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Ten Finovate Alums Join FedNow Instant Payments Pilot Program

Ten Finovate Alums Join FedNow Instant Payments Pilot Program
By David Penn Posted on
Categories: ACI Worldwide, Alumni News, Capital One, Citi, Daily news, Finastra, Finzly, FIS, Fiserv, Green Dot, Jack Henry, List series, Temenos

More than two years in the making, the FedNow payments initiative – launched by the U.S. Federal Reserve to accelerate payments and transfers – is picking up speed. The project currently has more than 110 banks, financial services providers, and other organizations slated to participate, and among them are ten Finovate alums.

“We’re gratified by the industry’s tremendous interest and willingness to devote time and energy to help us develop the FedNow Service,” Esther George, executive sponsor of the Federal Reserve’s payments improvement initiatives, said. George, who is also President and CEO of the Federal Reserve Bank of Kansas City, added that the pilot has had to “adjust” to accommodate greater than expected interest.

The idea behind the service is to expand the reach of instant payment services offered by financial institutions and enable businesses and individuals to send and receive instant payments, with full access to their funds within seconds. The FedNow Service will leverage the Federal Reserve’s FedLine network, which connects to more than 10,000 financial institutions directly or via their agents.

The pilot program is designed to review the technology’s features and functionality, assess the user experience, and greenlight the product for further testing and eventual general availability. Participating institutions will be retained, post-launch, to provide additional review and advice with regard to issues like adoption roadmap, industry readiness, and overall payments strategy.

“The FedNow Service marks a turning point in the industry’s move to making real-time payments a reality,” Booshan Rengachari, founder and CEO of Finzly, explained. Finzly is one of Finovate’s newest alums – most recently demoing its technology at FinovateWest Digital last fall – and is one of the participants in FedNow’s pilot program.

Rengachari further suggested that this “turning point” was a moment his company had anticipated. “We created our Payment Hub specifically to help FIs prepare and go to market faster with newer RTP networks,” he said. Finzly’s CEO added that this helps “address the challenges of offering single payment API for multiple payment networks without having to run disparate payment systems from multiple vendors.”

The 10 Finovate alums participating in the FedNow project are listed below.

Photo by Inge Wallumrød from Pexels

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What’s Next for Roostify After its $32 Million Series C Round

What’s Next for Roostify After its $32 Million Series C Round
By Julie Muhn (@julieschicktanz) Posted on
Categories: Alumni News, Daily news, Funding, Roostify

Digital home lending solutions provider Roostify landed $32 million in funding yesterday, bringing its total capital to $65 million.

The round was led by Ten Coves Capital, and included contributions from Cota Capital, Mouro Capital, Colchis Capital, Point72 Ventures, and JPMorgan Chase. The investment will help the San Francisco-based company make home lending faster and more transparent for all parties by leveraging AI.

The Series C funding comes at a time of growth for not only Roostify, but also the mortgage industry in general. The Mortgage Bankers Association (MBA) estimates that purchase originations will grow 8.5% to a new record of $1.54 trillion in 2021, thanks to low mortgage rates and low housing supply boosting demand.

Roostify has seen the effects of this growth. Last year, the company experienced a 250% increase in the number of applications submitted through its system and processed just under 1.5 million loan applications.

And while Roostify was prepared to handle both the volume and the demand for digital that came in 2020, many mortgage providers were not. “While the recent record-breaking origination volume was certainly welcomed, it also overburdened outdated mortgage lending processes and systems,” said Roostify Founder and CEO Rajesh Bhat. “We need to adopt a digital-first mentality that relies on technology-enabled transformation to solve real business problems. In order to thrive in a digital-first world, mortgage lenders need critical digital transformation initiatives, such as cloud-based technology, self-service solutions for consumers, and meaningful AI deployments.”

Founded in 2012, Roostify helps 200+ lending institutions collectively handle around $50 billion in loan volume each month.

As for what’s next, Roostify said it will continue to focus on leveraging data to transform the mortgage lending process. Key to this goal is the company’s partnership with Google Cloud AI. The two companies announced their collaboration last October in which Roostify began integrating Google Cloud’s Lending DocAI solution into its digital lending platform. As a result of Google Cloud’s AI and ML capabilities, Roostify’s digital lending tool now helps lenders analyze, categorize, and extract data from documents in an automized manner.

Despite the company’s growth, Bhat said that Roostify is “still in its infancy” in terms of its potential impact on the mortgage lending industry. “My team and I believe that it’s not enough to simply do digital lending better. We’re here to empower lenders to go beyond the efficiencies and cost-savings and forge a true connection with the end-user. We’re creating a world where financial success is possible for everyone, thanks to a simplified home lending experience.”

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Open Banking Innovator Token Scores $15 Million

Open Banking Innovator Token Scores $15 Million
By David Penn Posted on
Categories: Alumni News, Daily news, Funding, Token

In a round led by SBI Investment and Sony Innovation Fund, open banking payments platform company Token has raised $15 million in new funding. The Series B round also featured participation from existing investors Octopus Ventures, EQT Ventures, and Opera Tech Ventures, the VC arm of BNP Paribas. The company, which made its Finovate debut at FinovateSpring in 2015, now has $50 million in total capital.

“The market’s appetite for open payments accelerated dramatically last year as more merchants and payment providers have tuned into the cost and efficiency gains that they offer,” Token CEO Todd Clyde explained. “Token’s payment volumes have more than doubled every month since March and our platform is now processing live transactions through PSD2 APIs from over 600 banks in 14 countries across Europe.” He added that the investment was an affirmation that Token would continue to lead in the open payments space and will help fuel further development in the company’s technology.

An early innovator in the open banking payments space in the U.K., Token was one of the first companies in the U.K. to earn authorization from the Financial Conduct Authority (FCA) as a payment initiation and account information service provider (PISP, AISP). In 2018, Token was the first PISP to complete an end-to-end payment via a PSD2-compliant bank API.

“Token offers a credible alternative to card and wallet payments while helping merchants, PSPs, and banks offer streamlined UX’s that deliver better payment experiences for customers,” said Sony Innovation Fund Chief Investment Manager Gen Tsuchikawa. Token’s open payment and data services support the transition away from traditional payment methods and toward account-to-account payments. This not only helps lower the cost of digital payments; it also introduces a variety of use cases for open payments, from funding accounts and billpay to credit risk analysis and cash flow management. Combine this with what SBI Investment Director and Chairman Yoshitaka Kitao described as “Token’s unrivaled bank connectivity and depth in payment services” and you have a company Kitao called a “market leader” that “has continued to outperform the competition.”

Founded in 2015 and maintaining offices in London, San Francisco, and Berlin, Token brings Pan-European connectivity to more than 3,000 banks. The company’s partners include Sberbank, Konsentus, Caxton, and HSBC, which recently launched its online payment alternative, HSBC Open Payments.

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Cash Management Innovator MaxMyInterest Integrates with Redtail

Cash Management Innovator MaxMyInterest Integrates with Redtail
By David Penn Posted on
Categories: Alumni News, Daily news, MaxMyInterest

Cash management innovator MaxMyInterest has sealed a new integration deal with Redtail Technology, a leading client relationship management (CRM) firm. The integration will enable advisors and client service teams that rely on Redtail’s CRM to have one-click access to an onboarding solution that will give their clients access to preferred rates of up to 0.75% APY on their FDIC-insured cash deposits.

“We are excited to bring our cash management solution to Redtail users and honored to work with a company whose dedication to innovation in the advisor community matches our own,” MaxMyInterest Head of Partnerships and Business Development Michael Halloran said.

“Max provides advisors with a quantifiable value add by providing the ability to offer a high-yield solution for a typically overlooked and under-earning asset class,” Halloran added. “By integrating with Redtail, we are excited to help even more advisors grow their AUM, while their clients earn the highest yields in the market.”

A service of Six Trees Capital, MaxMyInterest made its Finovate debut at FinovateFall 2014. The company offers a way for individuals to optimize the interest they earn on their cash by providing a solution that automatically allocates cash balances to those banks offering the best interest rate at any given point in time. The technology ensures that balances are kept below the FDIC-insured limits at each institution, and features additional cash management functionality including monthly cash sweep and intelligent funds transfer.

Last year, MaxMyInterest announced an integration with Morningstar, combining its automated cash management technology with Morningstar ByAllAccounts’ data aggregation service. Last month, the company announced that veteran banking executive and fintech investor Jill Denham – founder and president of Authentum Partners – had joined MaxMyInterest’s advisory board.

“I see the MaxMyInterest team as true fintech innovators, dedicated to helping clients get the highest interest rates on insured deposits,” Denham said. “Their platform is notable in the manner in which the relationships they build between banks, depositors, and their financial advisors make all parties better off, and I’m excited to join and bring my expertise to their Advisory Board.”

Founded in 2013, MaxMyInterest is headquartered in New York City. Gary Zimmerman is CEO.

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TrueLayer Taps the Power of Open Banking to Launch PayDirect

TrueLayer Taps the Power of Open Banking to Launch PayDirect
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news

Financial app building platform TrueLayer has long been using the power of open banking to facilitate payment activities. Today, the U.K.-based company is taking another step to make the online payments experience even easier with the launch of a new payments product, PayDirect.

PayDirect combines open banking with Europe’s payment rails to offer a customizable solution for instant payments, instant payouts, and smoother payment reconciliation.

“PayDirect builds on our open banking expertise to streamline onboarding, pay-in and payout, to help operators deliver an experience that is fit for the digital age,” said the company’s Chief Product Officer, Ossama Soliman.

Because PayDirect relies on open banking and Europe’s fast payment rails, the solution circumvents many of the headaches associated with traditional card payments. Cards can expire, require manual entry, and are subject to spending limits. These hurdles generally result in an 85% success rate. PayDirect, in comparison, has a 96% success rate. PayDirect also eliminates chargebacks and reduces fraud by authenticating via biometrics directly with the consumer’s bank.

Here’s how the checkout experience works:

Financial services companies that use PayDirect benefit from a single interface for onboarding users, receiving instant deposits into their account, and providing instant withdrawals. Customers, on the other hand, benefit from low risk of fraud, faster refunds and withdrawals, less false positives during fraud checks, and a faster checkout experience.

Founded in 2016, TrueLayer is best known for its payments API that helps financial services companies provide online payments, bill payments, and account top-ups.

The company has offices in five countries across the globe, including London, Sydney, Milan, Hong Kong and Dublin. Francesco Simoneschi is co-founder and CEO.

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NCR Acquires Cardtronics in $2.5 Billion Deal

NCR Acquires Cardtronics in $2.5 Billion Deal
By Julie Muhn (@julieschicktanz) Posted on
Categories: Alumni News, Daily news, Mergers & Acquisitions, NCR Corporation

Cardtronics found itself at the center of a bidding war this past month, with NCR Corporation submitting the winning bid this week.

This comes after investment firms Apollo Global Management and Hudson Executive Capital initially agreed to buy the ATM operator last month. NCR agreed to a $2.5 billion deal, agreeing to purchase Cardtronics for $39 a share. This beat the bid from Apollo and Hudson, which totaled $2.3 billion at $35 per share. NCR was required to pay a termination fee of $32.6 million.

Cardronics CEO Edward H. West said that the deal is “a testament to the strength and value of Cardtronics, our talented team and customer base, and the complementary nature of our two businesses.”

NCR anticipates that Cardtronics’ Allpoint ATM network will complement its own payments platform and that combined they will connect retail and banking customers.

“This transaction accelerates the NCR-as-a-Service strategy we laid out at Investor Day in December, further shifts NCR’s revenue mix to software, services and recurring revenue, and adds value for our customers,” said NCR President and CEO Michael D. Hayford. “We have had a long-standing relationship with Cardtronics and its outstanding team… Simply put, we are better together.”

The deal, which has been approved by both companies’ Boards of Directors but is still subject to regulatory approvals and closing conditions, is expected to close in mid-2021. Once the deal is finalized, Cardtronics will become a privately held company.

Photo by Eduardo Soares on Unsplash

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Financial Wellness App for Kids Goalsetter Secures $3.9 Million in Seed Funding

Financial Wellness App for Kids Goalsetter Secures $3.9 Million in Seed Funding
By David Penn Posted on
Categories: Daily news, Diversity in Fintech, Funding, Women in Fintech

A black-owned, family-focused financial wellness app, Goalsetter, has raised $3.9 million in seed funding. The company said that the new funding will help it boost subscriber growth and enhance the Goalsetter offering, which includes a debit card (Cashola) and a financial literacy curriculum designed specifically for teens and youth.

The round was led by Astia, and featured participation from PNC Bank, Mastercard, US Bank, Northwestern Mutual Future Ventures, Elevate Capital, Portfolia Rising America, and Pipeline Angels, among other investors.

To be fair, “among other investors” is doing quite a bit of work. Goalsetter’s roster of angel investors is impressive, with National Basketball Association stars Kevin Durant, Chris Paul, and Baron Davis – as well as philanthropist Robert F. Smith, among the ranks. Also involved in the funding were actors Sterling K. Brown and Ryan Bathe.

Goalsetter, featured last fall as the Apple App of the Day, includes financial literacy modules that award users money for correctly answering questions on financial education topics (“Learn to Earn”), as well as a feature (“Learn Before You Burn”) that enables parents to freeze their child’s Goalsetter debit card if they have not completed their financial literacy lessons in a timely fashion.

Goalsetter is not only black-owned, it is female-run, as company founder and CEO Tanya Van Court underscored in the firm’s funding announcement. “As the only black-woman owned fintech company focused on the kid’s fintech space, we know how critical early finance education is to all kids in our country, and to black and brown kids in particular,” she said. Van Court emphasized the importance of raising children who are “smart spenders” rather than merely “conspicuous consumers,” and added that learning about financial education, saving, and investing are “the building blocks for achieving generational wealth.”

Founded in 2015 and headquartered in New York City, Goalsetter is partnered with Evolve Bank & Trust, which provides the company’s savings accounts. Goalsetter’s’ Cashola Prepaid Debit Mastercard is issued by MetaBank.

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Bryan Clagett Joins Moven as Chief Revenue Officer

Bryan Clagett Joins Moven as Chief Revenue Officer
By Julie Muhn (@julieschicktanz) Posted on
Categories: Alumni News, Daily news, Moven

Fintech veteran Bryan Clagett is making moves within Moven this year. Clagett was recently appointed Chief Revenue Officer of Moven after serving as an advisor to the New York-based company for six months.

“Bringing on Bryan was an essential next step in expanding our business maturity as we look to expand our U.S. market presence,” said Moven Founder Brett King. “Having worked on and off with Bryan for 10 years, I’m glad we finally snagged him at a time when our U.S. operations are accelerating rapidly and where COVID has created an extraordinary demand for digital differentiation in the retail digital banking space.”

Clagett’s fintech career started three decades ago, his most notable position being Chief Marketing Officer and Investor at Geezeo, where he served for ten years until the digital banking company was acquired by Jack Henry in 2019. During his tenure, Clagett helped Geezeo grow to more than 550 clients and achieve profitability.

Since his time at Geezeo, Clagett has served as an advisor to Conotext, Blip Labs, Procurity, and StrategyCorps.

“I’m extremely excited to join Moven to lead sales, marketing and partnership strategy as we evolve the company’s growth trajectory. Moven’s client-centric philosophy and emphasis on helping financial services via flexible and innovative, data-driven solutions made this a great fit for me. I’m looking forward to expanding into new markets, strengthening our relationships with our partners, and building the leading GTM function in our space,” said Clagett.

Moven’s appointment of Clagett comes after Moven made a major pivot in March of last year, dropping its B2C offering to focus on its enterprise arm that serves financial institutions. The new B2B approach has been flourishing in recent months, as banking-as-a-service tools have been gaining traction thanks to firms’ heightened focus on their digital presence.

Photo by NeONBRAND on Unsplash

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How Plaid is Helping to Level the Fintech Playing Field

How Plaid is Helping to Level the Fintech Playing Field
By Julie Muhn (@julieschicktanz) Posted on
Categories: Alumni News, Daily news, Diversity in Fintech, Plaid

Banking technology innovator Plaid is kicking off Black History Month ahead of schedule this year. The San Francisco-based company announced the launch of FinRise today. FinRise is a nine month accelerator program designed to support early-stage founders who are Black, Indigenous, or People of Color (BIPOC).

“While technology has come a long way to level the playing field, the reality is that many minority-owned businesses are still frequently denied access to some of the most basic resources needed to start and grow their businesses,” the company said in a blog post.

The program, which was developed during an internal hackathon, offers three key areas of support:

  1. Access to capital and services
    Plaid is leveraging its network of venture capital firms, network service providers, and accelerators to offer startups networking opportunities, discounted services and ad credits, and pitch practice.
  2. Resources for growth
    The program will kick off with a three-day virtual bootcamp led by Plaid experts and other thought leaders who will lead workshops on technical, product, and business topics. The sessions will focus on topics like communication and storytelling, engineering best practices, navigating the policy and regulatory landscapes, and designing user-centric experiences. 
  3. Mentorship and support
    Participants will receive support for nine months following the bootcamp. In addition to benefitting from others in the bootcamp cohort, startups will have access to a dedicated account manager, an internal skillshare network, and mentorship from Plaid leaders.

The FinRise program certainly fills a gap. Historically, much of the attention on diversity has been focused on driving more women into the fintech sector. With Black History Month starting in February and the Black Lives Matter Movement still fresh in everyone’s mind, we can expect to see more initiatives dedicated to solving the gap in ethnic diversity in fintech and the technology field in general.

The first FinRise program will take place from April to December, 2021.

Eligible startups are U.S.-based, BIPOC majority-owned businesses incorporated in the United States with two or more employees. A panel of Plaid leaders will select the participants, giving preference to those that offer a product that leverages financial data.

Founders can apply starting today and the first cohort will be announced in early March.

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Czech Buy Now Pay Later Firm Twisto Secures €16 Million

Czech Buy Now Pay Later Firm Twisto Secures €16 Million
By David Penn Posted on
Categories: Alumni News, Daily news, Funding, Twisto

We’ve now reached the point in the Buy Now Pay Later revolution in which BNPL companies are investing in other BNPL companies. Today we learn that Zip, a Buy Now Pay Later firm based in Australia, has joined Elevator Ventures in leading a $19.5 million (€16 million) funding round for Twisto, a buy now pay later company based in the Czech Republic.

“We want to teach people to take advantage of payment tools the right way,” company CEO Michal Smida said, “to help them improve their family budgets and better manage their cash flow, especially during the time of COVID.”

Also participating in the funding were Finch Capital, Velocity Capital, ING Bank, and UNIQA, an insurance corporation based in Austria. Twisto’s total capital now stands at more than $61 million (EUR 50.5 million). The company will use the additional capital to help fuel further expansion across Europe. “(The funding) is a huge step that helps us continue in our mission to become a leading app in CEE region,” the company wrote on its LinkedIn page this week.

Twisto, which made its most recent Finovate appearance at our European conference in 2018, is a pioneer in the Buy Now Pay Later market in Central and Eastern Europe. Approximately 170,000 consumers have used Twisto’s app, leveraging the company’s risk-scoring engine to access deferred financing options on goods purchased online. Twisto offers consumers an interest-free, three-installment payment option, and also provides paid, premium plans that include features like Split the Bill, Twist Card with Google Pay, and Family Travel Insurance.

Smida believes that Twisto can play a role in changing attitudes toward credit in Europe, and encourage more Europeans to pursue better financing alternatives. Late last year, Twisto teamed up with ING Bank Śląski to invest $4.5 million (PLN 17 million) to develop Twisto Poland, and extend the company’s operations in the CEE. Twisto was founded in 2013.

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Plastiq Announces Full Integration with Intuit QuickBooks

Plastiq Announces Full Integration with Intuit QuickBooks
By David Penn Posted on
Categories: Daily news, Intuit

With its announcement today, intelligent enterprise payment solutions provider Plastiq becomes the first company to fully integrate QuickBooks Online into its payments platform. The integration will enable businesses to take advantage of an automated payments reconciliation system that cuts costs, saves time, and eliminates the burden of manual data entry.

“Time and again, we’ve heard from our customers how crucial QuickBooks is to their record-keeping, but as a small business ourselves, we also recognize how time-consuming and error-prone it can be to manually maintain accurate QuickBooks records,” Plastiq co-founder and CEO Eliot Buchanan said. “By integrating QuickBooks into Plastiq, we’re giving businesses back vital time and resources while greatly reducing the chances of human error, enabling businesses to keep their eyes on innovating and propelling growth.”

The integration with QuickBooks will enable Plastiq users to import invoices directly, accelerating the process of identifying and populating essential data elements including vendor name, amount due, and more. After invoices have been paid via Plastiq, the payment information is exported back to QuickBooks to ensure accurate record-keeping for monthly reporting, tax returns, audits, and other compliance-related matters.

The full integration gives Plastiq an advantage over other platforms, whose partial integrations with QuickBooks still leave room for error, especially in the import/export process. This often means returning to manual data entry to make corrections, which not only takes up additional time and resources, but also re-opens the process to the potential for human error. With Plastiq’s full integration, by contrast, companies’ QuickBooks entries are “completely and accurately” updated to ensure both day-to-day accuracy as well as error-free monthly reconciliations and tax reporting.

Founded in 2012, San Francisco, California-based Plastiq ended 2020 with the launch of its new cash payments offering. The new feature enables businesses to pay all of their bills via their linked bank accounts, credit cards, or debit cards. Company Chief Product and Technology Officer Stoyan Kenderov said the addition provided a “fully integrated, intelligent payments solution that serves as a one-stop shop for all of businesses’ payment needs.”

Last fall, Plastiq’s Head of People, Angela Loeffler, was named to The Financial Technology Report’s 2020 Top 25 Women Leaders in Financial Technology roster. The company has raised more than $141 million in funding, most recently securing $75 million in a Series D round last spring led by B Capital Group.

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China’s ByteDance Launches Mobile Payments for Douyin

China’s ByteDance Launches Mobile Payments for Douyin
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news

Beijing-based ByteDance, the company behind TikTok, launched a mobile payments service for Douyin, which is China’s version of TikTok.

The new mobile payments service, Douyin Pay, will compete with the likes of Tencent’s WeChat Pay and Alibaba’s Alipay. “The set-up of Douyin Pay is to supplement the existing major payment options, and to ultimately enhance user experience on Douyin,” a Douyin representative told Reuters.

Douyin Pay will also help Douyin expand into the ecommerce scene. That’s because while users are watching short video clips of influencers promoting products on the Douyin app, they can pay using Douyin Pay instead of with competing payment services.

Helping to power the new payment service is Wuhan Hezhong Yibao Technology Co., which ByteDance purchased for an undisclosed amount in September of last year. Hezhong Yibao received a third-party payment license from China’s central bank in 2014.

Last fall, ByteDance achieved a valuation of $100 billion, making it the most valuable privately-held startup. In 2019, the company’s e-commerce and TikTok brands accounted for 17% of its total revenue. This figure is expected to expand this year as ByteDance taps into the potential of short-form video apps.

Another player vying for space in the Chinese payments arena is PayPal, which recently took full ownership of China-based GoPay. The move marks PayPal as the first foreign operator with 100% control of a Chinese payment platform. PayPal’s aim with the purchase is to provide a cross-border payments solution for Chinese consumers and merchants.

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