Daily news

Libra Association Rebrands as Diem Association

Libra Association Rebrands as Diem Association
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news

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).

Photo by Thought Catalog on Unsplash

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Square Takes on Taxes as Justice OKs Intuit, Credit Karma Acquisition

Square Takes on Taxes as Justice OKs Intuit, Credit Karma Acquisition
By David Penn Posted on
Categories: Alumni News, Credit Karma, Daily news, Intuit

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.”

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Buy Now Pay Later Meets Open Banking; Payment Cards and the Post-Plastic Era

Buy Now Pay Later Meets Open Banking; Payment Cards and the Post-Plastic Era
By David Penn Posted on
Categories: Daily news, MasterCard

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.

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OurCrowd Pulls in $60 Million to Deepen Ties in Japan

OurCrowd Pulls in $60 Million to Deepen Ties in Japan
By Julie Muhn (@julieschicktanz) Posted on
Categories: Alumni News, Daily news, Funding, OurCrowd

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.

Photo by CHUTTERSNAP on Unsplash

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AU10TIX to Power ID Verification for Uber Drivers

AU10TIX to Power ID Verification for Uber Drivers
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news

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.”

Photo by Barna Bartis on Unsplash

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Google Teams with 11 Banks to Launch Plex Bank Accounts

Google Teams with 11 Banks to Launch Plex Bank Accounts
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news, Google

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!

Photo by Kai Wenzel on Unsplash

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Infinicept Secures Funding from Mastercard, MissionOG

Infinicept Secures Funding from Mastercard, MissionOG
By David Penn Posted on
Categories: Daily news, Funding, MasterCard

Another day, another opportunity for Mastercard to find itself in the fintech headlines. Last week, we highlighted a handful of Finovate alums that earned spots in Mastercard’s Start Path program. Then, yesterday, we covered news that the company had enhanced its Mastercard Track Business Payment Service to help modernize business payments. We also reported on Monday that Mastercard had earned the go-ahead from the U.S. Department of Justice to complete its big acquisition of data aggregation innovator Finicity.

Today’s Mastercard-related performance comes in more of a “Best Supporting” role as the company – along with VC firm MissionOG – announces an investment in payments facilitator-services provider Infinicept. The amount of the funding was not disclosed, but Infinicept’s co-CEO and co-founder Todd Ablowitz highlighted adding engineering talent and investments in product management and customer service as ways Infinicept plans to put the new capital to use. He also said that Infinicept is experiencing a 8x growth rate, as well.

“The opportunity in front of us is enormous, and we’re going to invest intelligently and aggressively to meet the needs of our customers,” added Deana Rich, co-founder and co-CEO of Infinicept. “Our customers need the ability to get payments up and running on their own terms, without having to do all the work themselves. While others try to lock-in customers with templated solutions, Infinicept puts software companies in control of their payments experience – and their payments future.”

Infinicept enables businesses to offer embedded payments to a wide variety of customers, including in health care management and hospitality. Infinicept’s platform offers software providers, financial institutions, marketplaces, and more a payments infrastructure that can help them generate payments revenue, onboard merchants faster, and improve the overall customer experience.

This week’s investment is the latest expression of a partnership between Mastercard and Infinicept that extends back to 2012. Infinicept is an alum of Mastercard’s Start Path accelerator, joining the program as part of the 2019 cohort. Infinicept’s first customers were Stripe and Shopify in 2011.

“Infinicept’s technology now supports acquirers and payment facilitators with the critical tools to help businesses around the world manage payments,” Mastercard EVP of Merchant Solutions and Partnerships Zahir Khoja said. “Mastercard’s technology and scale, with partners such as Infinicept, is helping our larger acquirer ecosystem support businesses around the world to accelerate growth, modernize transactions, and ensure businesses have the tools to succeed.”

Founded in 2011, Infinicept is headquartered in Denver, Colorado.

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Chase Launches its Own BNPL Tool

Chase Launches its Own BNPL Tool
By Julie Muhn (@julieschicktanz) Posted on
Categories: Chase Bank, Daily news

If you’ve started online shopping for the holiday season you’ve likely seen buy now, pay later (BNPL) offerings at the checkout. And starting today, Chase cardholders have even more options to pay over time.

That’s because Chase is launching My Chase Plan, a BNPL option available to Chase credit cardholders. The new tool allows users to select a purchase of $100 or more they’ve made within the last 90 days and choose a payment duration ranging from three to 18 months.

Cardholders will not be charged interest on the purchase but they will face a monthly fee for using the service. Chase doesn’t list a range for the fee but the bank does disclose that the fee is based on the amount of the transaction selected, the number of billing periods, and “other factors.” In the example on Chase’s website, a purchase of around $587 split into six month increments incurs a monthly fee of $2.35.

“We developed My Chase Plan to provide our cardmembers with more flexibility and control of their payment options,” said Chase Card Services General Manager of Lending and Pricing Anthony Cirri. “We are thrilled to offer My Chase Plan as a tool to help cardmembers make the most of their money and pay for their purchases over time. With the holidays fast approaching, this embedded card feature can be used to pay off gifts and everyday purchases alike.”

From a business model perspective, Chase is taking a different approach than traditional BNPL players. Most BNPL companies work through merchant partners, charging the retailer a fee for each customer that makes a purchase using the BNPL technology. This offers a large incentive to the customer, since they receive more flexible purchase terms for free. Chase is coming at the equation from the other side, targeting the customer after they’ve made the purchase and charging them instead of the merchant.

Chase’s new feature is reminiscent of U.K.-based Curve’s tool that allows users to “go back in time” and switch their purchase from card-to-card. While Curve doesn’t enable users to pay over time, it does help with users who may have paid with the wrong card or need to free up some cash on a debit card by shifting a purchase to a credit card.

Photo by Lukas Blazek on Unsplash

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Mastercard Modernizes Business Payments with Multi-Rail Strategy

Mastercard Modernizes Business Payments with Multi-Rail Strategy
By Julie Muhn (@julieschicktanz) Posted on
Categories: Alumni News, Daily news, MasterCard

Mastercard has been busy this week. In addition to finalizing its acquisition of data aggregation provider Finicity, the company is also enhancing its Mastercard Track Business Payment Service.

Mastercard launched its Track Business Payments Service in May of this year to help modernize the business payments experience. The overall goal of the initiative has been to provide businesses with a richer data exchange experience and greater control over payments.

Today’s launch adds account-to-account (A2A) functionality to the Track Business Payments Service. The new addition offers businesses a similar experience for A2A payments as they had with card payments. That is, businesses can exchange data with greater efficiency and facilitate payments across multiple payment rails including Real Time Payments (RTP) and the Automated Clearing House (ACH). Overall, the new tool enhances security, as it doesn’t require suppliers to share their bank account details with buyers, nor does it require buyers to store those details.

“Today, the vast majority of B2B payments are made through bank account transfers. Extending Mastercard Track Business Payment Service to support these transfers is a step on our way to building out the best and most secure B2B payment network in the world,” said Mastercard EVP of Global Commercial and B2B Solutions James Anderson. “Our commitment to supporting multiple payment rails has always been about helping customers operate more efficiently and effectively leveraging all the capabilities available in the market with as little change as possible.”

The A2A functionality is now available for Track Business Payments Service customers in the U.S. Mastercard plans to roll out the service for users in all geographies by the end of next year.

“This milestone is another step in the journey away from paper-based frustration, incomplete data, and manual reconciliation work and toward a fully digitized business payments process,” added Anderson.

Photo by Natalia Y on Unsplash

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PayPal Launches P2P Payments Tool in Collaboration with American Express

PayPal Launches P2P Payments Tool in Collaboration with American Express
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news, PayPal

PayPal, Venmo, and American Express have partnered up this week in a move that will help deal with the awkwardness of group expenses.

The group is launching Amex Send and Split, a tool that enables eligible American Express cardholders to split purchases with and send money to Venmo and PayPal users directly from the Amex app.

The send feature enables cardholders to send money via Amex to their friends on PayPal or Venmo. Users can make transfers in real time using their spend balance within the app or by paying with their Amex credit card balance.

With the split purchases feature, cardholders can select any pending or posted purchases to split with other PayPal or Venmo customers. Customers will receive payment as a statement credit on their Amex card.

The general terms of the money transfer and purchase splitting capabilities aren’t too compelling. Since all parties to the transaction need to be existing PayPal or Venmo users, there is not much incentive for them to conduct their P2P money transfer activities in the Amex app.

The one outstanding benefit to the new co-branded launch, however, is that when users send money and split purchases within the Amex app they can do so using their available credit. While they can also do this within PayPal and Venmo, there may be extra friction involved for the user to add their card details.

Photo by Foodguide App on Unsplash

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Snapchat Parent Company Acquires Voca.ai

Snapchat Parent Company Acquires Voca.ai
By Julie Muhn (@julieschicktanz) Posted on
Categories: Alumni News, Daily news, Mergers & Acquisitions, Voca.ai

With all of the drama around TikTok these days, you may have forgotten about Snap. Formerly known as Snapchat, the photo messaging app allows users to send and receive ephemeral messages complete with fun filters, animation, and augmented reality.

It appears that Snap may be on the verge of change, as the company reportedly acquired Voca.ai, a smart voice assistant that helps replace customer service agents in call centers. The acquisition, which was first reported by Globes and later picked up by TechCrunch, is estimated to be around $70 million.

While one of the main use cases for Voca.ai’s technology is phone-based debt collection, it can also be used for surveys, customer service, appointment scheduling, and lead qualification. As the name suggests, Voca.ai leverages AI to imitate human representatives’ responses. To create a convincing, human-sounding cadence the technology adds pauses and filler words such as “um.” 

Snap may intend to leverage Voca.ai to build out a new voice command feature. According to Globes, “This range of abilities in identifying speech and producing artificial speech have attracted Snapchat, which in June launched a voice command function for users to request filters, which can alter their appearance. For example, the user can ask for their hair to turn pink, and the voice command function ensures that the operation is completed.”

Voca.ai was founded in 2017 and is headquartered in Herzliya, Israel. The company has raised $6 million across two rounds of funding. Voca.ai won a Best of Show award at FinovateSpring last year after company CEO Einav Itamar demonstrated how a bank used the AI voice agent to follow up on a loan inquiry.

Photo by Thought Catalog on Unsplash

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Zopa Launches Credit Card with Unique Feature

Zopa Launches Credit Card with Unique Feature
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news, Zopa

News first broke of Zopa’s plans to launch a bank in November of 2016. During the four-year-period since then, the U.K.-based P2P lender has been slowly progressing toward becoming a fully fledged challenger bank.

Today, Zopa took this initiative a step further, launching a credit card offering. Zopa said that the card is specifically designed to help users stay in control of their money and their debt.

The card has two tools that help users manage their money. The first is called Safety Net. The Safety Net feature allows users to lock up some of their available credit balance to use for small, unexpected expenses. Customers decide how much of their available credit to lock away and can easily unlock access to the credit via the mobile app.

The card, in combination with the mobile app, also offers real time balance updates. The feature enables users to see how much credit they have available in real time, without needing to wait for the transaction to show up in their balance statement.

“The credit card market hasn’t caught up with the standard of other digital products and customers have been waiting too long for a better experience,” said Zopa CEO Jaidev Janardana. “At Zopa, we believe that credit cards need to be revolutionized so we have built a card designed around putting the customer in control. Industry firsts such as our Safety Net feature and handy tools like real time credit balance updates help customers manage their money effectively, enabling them to build a good credit profile.

Zopa’s credit card also offers users the ability to view spending categories, instantly freeze and unfreeze the card, turn on/off certain spending categories such as gambling and cash withdrawals, and make contactless payments.

The Safety Net tool is just the latest example of Zopa launching customer-first products for the underbanked population. In October of last year the company launched Borrowing Power, a tool that leverages AI to show users what makes up their personal borrowing power and guide them toward actions to help improve it.

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