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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
Tonik is adding two new loan products to its suite of banking tools.
The new offerings include Flex Loan, an unsecured personal loan, and Big Loan, a home equity line of credit.
Tonik received the first digital bank license issued by the Philippines’ central bank, Bangko Sentral ng Pilipinas (BSP).
Tonik is one of the first neobanks in the Philippines. Today, the Singapore-based fintech announced it is adding two new lending products to its existing suite of digital banking tools.
The new offerings are called Flex Loan and Big Loan. Flex Loan is an unsecured personal loan that doesn’t require collateral and offers borrowers up to $4,300 (Php 250,000) at a rate of 2.49% monthly interest for a term of up to 24 months. Big Loan is a home equity line of credit of up to $43,000 (Php 2,500,000) that enables users to borrow against the equity on their home when they offer their property to the bank as collateral.
“Powered by our purely digital platform and the most competitive market rates, Flex Loan and Big Loan offer accessible, safe, and badly needed credit for the huge underserved market in the Philippines,” said Tonik Founder and CEO Greg Krasnov. “With these new loans, we are excited to speed up efforts in accelerating credit inclusion in the country.”
Big Loan may be Tonik’s most notable new product. That’s because home equity lines of credit are relatively new to the Philippines. Tonik’s Big Loan offering marks one of the first fully digitalized collateral product available in the Philippines. Once the borrower applies for the loan and submits the necessary paperwork, Tonik makes the funds available within seven business days.
Tonik’s other banking tools include Stash, a savings account; Group Stash, a group savings account; Time Deposit, a high-interest savings account; Quick Loan, its flagship personal loan; and physical and virtual debit cards.
Tonik received the first digital bank license issued by the Philippines’ central bank, Bangko Sentral ng Pilipinas (BSP). Founded in 2018, and with offices in Singapore, Manila, and Chennai, Tonik has raised $175 million from top international investors, including Sequoia India, Point72 Ventures, and Mizuho Bank.
Finastra has announced a strategic alliance with Ohio point-of-sale (PoS) financing and Buy Now, Pay Later (BNPL) company Jifiti.
The alliance will bring new PoS financing capabilities to financial institutions in Finastra’s Banking-as-a-Service ecosystem.
Finastra was formed via a merger between Finovate alum Misys and D+H in 2017.
Just last week we highlighted the state of Ohio as a place where innovation in fintech and insurtech was thriving. Today, we learn that financial software company and Finovate alum Finastra has inked a strategic alliance with one of Ohio’s fintech innovators: Columbus-based point of sale financing company and Buy Now, Pay Later platform Jifiti.
The collaboration will bring embedded financing capabilities to financial institutions in Finastra’s Banking-as-a-Service (BaaS) ecosystem. These capabilities will enable banks to empower merchants with point-of-sale financing options such as Buy Now, Pay Later and split payments. Whether transacting online, in-store, or by call center, consumers will be able to access this expanded range of financing options. Jifiti’s platform will be pre-integrated with Finastra’s systems, making deployment easy for financial institutions currently using Finastra to power their core banking operations.
Finastra Senior Director for Solution Management, BaaS & Orchestration Jeanette Kescenovitz put the partnership in the context of the recent launch of Finastra’s BaaS embedded consumer lending offering. “We look forward to leveraging Jifiti’s best-in-class retail point-of-sale solution to give financial institutions a simple way to provide a seamless, embedded finance offering with a fully digital-first experience,” Kescenovitz said.
Jifiti offers a modular, white-label platform that supports a wide range of point-of-sale financing options. These options include installment loans, lines of credit, split payments, BNPL, and B2B financing. Founded in 2011, the company introduced its B2B Buy Now, Pay Later solution for banks, lenders, and merchants last month. The addition of the offering for business customers significantly enhanced the capabilities of Jifiti’s platform, enabling the technology to cover virtually all types of Buy Now, Pay Later options.
“The B2B market was the next logical step in our journey at Jifiti,” company CEO and co-founder Yaacov Martin said when the launch was announced. “We aim to give every customer the financing that best suits their needs. Now we can help our bank and merchant partners extend that same level of customization to their business customers through specialized B2B-embedded finance.”
Checkout.com and Shieldpay announced a partnership this week.
The collaboration will bring Checkout.com’s merchant clients more transaction processing options, including digital escrow.
This official partnership announcement comes a year after Checkout.com and Shieldpay first started collaborating.
Global payments platform Checkout.com and digital payments solutions provider Shieldpay have aligned this week. The two have joined forces to offer B2B merchants more transaction processing options.
In addition to straight-through processing, or processing transactions without manual intervention, merchants using Checkout.com will have access to Shieldpay’s payment engine and digital escrow capabilities. Shieldpay’s technology helps businesses add trust, transparency, and extra security when conducting transactions online. In an era when digital payments fraud is at an all-time high, it is essential for both the buyer and the seller to instill trust in the payments process, especially when dealing with high-value transactions.
“Together with Shieldpay, we’re bringing our merchants even more value and flexibility for their B2B transactions,” said Miyesa Hussain, Strategic Partnerships at Checkout.com. “Shieldpay’s digital escrow technology is truly innovative and further enhances the payout process for our customers. We’re excited to see where this partnership takes us.”
Shieldpay’s digital escrow tool was created to protect buyers and sellers across multiple deal types– including M&A, supply chain payments, capital raising, domain name transfers, real estate transactions, and more. The company offers KYC and KYB checks on all parties, full transparency, and flexible and efficient contracts. Leveraging this tool, Checkout.com customers can hold funds in safeguarded accounts until both the buyer and the seller are satisfied that the conditions of the transaction have been met. Once they approve the transaction, the money is then transferred to the verified merchant or the marketplace customer. Shieldpay can also help marketplaces disburse funds to submerchants.
This official partnership announcement comes a year after Checkout.com and Shieldpay first started collaborating. Shieldpay has already helped a handful of Checkout.com’s merchant clients manage complex payments. As an example, the two provide the payment flow for in-person digital payment acceptance company KodyPay*. In the arrangement, Checkout.com acts as the acquirer and provides a payment gateway facility to accept payments, while Shieldpay provides seller verification and disbursement.
“We are both on a similar mission as payments innovators and the services that our platforms offer to the market work in perfect harmony, said Shieldpay Head of Partnerships Daniel Dunne. “With these key drivers aligned, we are looking forward to the future of this partnership and growing together, and we are now envisioning new opportunities to further collaborate.”
*In other news, KodyPay announced a $5 million Pre-Series A financing round.
Real-time payments software company ACI Worldwide has appointed Thomas Warsop as its Interim Chief Executive Officer, effective immediately. Warsop was formerly the non-executive Chair of the ACI Worldwide Board of Directors. He replaces Odilon Almeida, who was the company’s CEO from March 2020 until now. Almeda was named CEO after Philip Heasley – who had served as CEO and President for 15 years – retired. Independent board director Adalio Sanchez will assume the role of non-executive Board chair.
“As ACI advances its vision to lead the real-time payments revolution, the Board is determined that now is the right time to transition to a new leader focused on accelerating our technology transformation and delivering operational excellence across our business,” ACI Nominating and Corporate Governance Committee Chair Mary Harman said.
A member of the company’s board of directors since the summer of 2015, Warsop became non-executive chairman seven years later in June of 2022. In addition to his tenure on the ACI board, Warsop brings his experience as Group President at Fiserv to his new position. Warsop has led a number of private equity firms previous to joining the ACI board including One Call Care Management, York Risk Services Group, and The Warranty Group. He also held executive roles at Electronic Data Systems, ranging from President of the firm’s Business Process Outsourcing unit in the Asia Pacific to Vice President of Global Financial Services.
“ACI is uniquely positioned to support banks, merchants, and billers around the world,” Warsop said in a statement. “We have market-leading software platforms in use at many of the world’s leading financial institutions and are poised not just to benefit from, but to drive, the rapidly approaching real-time payments revolution.”
ACI Worldwide’s C-suite news comes less than a week after the company announced third quarter results. The report included a 35% year over year increase in new ARR bookings, as well as “notable booking success across all segments, providing visibility into future revenue growth,” then-CEO and president Almeida said. At the same time, the company the impact of inflationary pressures on both interchange revenue and foreign exchanges rates. Adjusted EBITDA for Q3 was down year over year, but the company did iterate its full-year guidance.
Challenges notwithstanding, ACI Worldwide has continued to forge partnerships with institutions around the world, helping them enhance their payment operations. The company teamed up with Sweden’s Westpay in September, who will deploy ACI Secure eCommerce to bring new capabilities to its in-store payment solutions. Also that month, ACI Worldwide announced a partnership with loan management software provider GOLDPoint Systems. ACI will help the Provo, Utah-based company to digitize its billpay operations via its ACI Speedpay solution, which is used by thousands of billers in the U.S.
Founded in 1975 in Omaha, Nebraska, ACI Worldwide is currently headquartered in Miami, Florida. The company is a leading force driving innovation in real-time electronic payments for banks, processors, billers, networks, and more. ACI Worldwide serves 19 of the top 20 banks worldwide, enables more than 80,000 merchants, and provides electronic billpay technology for thousands of organizations. Processing more than 225 billion consumer transactions a year, the company serves more than 6,000 customers in 95 countries around the world.
A publicly traded fintech on the NASDAQ under the ticker “ACIW,” ACI Worldwide has a market capitalization of $2.4 billion. The company has been a Finovate alum since 2011, demoing its business banking solution in partnership with mShift at FinovateFall. ACI Worldwide returned to the Finovate stage five years later to lead a presentation on its latest innovations in ecommerce payment technology at our developers conference, FinDEVr Silicon Valley in 2016.
SEON is giving away its fraud prevention tools for free.
The free tier will include up to 2,000 API calls each month at a rate of two queries per second.
“We’re determined to tackle fraud head on,” said SEON CEO and Co-founder Tamas Kadar. “This version will help us to serve a greater number of online businesses than ever before, and it is a major step towards building a truly fraud free world.”
Online fraud prevention platform SEON‘s mission is to democratize the fight against online fraud for businesses of all sizes. Today, the Hungary-based company is furthering its efforts toward this goal by giving away fraud prevention tools for free.
The Forever Free version of its online fraud prevention software will support up to 2,000 API calls each month at a rate of two queries per second and includes email support from SEON’s customer service agents.
“We’re determined to tackle fraud head on,” said SEON CEO and Co-founder Tamas Kadar. “This version will help us to serve a greater number of online businesses than ever before, and it is a major step towards building a truly fraud free world.”
SEON has always offered businesses free access to its technology via a 14-day free trial. Starting today, after a user’s trial period expires, they will automatically be converted to SEON’s Forever Free plan. Businesses that want more capabilities can convert to SEON’s Pro plan, which offers more API calls and responses around 10 queries per second, for businesses with higher transaction volumes and a need for a faster speed.
“As a company, we make it tough for fraudsters by intelligently combining real-time social signals, phone, email, and IP lookup details with device intelligence and machine learning to uncover fraud patterns and discover revenue opportunities. We enable fraud prevention teams to go further with access to insightful, real-time data from one source.”
SEON doesn’t think of itself as a typical fraud prevention company. The company’s business model is based on a product-led growth (PLG) strategy via a software-as-a-service (SaaS) model, which makes the technology more accessible to a wider range of businesses.
“Sadly, for too long, this level of protection has only been available at a very high price point. That’s why for years, we’ve strived to make our service as accessible as possible. Through our ‘forever free’ option we’re able to go even further in that effort,” Kadar added.
The second half of the year has been a busy one for SEON. In the past couple of months, SEON has formed partnerships with SaaS anti-money laundering company, Lucinity and AI-powered decisioning platform, Provenir. And in the last few weeks, the company has made several updates to its system, including improving the accuracy of its IP, BIN, email, phone, and platform checks.
Sometimes “futuretech” means technology that helps ensure that we actually have a future!
This week we’re taking a look at recent initiatives in the fintech world to help promote sustainability. These efforts have been growing as more and more companies respond to customer concerns about the impact of their financial behavior on the climate. From technology that helps consumers measure and track their carbon footprint to new payment cards that eschew plastic for renewable, environmentally-friendly materials, businesses in the fintech industry have pursued a wide variety of strategies in support of “climate consciousness.”
The news that the Bank of Ireland has begun issuing new bio-sourced debit cards is one of the latest examples of this trend. The cards are made from 82% bio-source renewable materials such as field corn and decompose in months – compared to plastic, which lasts for hundreds of years. The cards will be available to both personal and business customers and the Bank of Ireland expects its entire portfolio to be switched over to the bio-sourced cards by 2026.
“The environmental credentials of these bio-sourced cards are exceptionally strong and with 60,000 already being used by third-level students, we will now radically expand the rollout across our entire cards business in Ireland and the U.K.,” Bank of Ireland Chief Sustainability & Investor Relations Officer Eamonn Hughes said.
The Bank of Ireland expects to save 17 tons of CO1 and nearly four and a half tons of plastic every year with the new initiative. The Bank first issued bio-sourced debit cards for third level students in September 2020. In addition to the new bio-sourced cards, the Bank of Ireland also announced that it was upgrading its card designs to make it easier for users to correctly insert the cards in machines and ATMs.
The decision to pursue bio-sourced cards is based in part on research the bank conducted on young shoppers over the past year. The Bank learned that 63% of those in Ireland between the ages of 18-25 have become “more aware of shopping sustainably” over the past 12 months. Additionally, more than half of those surveyed, 54%, said they were “happy to pay more for sustainable goods.”
In other fintech sustainability news, Zurich-based F10 is hosting what it calls the world’s first climate-focused fintech incubator in the Nordic region. The six-month program will feature startups from the U.K., Israel, Sweden, Lithuania, Switzerland, and Canada that are innovating in areas ranging from sustainable investing to waste trading. Head of F10 Nordics and Baltics Anders Norlin said, “the variety of climate fintech solutions presented reinforces the interest for more innovative solutions in the needed transition towards a net zero society.”
The startups participating are: Azzera (Canada), Eljun (Sweden), GreenGrowth (U.K.), OCO (Lithuania), Spritju (Sweden), SustainSME (Switzerland), Weather It Is (Israel), and Xworks (U.K.).
U.K.-based digital challenger bank Tandem launched its Tandem Marketplace this week. The new offering is a consumer-based hub for information on how to live a more sustainable life with tips on everything from retrofitting your home to keeping energy costs low. For example, among the tools available on the Marketplace are an EPC (“energy performance certificate”) checker to help U.K. homeowners understand their EPC and learn ways to improve it.
“We are in the middle of a climate crisis and a cost-of-living crisis,” Tandem Chief Impact and Marketing Officer Georgina Whalley said. “People shouldn’t have to choose between heating and eating. This is why we have created our Marketplace, people need more information and support to make greener choices.”
Tandem Marketplace is only the most recent sustainability initiative the bank has pursued. In September, Tandem Bank announced that it had joined the Coalition for the Energy Efficiency of Buildings (CEEB) sponsored by the Green Finance Institute. The coalition consists of more than 300 businesses and organizations from finance, policy, and civil society, working to develop a market for financing net zero carbon and climate resilient buildings in the U.K.
“This is a brilliant opportunity for Tandem to join leaders across a range of sectors to develop green and innovative financial products that will address the retrofit investment gap,” Tandem Bank CEO Susie Aliker said. “With over 28 million homes in need of retrofitting by 2050, collaboration is key to successfully tackling Net Zero targets.
Founded in 2014, Tandem is one of the U.K.’s original digital challenger banks.
Digital banking solutions provider Moneythor launched a new engagement tool for wealth managers.
The new offering is designed to help wealth managers leverage client data to create more personalized experiences that help customers build their wealth.
Moneythor was a finalist in this year’s Finovate Awards in the “Best Fintech Partnership” category.
Moneythor, a Finovate Awards finalist this year in the “Best Fintech Partnership” category (in collaboration with Standard Chartered), unveiled a new tool for wealth managers this week. The offering is an add-on module to its data-driven personalization and digital engagement solution, and is designed to help wealth managers increase loyalty and NPS, as well as lower the costs and boosting revenues.
Moneythor’s digital engagement tool aggregates a sizable range of user data – from retail accounts and payment cards to lending products and investment portfolios, and more. This data is then processed by the Moneythor platform to generate and provide insights, recommendations, and alerts – at scale and in real-time. This gives customers the kind of contextual and actionable information they need in order to better manage and grow their finances. Customers can also take advantage of the configurable conduit to update their risk profile, compare their portfolio’s performance against model portfolios, as well as consider and incorporate investment advice.
“Adding the ability to deliver personalized experiences across investment journeys was a natural evolution of our solution aiming to address the needs of financial services customers across all segments including retail, SME and now wealth,” co-founder and CEO of Moneythor Olivier Berthier said. “We are excited by the interest we have seen from our clients and partners for these new features, and how important personalization and digital engagement are now to their wealth management strategies.”
Founded in 2013 and headquartered in Singapore, Moneythor has spent the fall of 2022 inking partnerships with the likes of Trust Bank, a digital financial institution headquartered in Singapore, and Australia’s National Australia Bank (NAB). In May, Moneythor teamed up with Finovate alum Thought Machine, which selected Moneythor among the initial partners for its Integration Library, a suite of curated integrations that are interoperable with Thought Machine’s Vault Core. Moneythor began this year announcing collaborations with The Saudi Investment Bank (SAIB) and carbon footprint tracking company Cogo.
In addition to its Singapore headquarters, Moneythor maintains offices in Paris, Sydney, Dubai, and Tokyo. The company’s solutions are used by financial institutions around the world, including in developing markets such as Indonesia, India, and Malaysia.
Open banking company MX and real-time payments player Orum have formed a partnership.
The agreement integrates Orum’s money movement API with MX’s instant account verification and balance check capabilities.
Combining these technologies will enable fintechs to embed real-time payment capabilities into their own offerings.
Open banking company MXannounced a partnership with real-time payments player Orum this week that will enable it to provide real-time payments and money movement capabilities for fintechs.
The agreement integrates Momentum, Orum’s money movement API, with MX’s instant account verification (IAV) and balance check capabilities. This combination will enable fintechs to embed instant payments capabilities for transactions in any direction, at any time.
“More than ever, fintechs and verticalized payments companies are looking for innovative solutions that automate and simplify money movement, from unlocking instant and risk-mitigated on and off ramps, to optimizing the customer experience through instant availability of funds and payouts,” said Orum Chief Revenue Officer Rouzbeh Rotabi. “By partnering with MX, Orum is further enhancing the ability to offer the best experience for developers who value simplicity and security, and end-customers who want instant funds availability.”
Orum offers a unified money movement API that uses in-house payments intelligence to manage risk and orchestrate complex, multi-rail transfers. The company offers settlement in as little as 60 seconds. This is the first partnership announcement I’ve seen from Orum, which offers use cases for crypto exchanges, brokerage firms, gig platforms, insurance companies, consumer lenders, and banks. Founded by Stephany Kirkpatrick, the company entered the market with its flagship product, Foresight, in 2020. To date, Orum has raised $82.2 million in funding from the likes of Inspired Capital, Bain Capital, Accel, Canapi Ventures, and others.
Founded in 2010, MX has positioned itself in the open finance space, offering account aggregation and data access products alongside its mobile banking and money management tools. When used in conjunction with Orum’s instant payment technology, MX’s IAV and balance check capabilities will help fintechs verify and aggregate consumers’ financial information quickly and securely.
“Orum offers fintech and financial institutions access to smarter, simpler, and faster payments,” said MX Executive Vice President, Channel Partnerships Raymond den Hond. “MX and Orum’s shared commitment to enabling best-in-class financial experiences and outcomes through cutting-edge platforms makes this a natural partnership. We are excited to grow and expand our capabilities together to meet the most pressing needs of fintechs and payments companies.”
Legal & General and Lloyds Banking Group have invested $40 million (£35 million) in open data and payments platform Moneyhub.
Along with the equity capital, Moneyhub received an additional $5.7 million (£5 million) debt facility courtesy of Shawbrook.
Moneyhub made its Finovate debut at FinovateEurope in 2015 in London. Samantha Seaton is CEO.
The $40 million (£35 million) in funding raised by open finance and payments platform Moneyhub will give minority stakes to investors Legal & General and Lloyds Banking Group. The two backers will leverage their relationship with Moneyhub to enhance their own offerings with Moneyhub’s open data technology. At the same time, the capital, along with an additional $5.7 million (£5 million) debt facility courtesy of Shawbrook, will enable Moneyhub to speed development of its products in areas ranging from pensions and payments to affordability and Data-as-a-Service. The funding will also support Moneyhub’s plans to further international expansion.
“(The) new investment helps us signal a step change in the way the financial services industry thinks about Open Data and the possibilities it presents,” Moneyhub CEO Samantha Seaton said. “Understanding and utilizing customer transaction data for the benefit of the customer’s financial wellbeing not only helps businesses fulfill their Consumer Duty regulatory obligations, but also empowers them to create further opportunities.”
Moneyhub enables companies to transform data into personalized digital experiences and initiate payments. Offering both APIs and its customizable Open Data Platform, Moneyhub serves businesses in industries from pension companies and wealth managers to banks, lenders, and insurance companies. Moneyhub boasts seamless, single source connectivity to thousands of financial institutions in 37 countries, helping ensure its clients can build a comprehensive portrait of their customers’ financial needs, habits, and goals.
Moneyhub’s largest funding round to date, this week’s capital infusion is part of a larger fundraising effort and follows a 2021 investment of $18 million led by Peter Wood, founder of Direct Line and Esure. At the time, the funding was the largest secured by a female fintech CEO in Europe that year. Moneyhub currently has more than $63 million in capital raised, according to Crunchbase.
Moneyhub made its Finovate debut in 2015 at FinovateEurope in London. Founded in 2011 and headquartered in Bristol, the company also announced this week that it was teaming up with SME health and wellness care provider MorganAsh. The support services provider will use Moneyhub’s technology to access customer financial data to enhance their ability to provide real-time consumer vulnerability assessments. The partnership will also help MorganAsh fulfill its obligations for Consumer Duty, a requirement issued by the U.K. Financial Conduct Authority in July that governs implementation of open finance/open data products.
“Consumer Duty and Open Finance herald a new era of customer-focused firms and financial resilience,” Moneyhub Business Development Director Vaughan Jenkins said. “Smart, forward-looking businesses will seize this moment and benefit from it.”
U.S. Bank launched a new suite of embedded payments solutions within Microsoft Dynamics 365.
The collaboration embeds U.S. Bank payment capabilities across Microsoft platforms.
U.S. Bank said it plans to embed additional payment capabilities within platforms such as Microsoft Teams and Microsoft Power Platform.
U.S. Bank’s collaboration with Microsoft announced earlier this year has borne fruit: the bank has introduced a new suite of embedded payments solutions within Microsoft Dynamics 365. The integration embeds U.S. Bank payment capabilities across Microsoft platforms. It also makes U.S. Bank among the first financial institutions to take advantage of the opportunity of directly integrating into the popular enterprise resource planning (ERP) and finance solution.
Among the solutions available to businesses using Microsoft Dynamics 365 is the U.S. Bank AP Optimizer. Available directly from their business application, the technology gives treasury management teams the ability to automate invoice processing for both business and consumer payment disbursement within Microsoft Dynamics 365. This will facilitate automated accounts payable workflows, including matching and reconciliation.
“We are committed to meeting clients wherever they are in their digital journey, bringing payments to businesses in a way that’s instant, embedded and connected to the technology they use every day,” U.S. Bank vice chair and head of Payment Services Shailesh Kotwal said. “Our integration with Microsoft – which businesses rely on daily to serve their customers – opens new possibilities for U.S. Bank clients to improve efficiencies and enable faster payments.”
According to U.S. Bank, this week’s news is only the beginning. The bank announced that it has plans to embed additional payment tools within Microsoft platforms such as Microsoft Teams and Microsoft Power Platform.
“Embedded payments can deliver powerful, new ways for businesses to streamline processes, enhance visibility, deliver better experiences, and reduce risk,” Microsoft Corporate Vice President for Worldwide Financial Services Bill Borden said. “We are excited to build on our work with U.S. Bank, delivering integrated, easy-to-use digital payments capabilities to our customers through Microsoft Dynamics 365 with additional embedded solutions to come.”
The two companies have been working together closely since February, when U.S. Bank announced a “substantial investment” in the modernization of its technology by choosing Microsoft Azure at its primary cloud provider for applications. The move will give customers more tools and more options when it comes to accessing banking services and provides U.S. Bank with opportunities to grow via new partnerships and what the bank sees as an “ever-evolving financial services marketplace.”
U.S. Bank’s collaboration news comes just one month after the bank introduced a new cash flow prediction tool for small businesses. The solution gives SME owners a 90-day forecast of cash flow and enables them to factor in external client data along with data from their own U.S. Bank accounts to provide more comprehensive cash flow insights.
U.S. Bank most recently demoed its technology last September at FinovateFall 2021. At the conference, the Minneapolis, Minnesota-based bank demoed its Card-as-a-Service (CaaS) solution. The offering enables fintechs, partners, and clients to digitally extend corporate credit, and to leverage API integration to create a custom virtual payment experience in their own ecosystem. Spending limits, tokenization, and encryption are all features of U.S. Bank’s CaaS solution.
Amazon is launching a merchant cash advance tool in partnership with Parafin.
The cash advance ties repayment to a percentage of the Amazon seller’s Gross Merchandise Sales (GMS).
The program launches today for select U.S. businesses, and it will be available more broadly by early 2023.
Right on the heels of launching its own insurance marketplace, Amazon is taking another step into the fintech realm. This time the online retailer is taking aim at small business financing, unveiling a financing tool for sellers on its own platform via a partnership with Parafin, a fintech that offers a merchant capital-as-a-service for online marketplaces.
Leveraging Parafin’s technology, Amazon is launching a merchant cash advance tool that offers eligible Amazon sellers a cash advance that ties repayment to a percentage of sellers’ Gross Merchandise Sales (GMS). The service offers approved merchants capital ranging from $500 to $10 million in a matter of days, and does not limit borrowers to a fixed term, require credit checks, or charge late fees.
Because the merchant cash advance tool is based off a seller’s GMS, the financing does not work like a traditional loan. Repayment is only required when a seller makes a sale. There is no minimum payment, no interest, and no collateral required. Instead, Amazon charges merchants a fixed capital fee.
“Amazon is committed to providing convenient and flexible access to capital for our sellers, regardless of their size,” Amazon WW B2B Payments and Lending Director and General Manager Tai Koottatep. “Today’s launch is another milestone in strengthening Amazon’s commitment to sellers, and builds on the strong portfolio of financial solutions we already provide. This latest offering significantly expands sellers’ reach and capabilities, and broadens their access to capital in a flexible way—one that helps them control their cashflow, and by extension, their entire business.”
Amazon is launching the financing program to select U.S. businesses today, and it will be available to “hundreds of thousands” of eligible sellers by early 2023. To qualify, sellers must have at least three months of sales history on Amazon.
Founded in 2020 and headquartered in California, Parafin’s mission is to democratize access to growth capital. The company has raised a total of $244 million, including its most recent round of $60 million raised in August. Earlier this year, Crunchbase added Parafin to its Emerging Unicorn Board, its list of companies valued above $500 million but less than $1 billion.
JP Morgan Chase is working on a rent management tool for owners of multi-family housing buildings.
The new tool, called Story, will enable landlords to send invoices, receive payments, track payments, view analytics, determine rent prices, and screen potential tenants.
Story is currently in beta, but is expected to be released to a broad audience in 2023.
JP Morgan Chase is piloting a platform to facilitate rent payments for tenants living in multifamily housing. The new technology, called Story, is a rent management tool for multi-family property owners.
As its core functionality, Story will enable landlords to automate rent invoices and receive rent payments. As not all tenants pay rent on time or in full, Story serves as a platform to help landlords track which tenants have paid and which still owe. Additionally, the new offering will provide property owners with analytics, help them determine rent prices, and will even offer a tool to screen potential new tenants.
As for renters, Story will remind them of upcoming rent payments, offer them multiple payment options, enable autopay, track their previous rent payments, and show a copy of their lease.
The bank has not yet set a price for the tool, but indicated that it will not charge a transaction fee for ACH, debit, or credit card payments for the first year. After that, Chase clients that hold an unspecified minimum balance will receive free ACH payments.
Story, which is currently available in 15 U.S. states, will be released to a broader set of users next year.
I’m always surprised at the lack of property tech (proptech) solutions in the fintech space. During the last decade, tenants’ rent payments totaled $4.5 trillion, and this number is set to increase massively between 2020 and 2030. Aside from insurtech, proptech is one of the last frontiers of fintech to be digitized. Now that we’re seeing a large incumbent like JP Morgan get into the game, it is only a matter of time before we see competing proptech innovations from other traditional banks.
