CFPB Proposes Open Banking Regulation

CFPB Proposes Open Banking  Regulation

The Consumer Financial Protection Bureau (CFPB) made a small move with big potential today. The U.S. agency issued an advanced notice of proposed rulemaking (ANPR) that requests information from the public on how consumers’ access to their financial records should be regulated.

The CFPB is asking “all interested parties” to comment on how the agency develops regulations to implement Section 1033 of the Dodd-Frank Act, which provides for consumer rights to access financial records.

This ANPR is the first step in creating formal regulation in the U.S. around open banking. This explicit regulation around structured data access is something that the E.U. has had in place via PSD2 for nearly three years.

The open banking environment in the U.S. is slightly hostile at the moment. This is partially because of the number of stakeholders involved. Consumers want to be able to use their financial data across a multitude of third party platforms, third party fintechs want to create compelling services to help individuals manage their finances, banks want to keep their consumers’ information secure, and data access providers are in the business of opening up the data.

Over the past few years, there have been multiple instances of large banks clashing with data access providers. Unfortunately, when banks shut out data access companies, the main loser is the end consumer, who usually ends up frustrated that their bank won’t connect to their favorite new fintech app. Banks would argue, however, that they are protecting the consumer from unnecessary risk.

Today’s move by the CFPB is a monumental step because once regulation is formalized in the U.S., all players will work from a standardized approach.

If you’re interested in submitting your thoughts to the CFPB, you can do so via the Federal eRulemaking Portal at https://www.regulations.gov or you can email 2020-ANPR-1033@cfpb.gov. Include Docket No. CFPB-2020-0034 or RIN 3170-AA78 in the subject line.


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PaymentCloud Goes Contactless with Paysley Acquisition

PaymentCloud Goes Contactless with Paysley Acquisition

Another day, another acquisition in the payments space: U.S. payment processor PaymentCloud announced this week that it has acquired contactless payments provider Paysley. Payment Cloud purchased the majority share of the Los Angeles, California-based company; the amount of the transaction was not disclosed.

Paysley’s technology enables customers to use their smartphone as the point of sale device – without having to set up an account with the merchant in advance. Paysley leverages QR code technology – an approach common to payments in South Africa where the company’s founders are from – to power secure mobile payments directly from the user’s card, Apple Pay, or Samsung Pay account.

And with one-click payment verification, Paysley’s solution works well with the kind of transactions that are increasingly popular in our post-COVID, gig economy, subscriber-based, P2P world.

“The future of payments is already shifting toward contactless means and now, with the acquisition of Paysley, we will be at the forefront of this shift,” PaymentCloud CEO Shawn Silver said. “I’m eager to bring this innovative solution to fruition at such a pivotal time.”

Currently in the process of relocating its 55 employees to new offices in Encino, California, PaymentCloud processes credit cards for thousands of clients around the country. The firm also works with more than 80% of the top digital independent sales organizations (ISOs) to help them boost approval rates, onboard merchants quickly, and limit attrition.

Named to Digital.com’s list of the Best Credit Card Processing Services of 2020, and ranked #295 on the Inc. 5,000, PaymentCloud was founded in 2016.


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Afterpay to Launch Checking and Savings Accounts

Afterpay to Launch Checking and Savings Accounts

What happens when you combine two of fintech’s hottest trends– buy now, pay later (BNPL) and banking-as-a-service? Afterpay is about to find out.

That’s because the Australia-based company has inked an agreement with Westpac to become the bank’s first client for its digital banking-as-a-service offering. The deal will allow Afterpay to offer WestPac checking accounts, savings accounts, and cash flow management tools to its 3.3 million Australian customers.

Afterpay will make the new banking products available in the second quarter of next year.

“The platform allows us to combine our banking experience with the innovation of our partners to support new customer experiences,” said Westpac CEO Peter King. “We look forward to working with Afterpay to deliver new products and services.”

By selling a banking-as-a-service offering, Westpac is finding a way to work alongside third party fintechs. Instead of competing with them, the bank will not only profit from them by selling its banking-as-a-service tools, but also acquire additional client accounts in the process.

Founded in 2014, Afterpay helps merchants to allow shoppers to pay for their purchases in four interest-free installments over a short period of time. The service is offered by more than 50,000 retailers across the globe and is used by more than 9 million shoppers. The company is listed on the Australian Stock Exchange under the ticker ASX and has a market capitalization of almost $29 billion. Anthony Eisen is CEO.

Today’s news comes a week after the Australian Transaction Reports and Analysis Centre (Austrac) cleared Afterpay from anti-money laundering accusations.


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Versapay Merges with Solupay to Enhance B2B Payments for Canadian SMEs

Versapay Merges with Solupay to Enhance B2B Payments for Canadian SMEs

A new merger in the payments space will bolster the accounts receivables and payments solutions available to small and medium businesses. Versapay, a customer-centric order-to-cash solution provider based in Canada, announced this week that it has completed its merger with Twinsburg, Ohio-based, payment services provider Solupay. The combined entity will operate as Versapay in name and will be led by the company’s current CEO Craig O’Neill.

Financial terms of the deal were not disclosed. But the merger does include a pair of Solupay subsidiaries: payment processors ChargeLogic and 2CP. Solupay’s technology simplifies payment acceptance, provides click-to-pay invoicing, and automates AR processes, and will give Versapay additional opportunities to serve its SME customers.

“Simplifying invoice presentment and reducing the cost of accepting digital payments are the building blocks for a customer-centric order-to-cash process,” O’Neill said. “We’re excited to welcome the complimentary capabilities of the Solupay team and its innovative integrated payments and AR automation technology as we seek to better serve businesses through their digital payments transformation.”

Founded in 2006 and headquartered in Toronto, Ontario, Canada, Versapay has a worldwide network of 8,000 customers and 50,000 users, accounting for $10 billion in payment volume a year. The company’s solutions help businesses accelerate cash conversion, automate manual processes, as well as reduce costs and boost efficiency.

Versapay was acquired by Great Hill Partners in February in a deal that valued the company at $96 million (CAD $126 million).


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Billtrust to Make Public Debut at $1.3 Billion

Billtrust to Make Public Debut at $1.3 Billion

Accounts receivable automation company Billtrust announced today it agreed to a merger with South Mountain Merger Corporation, a publicly-traded special purpose acquisition company (SPAC).

The combined entity, which will operate under the name BTRS Holdings Inc., will be a publicly traded company with a value of approximately $1.3 billion. BTRS is expected to trade on The Nasdaq Stock Market under a new ticker symbol.

Billtrust’s management team, which is led by Flint Lane, Founder and CEO, Steve Pinado, President, and Mark Shifke, CFO, will continue to lead the Company.

“As we begin our journey as a public company, we are thrilled to partner with the South Mountain team and know we will benefit from their extensive industry experience,” said Lane. “We believe accounts receivable (AR) is ripe for innovation, and together we will continue to invest in opportunities to scale the business, growing both organically and inorganically, as we seek to tackle the large total addressable market. As a leader in AR automation, we believe Billtrust is well-positioned to own a disproportionate share.”

Founded in 2001, Billtrust and has since worked to create a suite of solutions that simplify and automate B2B commerce through cloud-based software and integrated payment processing solutions. In 2018, the company launched its Business Payments Network (BPN). The network connects buyers, suppliers, and financial institutions to simplify and streamline electronic payment acceptance.

The transaction is expected to close in early 2021 and is subject to stockholder approval and closing conditions.


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Thought Machine to Power Credit Product for Curve

Thought Machine to Power Credit Product for Curve

Cloud banking technology provider Thought Machine has been tapped by U.K.-based Curve to power its new buy now, pay later (BNPL) offering that allows customers to pay for purchases in installments.

The new product, Curve Credit, allows users to spread their payments over three, six, or nine month periods. Thanks to Thought Machine’s core platform and Curve’s Go Back in Time technology, credit can be applied both retrospectively and prospectively.

The retroactive payment functionality will rely on the smart contracts product-building system in Vault, Thought Machine’s cloud native core banking engine.

“Thought Machine is the only technology that allows us to deliver the flexibility and manageability we desired for our customers,” said Head of Curve Credit Paul Harrald. “Curve Credit’s ethos is about responsible lending and responsible borrowing. Alongside Curve OS, this three-way dynamic will be able to give each customer the clearest possible terms via a simple and beautiful product and experience.”

Founded in 2014, Thought Machine provides core banking technology for tier one banks, neobanks, and fintechs across the globe. The company counts Lloyds Banking Group, Standard Chartered, Atom bank, Monese, and SEB among its clients. Thought Machine’s funding total was boosted to more than $148 million in July of this year after the company closed a $42 million round.

Curve, which landed a partnership with Samsung Pay in August, enables users to consolidate all of their cards onto a single smart payment card. The company was founded in 2015 and has raised just over $74 million.


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NYMBUS Helps PeoplesBank Launch Digital-First ZYNLO

NYMBUS Helps PeoplesBank Launch Digital-First ZYNLO

Two of the biggest phenomena in fintech worldwide: the rise of open banking and the growth of digital-first (and digital-only) banking, continue to make an impact on fintech as well. One example of that is today’s news that NYMBUS has partnered with PeoplesBank to help the Massachusetts-area financial institution launch its digital-only extension, ZYNLO.

“Only NYMBUS provided us a comprehensive strategy to quickly introduce a new digital-only effort,” PeoplesBank Brian Canina, Chief Financial Officer said. “Backed by and running in parallel to our established institution with 135 years of experience in creating satisfied customers, ZYNLO delivers the ideal combination of digital banking convenience and security that today’s consumers depend on.”

PeoplesBank’s new offering is a no-fee savings account that includes features like Zyng, a round-up savings benefit that rounds up debit card purchases to the nearest dollar and adds the difference to the customer’s ZYNLO account. The company is currently offering a 100% round-up match for the first 100 days, with a 10% match on debit card transactions afterwards. ZYNLO also offers Early PayDay and daily balance and payment alerts, and all deposits are insured via FDIC and DIF.

Today’s news represents an extension of the partnership between the two companies. At the beginning of the year, PeoplesBank announced that it would deploy NYMBUS’ SmartMarketing and SmartOnboarding platform to boost revenue growth and enhance customer engagement. With more than $3 billion in assets under management PeoplesBank is the largest community bank in Western Massachusetts, with 20 banking centers in Massachusetts and Connecticut.

Founded in 1885 and headquartered in Holyoke, Massachusetts, PeoplesBank recently announced that its latest new branch in South Hadley will feature VideoBanker ITMs, a combination of an ATM and a virtual teller that Canina said mitigates the need for drive-up teller windows. The innovation became a necessity when the municipality issued a zoning restriction that required the new branch building to be located closer to the street, making a traditional drive-up window problematic.

Most recently demonstrating its SmartLaunch digital banking solution at FinovateFall last year, NYMBUS has since inked partnerships to deploy the technology with Centier Bank, BankMD, and Pacific National Bank. Over the summer, NYMBUS secured $12 million in growth funding, taking the company’s total capital to more than $45 million. That same month, NYMBUS added Jim Modak as President and Chief Financial Officer.

In September, the company named former Kony DBX DVP and General Manager Jeffery Kendall as CEO. Kendall replaced former CEO and company founder Scott Killoh, who will continue with NYMBUS as executive chairman of the company’s board of directors.


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CUNA Mutual Group Snaps Up CuneXus to Fortify Digital Lending

CUNA Mutual Group Snaps Up CuneXus to Fortify Digital Lending

Lending and marketing automation platform CuneXus announced this week it has agreed to an acquisition by CUNA Mutual Group. Terms of the deal were not disclosed.

CUNA began its relationship with CuneXus in 2017 when its venture capital entity, CMFG Ventures, became an early-stage investor in the Santa Rosa, California-based company.

“We are continuing our journey into a more diverse, digital-first world,” said Robert N. Trunzo, president and CEO of CUNA Mutual Group. “Our company is committed to using technology to enhance consumers’ access to financial solutions that work for them and create a more equitable financial system and society. This is a top priority for all of our core businesses.”

CuneXus works with more than 140 financial institutions to help lenders maximize customer relationships by offering turn-key access to its application-free consumer lending tool, cplXpress. The company helps banks offer pre-approved, “click-to-accept” consumer loans to customers that are personalized to appear where and when they need them.

“CuneXus is on a strong growth trajectory, and adding their expertise and product solution to our company portfolio allows us to maximize its growth potential and enhance our long-standing efforts to make a brighter financial future accessible to everyone,” Trunzo added.

Founded in 2008, CuneXus has raised $6.7 million.

“We are genuinely excited to join the CUNA Mutual Group family,” said CuneXus CEO Dave Buerger. “Our capabilities and culture align very well, and we believe we can greatly enhance CUNA Mutual Group’s digital evolution in the lending space.”


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Clair Secures Seed Funding to Help Gig Workers Get Paid

Clair Secures Seed Funding to Help Gig Workers Get Paid

For workers in the gig economy, getting paid as quickly as possible is a critical way to manage – to say nothing of survive on – an often-irregular source of income. And with the onset of the COVID-19 crisis, even those working in the traditional, 9-to-5 economy are feeling new levels of financial anxiety.

Responding to this challenge is Clair, a New York-based startup founded last year by Nico Simko (CEO), Erich Nussbaumer (CPO), and Alex Kostecki (COO). The social-impact fintech believes that workers should have access to their wages, without any additional fee or charge, at the end of the work session rather than at some arbitrary point in the future. This week, the company announced a $4.5 million seed fundraising that will help it fulfill its mission of enabling workers to “freely access money they’ve already earned,” said Simko in a statement.

“There are more payday lenders than McDonald’s in the U.S. that charge on average more than 300% annual interest on loans,” he said. “So we have one simple vision: it’s time for change.”

The round was led by Upfront Ventures and featured participation from Founder Collective and Walkabout Ventures. Also involved in the investment were Michael Vaughan, former COO of Venmo, and Paul Appelbaum, founder of Seamless. Combined with $55,000 in pre-seed funding the company picked up in the fall of last year, Clair’s total capital adds up to over $5 million.

Clair combines digital banking functionality – complete with savings account and debit card – with an Instant Pay Access feature that mitigates the temptation workers may feel to resort to high-interest payday lenders. Workers at participating businesses sign up for the service as they would for direct deposit. Once onboarded, they can request free advances on a portion of their earned income via the Clair app (or a partnering app). The advance is loaded onto a Clair debit card and the amount is deducted from the worker’s account on the subsequent payday.

According to Clair, Instant Pay Access provides a reduced reliance on payday loans and more income security in the event of emergency for workers, and turnover reduction and lower check printing costs for businesses. Upfront Ventures partner Aditi Maliwal, who sits on the Clair board of directors, praised the company’s business strategy of avoiding high customer acquisition costs by “creating a product embedded in other services that workers already use.” Simko echoed this point, highlighting not just Clair’s value to SME payroll operations, but also the value that fintechs bring to small businesses more generally.

“With small business employees making up nearly 50% of the country’s workforce, employers often don’t have enough scale to offer better benefits on their own, so they look towards their software providers,” Simko said. “By enabling these providers, we are bridging a gap and empowering them with functionalities their users want.”


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Stripe’s Newest Buy Makes Inroads to Africa

Stripe’s Newest Buy Makes Inroads to Africa

Stripe has been partnered with Nigeria-based Paystack for quite some time, even leading Paystack’s Series A financing round in 2018. Today Stipe unveiled it is taking things a step further.

The San Francisco-based company has agreed to acquire Paystack for an undisclosed amount. Additional terms of the deal were not disclosed but Stripe made it clear that Paystack will operate independently, growing its operations in Africa and adding more international payment methods.

“This acquisition will give Paystack resources to develop new products, support more businesses and consolidate the hyper-fragmented African payments market,” said Matt Henderson, Stripe’s business lead in EMEA. “We can’t wait to see what they will build next and how their growth can turbocharge the African tech ecosystem.”

In the video below (which is well-worth watching) Paystack Co-founder and CEO Shola Akinlade describes how the company got its start and why it chose to align with Stripe.

Stripe will eventually embed Paystack’s capabilities into its Global Payments and Treasury Network (GPTN), a platform that moves money across 42 countries.

Paystack, which counts 60,000 business clients and processes more than half of all online transactions in Nigeria, plans to expand across Africa. The company recently launched a pilot with businesses in South Africa.

As for Stripe, today’s move furthers its geographic expansion efforts that have been on the rise as of late. In the past year-and-a-half the company has added 17 countries to its platform. Stripe Co-founder and CEO Patrick Collison told TechCrunch that there is “enormous opportunity” in Africa. “In absolute numbers, Africa may be smaller right now than other regions, but online commerce will grow about 30% every year. And even with wider global declines, online shoppers are growing twice as fast. Stripe thinks on a longer time horizon than others because we are an infrastructure company. We are thinking of what the world will look like in 2040 to 2050.”

Stripe recently closed a $600 million round of funding and is valued at $36 billion.


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SoFi Launches Social Trading Investing Platform

SoFi Launches Social Trading Investing Platform

SoFi has spent the past few years broadening its focus. What launched as an alternative lending company has emerged as a platform that provides a deeper breadth of banking services including insurance, checking accounts, credit score monitoring, investing, estate planning, and small business financing.

After building all of these tools, SoFi began focusing on building something different– community. The fintech offers a membership program with a range of perks including career coaching and financial planning.

Today, the company is leveraging its community in the launch of social trading and investing features. The new capabilities allow users to share their investment portfolios and discover and follow the holdings, watchlists, and activity of fellow members who opt in to the feature.

“According to SoFi’s research, about 70% of SoFi Invest member respondents indicated that they regularly (at least weekly) discuss their investments with family members, peers, or colleagues,” said SoFi CEO Anthony Noto. “Our new social investing features not only help us live up to our name of Social Finance, but provide ways for investors to see specifically what members on the platform are doing with their investment decisions, discover new investment ideas, and see how they stack up in their investing performance. Given the importance of investing early and consistently, we are thrilled to be able to provide a more informative, engaging, interactive mobile investing experience rooted in building better investing habits.”

To encourage social interaction, SoFi’s new tools allows users to comment on and react to the others’ trades and compare their performance on dynamic leaderboard.

For privacy purposes, participation is optional and members are not automatically enrolled. Additionally, the amounts of investment portfolios are hidden from other users.

If you’ve studied fintech for any length of time this should sound familiar. U.K.-based eToro launched its CopyTrading platform in 2011. This social investing platform is different from SoFi’s in that it pays top investors when others copy their trades.


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Greenlight to Power Chase’s New Bank Account for Kids

Greenlight to Power Chase’s New Bank Account for Kids

When it comes to payment and savings account services designed for minors, most large banks have stayed on the sidelines. In fact, much of the development has come from fintechs that layer kid-friendly tech on top of existing bank accounts.

This bank-fintech partnership is exactly what Chase is relying on for its new bank account for kids that it is launching this week in collaboration with Greenlight, a company that provides financial tools for children. The new offering, Chase First Banking, aims to help parents manage allowances, complete and check off chores, monitor spending, and help kids save towards a goal. 

“Families are juggling so many more responsibilities today than ever before,” said JPMorgan Chase Head of Digital for Consumer and Community Banking Allison Beer. “To help, we’ve made it easy for parents to manage kids’ allowances, keep track of chores and teach important financial skills from within the Chase Mobile app.”

The accounts have three features that encourage kids to earn, spend, and save. The Earn function allows parents to set allowances and assign chores and allows the child to check off when each chore has been completed. The Spend tool provides kids with their own prepaid debit card that they can use to shop at stores that their parents have approved. Parents have ultimate control of the card and can lock or freeze it at any time. The Save function helps the child set aside money toward a goal and allows parents to move funds, as well.

Chase First Banking accounts, which are aimed at grade school children, are available for free to Chase retail deposit account customers. The bank already offers checking and savings accounts tailored to high school and college-aged users.

Founded in 2014, Greenlight competes with startups such as Oink and FamZoo. In addition to the Earn, Spend, and Save features offered with Chase, Greenlight’s B2C offering, which costs $5 per month, also offers a Give tool and will soon launch an Invest feature. The company rebranded earlier this year which helped it double its growth and set it on track to double again by the end of the year. Late last year Greenlight raised $215 million. The company is valued at $1.2 billion.


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