This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.
Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
Restaurant payments and analytics innovator Upserve is the latest company to be acquired by point of sale (POS) and ecommerce solutions firm Lightspeed.
The $430 million purchase was announced earlier this week, marking Lightspeed’s 10th acquisition since it was founded in 2005. The deal comes on the heels of Lightspeed’s November purchase of ShopKeep that is anticipated to close for $440 million.
“Lightspeed is quickly emerging as a world-leading commerce platform for SMBs and partnering with them to deliver data-based insights through a single digital hub was a natural choice,” said Upserve CEO Sheryl Hoskins. “Together we look forward to empowering North American restaurateurs to deliver superior guest experiences and make them wildly successful.”
Lightspeed anticipates the acquisition will accelerate product innovation and boost its analytics commerce platform. The company’s purchase of Upserve will also help Lightspeed reach an additional 7,000 U.S.-based clients in the hospitality industry.
Originally founded under the name Swipely in 2009, the company rebranded to Upserve in 2016 to reflect the company’s focus on the restaurant industry.
Upserve has raised a total of $40.5 million from 14 investors, including Greylock and Vista Equity Partners. From October 2019 to October 2020, the company recorded approximately $40 million in revenue.
It’s been a grand week for Finland’s ReceiptHero. The company announced a few days ago that it was teaming up with SEB Kort to have its digital receipt functionality integrated into SEB Kort’s corporate card, Eurocard. Then, we learned that ReceiptHero had inked a deal with fellow Finovate alum ETRONIKA that will enable the launch of the first e-receipt solution in the Baltic region. The new offering will allow ETRONIKA’s business customers to use their KASU retail network management system and ReceiptHero’s technology to issue digital receipts to their customers.
“ETRONIKA has built a truly modern retail chain management and POS product and we are thrilled to be partnering on a wider partnership that allows us the initial steps of building out the Baltic ecosystem.” ReceiptHero CEO Joel Ojala said.
Today comes more news from the Finland-based fintech. Courtesy of an investment from VC Lifeline Ventures, Superhero Capital, and Vidici Ventures of Sweden, ReceiptHero has picked up $2.43 million (€2 million) in seed funding.
“We’re making some real strides now with merchants and potential bank partners,” Ojala said. “We’ve hit an inflection point where banks understand the potential of digital receipts and value for their customers. For merchants they feel safe with ReceiptHero protecting their customer data and payment information.”
Growing interest in ReceiptHero’s technology, which transmits digital receipts from merchants directly to customer banking or account apps, comes as Finland’s government has decreed that digital receipts will be mandatory by 2025. Finland launched a digital receipt pilot project in 2019 that saw more than 50,000 state workers shopping exclusively with merchants using ReceiptHero’s platform.
ReceiptHero made its Finovate debut earlier this year at FinovateEurope in Berlin. Headquartered in Helsinki, the company is also partnered with Nordea, integrating its technology with the bank’s Nordea Wallet offering at the beginning of last year. Other recent ReceiptHero partners include SKJ Systems, Diebold Nixdorf, and global IT system integrator CGI.
PhonePe is selling a $700 million stake in its company to existing investors, including Walmart, which led the financing round. The digital wallet and online payments company will use the funding to distance itself from Flipkart, which Walmart purchased in 2018. As part of the deal, Flipkart’s ownership of PhonePe will drop from 100% to 87%, according to TechCrunch.
India-based PhonePe anticipates that the $700 million in capital– along with independence from parent company Flipkart, which operates an ecommerce division– will help boost its growth in the ever-growing digital payments arena.
Further cementing PhonePe’s independence, the company has appointed its own board of directors, including PhonePe Founder and CEO Sameer Nigam and former Flipkart executive Binny Bansal.
“We are really excited to have access to dedicated long-term capital to further our ambitions in the financial services distribution sector as well as creating large innovative growth platforms for India’s micro, small, and medium enterprises,” said Nigam.
Founded in 2015, PhonePe is estimated to be worth around $5.5 billion. The company anticipates it will be profitable by 2022 and plans to go public in 2023. PhonePe currently has 100 million active users and recorded almost one billion transactions on its platform in October.
Lloyds Banking Group is making instant, cross-border payments possible, thanks to a partnership with global secure financial messaging services provider SWIFT.
The U.K.-based bank announced it is the first bank to go live with SWIFT’s gpi Instant Connection, a new service that helps consumers and businesses send money in seconds across the globe.
gpi, which stands for Global Payments Initiative, was launched in 2017 to facilitate international payments. Since then, SWIFT has amassed more than 4,000 financial institution clients who collectively use gpi to send more than $300 billion each day in more than 150 currencies.
“At Lloyds Bank we strive to continually evolve and create innovative solutions for our clients,” said Ed Thurman, Managing Director and Head of Global Transaction Banking at Lloyds Banking Group. “The gpi Instant service is set to be a game changer in cross-border payments and we are very excited to be the first bank globally to offer the service here into the U.K.”
The new service leverages SWIFT gpi, SWIFT’s high-speed cross-border rails, and connects with a country’s own real-time infrastructure. In Lloyds’ case, SWIFT gpi is connecting with the U.K.’s Faster Payments, the region’s own real-time payments initiative.
“We developed gpi Instant with our community through responsible innovation and equal emphasis on four core needs — speed, security, transparency and compliance,” said David Watson, Chief Strategy Officer at SWIFT. “We look forward to continuing our work with market infrastructures and financial institutions to bring the benefits of seamless cross-border payments to customers across the globe.”
The launch with Lloyds comes after SWIFT tested out the service earlier this year in a pilot with Lloyds, Barclays, Commonwealth Bank of Australia, DBS, Wells Fargo, and BBVA. The real-time payments capabilities are part of SWIFT’s new strategy to retool cross-border infrastructure to facilitate instant and frictionless transactions.
With more than $9 billion in assets, VyStar Credit Union is the latest community-based financial institution to partner with open finance money experience innovator MX. VyStar, one of the 20 largest credit unions in the U.S., will leverage MX’s data connectivity APIs, account aggregation, and data enhancement tools to enhance the online experience for its more than 735,000 members in Georgia and northeastern Florida.
“Our strategy is to harness innovation and strategic fintech relationships that provide the best experiences that will improve our members’ financial well-being, and this partnership with an innovative fintech like MX is a big step in furthering that strategy,” Joseph R. Colca, SVP of Digital Experience at VyStar Credit Union, said. “We’ve been impressed not only with MX’s world-class data enhancement tools, but also with the alignment of our missions to empower financial strength through member advocacy.”
The partnership will enable members of VyStar Credit Union to aggregate and view accounts from all of their financial institutions into a single interface. MX’s technology collects, cleanses, and enriches transaction data, providing insights that help users more accurately plan their financial futures, as well as take smarter financial actions in the present. VyStar believes that embracing the technology will enable the Jacksonville, Florida-based credit union to gain wallet share among its customers by removing any need to log in to other apps or websites.
“With MX, VyStar is giving its customers greater clarity into their finances, which is exactly the kind of innovation, partnership, and money experience that MX loves to enable through our powerful data platform,” Chief Customer Officer for MX Nate Gardner said.
A multiple time Finovate Best of Show winner, MX most recently demonstrated its technology last year at FinovateFall. A leading data platform for banks, credit unions, fintechs, and other financial services providers, MX offers solutions to quickly and accurately collect, enhance, analyze, and present financial data. The company enables financial institutions to better understand and serve their customers, and helps them empower their customers to make better, more informed financial decisions.
Founded in 2010 and headquartered in Lehi, Utah, MX has made headlines in recent months via its partnerships with companies like Borrowell, a leading credit education firm based in Toronto, Ontario, Canada; Advicent, a SaaS technology solution provider for financial advisors and planners headquartered in Milwaukee, Wisconsin; and Central Pacific Bank , a full-service financial institution based in Honolulu, Hawaii. Named to the 2020 CB Insights Fintech 250 and highlighted as one of the fastest growing companies in Utah, MX unveiled its open finance platform, MX Open, in September. Ryan Caldwell is co-founder and CEO.
One of the more fascinating stories in the history of black America is the rise of black-run banking institutions in the final decades of the 19th century. And while the early days of black banking and finance had their fair share of tragedy – the massacre at “Black Wall Street” in Tulsa, Oklahoma in 1921 among the more horrific – the industry persisted nevertheless, enabling black SMEs and families to access basic banking services and credit at a time when mainstream financial institutions refused to serve them.
It’s hard not to recall this history when reading the news that Fiserv has become a corporate partner of the non-profit African-American Credit Union Coalition (AACUC). As a new corporate partner, Fiserv will support the Coalition’s internship and mentorship programs, as well as make a financial contribution and back Coalition efforts such as its I’ve Got Five on It Giving Tuesday campaign.
AACUC President and Executive Officer Renée Sattiewhite acknowledged that Fiserv’s participation comes at a time of heightened awareness of and renewed determination to fight forms of systemic racism in particular. “As a year that has galvanized support for African-American community comes to a close,” Sattiewhite said, “we are looking forward to the future along with organizations like Fiserv.”
Fiserv General Manager of Credit Union Solutions and executive sponsor of the partnership Derek Everett put the collaboration in the context of Fiserv’s goal of better engaging underbanked communities. In addition to its partnership with AACUC, Fiserv is also investing $10 million in black- and minority-owned businesses via its Back2Business initiative. “As we begin our work with AACUC, our team is looking forward to strengthening existing relationships and forging new ones with the diverse communities and professionals AACUC strives to empower,” Everett said.
Headquartered in Duluth, Georgia, the Coalition promotes racial equality and fairness in the credit union industry, and supports black-led credit unions and credit unions serving black communities. Larry Sewell, who recently took over as chairman of the AACUC, discussed the challenge of diversity in an interview this fall. Currently Vice President of Corporate Partnerships and Advocacy for Together Credit Union, Sewell noted that of the more than 5,000 credit unions in the U.S., there are “approximately 170 African-American CEOs.” The number of women among those 170 CEOs, it should be noted, is impressive at more than 58%. But the industry clearly has room to improve in terms of ethnic diversity at its most senior, leadership ranks.
Taking the opportunity to seize a fresh start that comes with a new year, Facebook’s Libra Association has rebranded to Diem Association.
The group chose the name Diem, which is Latin for “day” to signal a new day for the association. The rebrand will not change the mission of the organization, which is to build a safe, secure, and compliant payment system. The move will, however, serve as a way of “reinforcing its organizational independence.”
“The Diem project will provide a simple platform for fintech innovation to thrive and enable consumers and businesses to conduct instantaneous, low-cost, highly secure transactions,” said the Diem Association’s CEO Stuart Levey. “We are committed to doing so in a way that promotes financial inclusion – expanding access to those who need it most, and simultaneously protecting the integrity of the financial system by deterring and detecting illicit conduct. We are excited to introduce Diem – a new name that signals the project’s growing maturity and independence.”
As Levey suggests, the new name serves as a way for Diem to distance itself from Facebook, which initiated the association in June of 2018. This isn’t the first time the group has attempted to disassociate itself with Facebook. In May, the association changed the name of the Diem digital wallet from Calibra to Novi.
In addition to the rebrand, the Diem Association and its subsidiary that serves as the regulated payment system operator, Diem Networks, is reinforcing its ranks. The group has appointed Dahlia Malkhi as the Association’s Chief Technology Officer, Christy Clark as Chief of Staff, Steve Bunnell as Chief Legal Officer, and Kiran Raj as Executive Vice President for Growth and Innovation and Deputy General Counsel.
The news of the new hires comes on the heels of the company’s appointment of James Emmett as Managing Director, Sterling Daines as Chief Compliance Officer, Ian Jenkins as Chief Financial and Risk Officer, and Saumya Bhavsar as General Counsel.
Regardless of today’s seemingly upbeat news, Diem is still currently in limbo. The association is still waiting on regulatory approval, including a payment systems license for the operational subsidiary of the Association from the Swiss Financial Market Supervisory Authority (FINMA).
From in-house innovation to outright acquisition, businesses have myriad paths to consider when looking to expand their product portfolios. We learned late last week that mobile payments company Square has taken one of the less flashy routes to growing its offerings: paying $50 million in cash for Credit Karma’s tax business. Square will add the service’s DIY tax filing functionality to its own Cash App.
The free tax filing option will be featured along with the app’s other financial tools, including P2P payments, Cash Card, direct deposit, and the ability to make fractional investments in stocks and bitcoin. Cash App was launched by Square seven years ago as a P2P money transfer service and has grown into an integrated financial ecosystem with more than 30 million monthly active customers as of June 2020.
“We created Cash App to provide more access to the masses of people left out of the financial system and are constantly looking for ways to redefine our customers’ relationship with money by making it more relatable, instantly available, and universally acceptable,” Cash App lead Brian Grassadonia said.
One in two tax filers – a total of 80 million taxpayers – prepared and filed their own Federal income taxes electronically in 2020, according to the IRS, and the trend is expected to accelerate. Credit Karma Tax Director of Engineering Patrick Fink underscored this point, noting that despite the “challenge” of filing taxes, more customers are transitioning toward filing taxes on their own. “Credit Karma Tax provides a seamless, mobile-first solution for individuals to file their taxes at no cost,” Fink said. “We’re excited to be joining an entrepreneurial team and continue to build simple, innovative tools for Cash App customers.” Credit Karma tax processed more than two million tax filers last year.
The acquisition is expected to close by the end of 2020 and is subject to customary closing conditions.
Square’s investment in its Cash App is timely. At the beginning of the month, the company noted in its third quarter financial reporting that Cash App had generated more than $2 billion in net revenue and $385 million of its gross profit for the quarter. The performance reflected gains of 5.74x and 2.12x, year over year, respectively.
The timeliness of the transaction also has a lot to do with Intuit’s acquisition of Credit Karma, which was cleared by the U.S. Department of Justice last week. Announced at the beginning of the year, the $7 billion deal is Intuit’s largest acquisition to date, and by shedding Credit Karma’s tax business, an obstacle to the union between the two companies has been removed. Intuit is the developer of it own online tax filing service, TurboTax.
“We are very excited to reach this important milestone today,” Intuit CEO Sasan Goodarzi said. “This brings us one step closer to transforming personal finance by making it simpler for consumers to find the right financial products, put more money in their pockets, and provide financial expertise and advice.”
The Credit Karma Tax announcement also comes one month after Square announced a $50 million investment in bitcoin, a sum the company said represented “approximately one percent” of the firm’s total assets as of the end of Q2 2020. Bitcoin trading has been available on Square’s Cash App since 2018 and, as of 2019, the company’s Square Crypto team has been contributing to bitcoin open-source efforts.
“We believe that bitcoin has the potential to be a more ubiquitous currency in the future,” Square Chief Financial Officer Amrita Ahuja said. “As it grows in adoption, we intend to learn and participate in a disciplined way. For a company that is building products based on a more inclusive future, this investment is a step on that journey.”
Buy Now, Pay Later Still Paying Off: One of 2020’s most unanticipated ecommerce trends, buy now pay later (BNPL) installment payment schemes, continues to show no signs of slowing down as the year draws toward a close. QuadPay, a BNPL innovator based in New York City that we featured earlier this month, just announced that it has added a new Chrome browser extension enables users to access Quadpay across all devices that can power a Chrome web browser.
“The introduction of Quadpay for Chrome will accelerate overall BNPL adoption for pandemic-weary consumers who are looking for flexible payment terms anywhere they shop without accruing new debt,” Quadpay Co-CEO Brad Lindenberg said. “It will also serve to drive new customers and increased loyalty for retailers at a critical time.”
Meanwhile, across the Atlantic, a U.K.-based startup that is trying out its own version of the buy now, pay later strategy has become the first BNPL outfit in the U.K. to be granted a consumer credit authorization with the Financial Conduct Authority (FCA).
Zilch, which was founded in 2018 by Philip Belamant, specializes in using open banking data and soft credit checks to help ensure that customers who use its BNPL service have sufficient creditworthiness and can afford their purchase. The company is partnered with Mastercard, enabling the merchant-agnostic Zilch to be used as an installment payment solution wherever Mastercard is accepted.
“Zilch was built with customer affordability at the forefront of everything we do and we have been working towards this point since our conception,” Belamant said. “Having secured our consumer credit authorization with the FCA is another step towards improving consumer financial wellness and removing credit related anxiety for our customers.”
Corn on the Card? A few weeks back we read about a $1 million investment that eco-friendly, U.K.-based search engine Ecosia made in TreeCard, a company that offers a debit card made out of wood.
And not just any wood. According to a post at the Ecosia blog, “each TreeCard will be unique, since the debit cards are made of sustainably sourced cherry wood.” The announcement notes that a single one of these trees can produce 300,000 cards.
Not to be outdone, Swiss-based UBS has introduced a credit card made out of an equally unlikely substance: corn.
Specifically, the new Optimus Foundation Credit Card Eco is composed of a plastic substitute known as PLA. This substance is derived from animal feed corn, and has a biodegradability of more than 80%.
“The transition to a more sustainable society is one of the greatest challenges of our time,” Karin Oertli, COO, personal and corporate banking and Region Switzerland, said. “UBS wants to be a part of the solution and lead the way with innovative ideas. Our new cards, which are made without plastic, are contributing to this.”
FinovateWest Digital is taking place this week. Our all-digital fintech conference runs from Monday, November 23 through Wednesday, November 25. Join us for both live and on-demand access to hours of innovative fintech demos, insightful analysis, and robust debate and discussion on the most important topics in fintech today.
Venture investing platform OurCrowd is taking home an investment of its own this week. The Israel-based company announced today it received $60 million in capital from Japan-based ORIX. The investment brings OurCrowd’s total funding to $172 million.
The goal of the funding and strategic partnership is to bring opportunities for Israel-based startups in the Asia region and will strengthen trade between the two regions.
“We are excited about investing in OurCrowd, Israel’s most active venture investor and one of the world’s most innovative venture capital platforms,” said ORIX UK CEO Kiyoshi Habiro. “We intend to be active partners with OurCrowd and help them accelerate their already impressive growth, while bringing the best of Israeli tech to Japan’s large industrial and financial sectors.”
Today’s deal isn’t the first time OurCrowd has made Japanese ties. Last year the company teamed up with Toyota Tsusho Corporation, a Japanese general trading company, to scout for startups that support autonomous driving industry.
OurCrowd was founded in 2013 and offers a platform that allows its 58,000 users to invest in 220+ pre-vetted startups and 23 venture funds. Jonathan Medved is CEO.
Global identity verification and authentication platform AU10TIX teamed up with ride sharing company Uber this week to make rides in certain areas a bit more safe.
Under a new program, Uber is requiring users in Mexico, Argentina, and Chile who pay for their ride in cash to scan an official identification such as their voting credentials, national ID, passport or driver’s license for verification.
“In the current business climate, more drivers and riders are wanting added reassurance for cash payment options, and we want to give them that,” said AU10TIX active deputy chairman Ron Atzmon. “Working together with Uber, we are delivering on this with AU10TIX’s identity document verification technology that provides the reliability, efficiency and scalability required to help provide peace of mind.”
AU10TIX offers document verification, identity verification, KYC, and AML tools to firms in a range of industries. The company leverages deep learning-based image processing, biometric technology, and data, to offer an autonomous solution that increases risk assessors’ confidence to shut down fraud before it occurs.
This week’s news marks a continuation of an existing relationship between the two players. Uber and AU10TIX first teamed up last year and recently expanded their partnership to electric scooters and Uber Eats.
Hinting at what’s next, AU10TIX CEO Carey O’Connor Kolaja said, “We expect this launch to set the stage for us to expand into other countries where Uber is experiencing elevated demand for cash payments.”
The word Plex may have been a meaningless word yesterday but starting today you can expect to see it pulse throughout news headlines.
That’s because Google is making updates to its Google Pay app and has announced that it has partnered with 11 banks and credit unions to offer a new mobile-first bank account integrated into Google Pay. The tech giant will begin offering these bank accounts, called Plex Accounts, starting next year.
Among those on the list of partner banks and credit unions are:
Citi
Stanford FCU
Seattle Bank
The Harbor Bank of Maryland
State Employees FCU
BankMobile
Bank of Montreal
First Independence Bank
BBVA
GreenDot
Coastal Community Bank
Plex accounts will offer both checking and savings accounts, will not charge monthly fees, won’t charge for overdrafts, and will not have minimum balance requirements.
Users can download Google Pay to join the waitlist or apply for a Plex account through Citi or Stanford Federal Credit Union, which are pioneering the new accounts.
Google is also revamping its Google Pay app to centralize around relationships. Users can pay and view past transactions in a stream-like interface that is organized around conversations and activity.
Customers can also use Google Pay to find offers and loyalty info on businesses they frequent. In fact, Google has forged merchant partnerships with Burger King, Etsy, REI Co-op, Sweetgreen, Target, and Warby Parker to help users view and activate rewards.
Capitalizing on the embedded finance trend, Google has made multiple purchasing experiences available from within Google Pay. Users can order food at 100,000+ restaurants, buy gas at over 30,000 gas stations, and pay for parking in more than 400 cities– all from within the app.
Google Pay aims to be a hub for three things: paying, saving, and insights. When users connect their bank accounts, Google will provide periodic spending summaries and show trends and insights over time. This will look different from a traditional budgeting interface. Instead of pie charts, the spending insights will focus on bite-sized pieces of information such as how much the user spent over the weekend, or how much they spent at a particular location.
This type of Big Tech bank is something that the fintech community has been talking about for a long time. Will Google’s Plex accounts challenge the challenger banks? I guess we’ll find out in 2021!
