last fall, the Fold app also gives consumers 20% cashback in bitcoin on all purchases, fiat or crypto.

“We’re changing the fact that rewards points are issued in the form of restricted airline miles, arbitrary points, or depreciating fiat, instead of the best performing asset of the last decade: bitcoin,” Reeves wrote on the company blog back in September. “But unlike existing rewards that require users to give up their privacy for points, Fold’s new app rewards users for shopping privately.”

The partnership is a second bite at the bitcoin apple for Visa. A year ago Visa and cryptocurrency exchange Coinbase introduced a Visa debit card in the U.K. The contactless card syncs with the user’s Coinbase account and, for a fee of approximately 2.5%, enables users to make purchases in fiat currency and have the responding amount of the cryptocurrency debited from whichever cryptocurrency account the users selects.

Fold was founded in 2014. The company has raised $3.3 million in funding, and includes Craft Ventures, CoinShares, Slow Ventures, Goldcrest Capital, and Fulgur Ventures among its investors.

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Goldman Sachs Launches POS Financing Product

By Julie Muhn (@julieschicktanz) Posted on April 13, 2020
Categories: Daily news

With citizens across the globe finding themselves in a financial crunch, Goldman Sachs’ new product may be coming at just the right time. The investment bank launched a point-of-sale (POS) financing solution that will help users pay for larger purchases over time.

The POS tool, MarcusPay, helps borrowers afford items ranging from $750 to $10,000 by paying for them over the course of 12 to 18 months. Goldman Sachs doesn’t require any money down and there are no fees for purchases made with MarcusPay. The interest rates for MarcusPay purchases range from 10.99% to 25.99% APR. These rates are competitive with those of credit cards, which average just over 15% APR.

Goldman is piloting MarcusPay with JetBlue Vacations, a partnership that was formed before the recent pandemic quashed any and all vacation planning.

Aside from the launch partner fumble, MarcusPay faces a few more hurdles to compete with companies such as Sezzle, Affirm, and Klarna, which have been gaining traction in the U.S. in the POS financing space for the past few years.

The first issue is that MarcusPay requires users to apply for financing during the transaction flow. The extra hurdle of filling out an application in the middle of the purchasing experience may be enough for users to abandon the purchase altogether. Second, the popularity of POS financing is due, in large part, to millennial consumers that do not have a credit card. This is quite different from Goldman’s target market, which is primarily comprised of mass affluent consumers. Additionally, the POS financing product may result in cannibalization– that is, Goldman’s credit card holders may opt to use the POS financing product instead of their credit card in order to benefit from a potentially lower interest rate.

The one benefit that MarcusPay has in competing in the POS financing space is that its service is generally geared toward financing larger purchases.

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