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Tracking fintech, banking & financial services innovations since 1994
Today brings yet another indication that QR codes are back in style. Fiservannounced it is partnering with PayPal to enable businesses to use QR codes to offer touch-free payments at the point of sale.
Through the partnership, small and mid-sized businesses using Fiserv’s Clover point of sale and large enterprises leveraging the company’s Carat commerce ecosystem will be able to accept payment via PayPal and Venmo through QR codes at the point of sale.
“With consumer preference shifting towards touch-free interactions, it’s critical that businesses are able to connect physical and digital commerce,” said Fiserv’s Head of Global Business Solutions Devin McGranahan. “By enabling consumers to pay digitally via a QR code and popular digital wallets like PayPal and Venmo, businesses are providing added convenience and choice as in-person shopping, dining and entertainment experiences resume.”
As shown in the video above, the QR codes make the touch-free payment process relatively frictionless. Nonetheless, there is one catch– users must have a PayPal or Venmo account and mobile app.
Consumers may be willing to endure the extra friction, however, as people have become more likely to try out new digital technologies in the wake of the pandemic.
Fiserv’s announcement comes about a month after the company agreed to acquire payment processing and payment acceptance startup Pineapple Payments.
Founded in 1984 and headquartered in Wisconsin, Fiserv’s technologies serve nearly six million merchants across the globe. Frank Bisignano is president and CEO.
Financial services technology provider Fiserv made its latest acquisition this week. The Wisconsin-based company has agreed to purchase payment processing and payment acceptance startup Pineapple Payments.
Financial terms of the deal, which is expected to close next quarter, were not disclosed.
Under the agreement, Fiserv will continue to provide processing services to Pineapple’s 25,000 merchants. Fiserv anticipates the purchase will expand the reach of its own payment solutions, including the CoPilot partner platform, Clover, and Clover Connect.
“With Pineapple Payments already operating as a key distribution partner of Fiserv, we expect to accelerate the delivery of new and innovative capabilities to a host of new merchant clients,” said Fiserv President and CEO Frank Bisignano. “Together, we will provide omni-channel payments technology and services to enable merchants to maximize the potential of electronic payment processing. We look forward to welcoming Pineapple Payments to the Fiserv family and continuing to provide the best-in-class solutions and service that merchants and their customers expect.”
Headquartered in Wisconsin and founded in 2016, Pineapple Payments provides payment processing and omni-channel payment acceptance solutions for integrated software vendors and SMBs.
Today’s deal is Fiserv’s 35th acquisition. Prior to today, the company most recently bought up digital card services platform Ondot in a deal announced last December.
“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.
Fiserv made a key acquisition this week, snapping up digital card services platform Ondot Systems. Financial terms of the deal were not disclosed but the agreement is set to be finalized in the first quarter of next year.
Fiserv is picking up Ondot to enhance its suite of tools that help banks offer digital-first, personalized offerings to their consumers.
“By combining Ondot and Fiserv capabilities at scale, we plan to provide our clients with a unified digital experience, spanning card-based payments, digital banking platforms, core banking, and merchant solutions, enabling them to deliver best-in-class solutions that continue to reduce friction for their customers,” said Fiserv President and CEO Frank Bisignano.
More specifically, Fiserv will use Ondot to help bank clients accelerate digital customer acquisition, drive digital commerce, increase card activation and usage, reduce service costs, and engage contextually.
The deal enhances Fiserv’s standing in the card payment space specifically. The Wisconsin-based company will now be able to help banks offer cardholders instant card issuance and usage, visibility into purchases through enriched transaction information, and actionable insights to help them make more informed spending decisions.
Fiserv’s bank clients will benefit from Ondot’s data enrichment that organizes and identifies transaction and merchant data to minimize chargebacks.
For Ondot, joining forces with Fiserv will offer the company a more global reach and will help it scale up faster. As Ondot President and CEO Vaduvur Bharghavan explained, “Joining with Fiserv will provide Ondot the opportunity to innovate and impact the industry on a global scale. We look forward to expanding the scope of our offerings as we integrate with Fiserv’s vast array of capabilities to continue providing high-quality digital solutions to consumers, merchants, acquirers, networks and card issuers.”
California-based Ondot was founded in 2011 and has raised $51 million. The company processes more than 1 billion transactions per month and provides digital capabilities for over 30 million cards. The company made news earlier this year when it partnered with CU Solutions Group, which agreed to become a reseller of Ondot’s CardApp.
One of the more fascinating stories in the history of black America is the rise of black-run banking institutions in the final decades of the 19th century. And while the early days of black banking and finance had their fair share of tragedy – the massacre at “Black Wall Street” in Tulsa, Oklahoma in 1921 among the more horrific – the industry persisted nevertheless, enabling black SMEs and families to access basic banking services and credit at a time when mainstream financial institutions refused to serve them.
AACUC President and Executive Officer Renée Sattiewhite acknowledged that Fiserv’s participation comes at a time of heightened awareness of and renewed determination to fight forms of systemic racism in particular. “As a year that has galvanized support for African-American community comes to a close,” Sattiewhite said, “we are looking forward to the future along with organizations like Fiserv.”
Fiserv General Manager of Credit Union Solutions and executive sponsor of the partnership Derek Everett put the collaboration in the context of Fiserv’s goal of better engaging underbanked communities. In addition to its partnership with AACUC, Fiserv is also investing $10 million in black- and minority-owned businesses via its Back2Business initiative. “As we begin our work with AACUC, our team is looking forward to strengthening existing relationships and forging new ones with the diverse communities and professionals AACUC strives to empower,” Everett said.
Headquartered in Duluth, Georgia, the Coalition promotes racial equality and fairness in the credit union industry, and supports black-led credit unions and credit unions serving black communities. Larry Sewell, who recently took over as chairman of the AACUC, discussed the challenge of diversity in an interview this fall. Currently Vice President of Corporate Partnerships and Advocacy for Together Credit Union, Sewell noted that of the more than 5,000 credit unions in the U.S., there are “approximately 170 African-American CEOs.” The number of women among those 170 CEOs, it should be noted, is impressive at more than 58%. But the industry clearly has room to improve in terms of ethnic diversity at its most senior, leadership ranks.
A look at the companies demoing at FinovateSpring Digital on May 10 through 13, 2021. Register today and save your spot.
Virtual Banking Assistant from Fiserv enables you to deliver intelligent, AI-driven conversational experiences to grow, retain, and engage your consumers while reducing your call center costs.
Out-of-the-box AI — leverages conversational AI
Contextual, natural language understanding — supports complex conversational flows
Dynamic financial information — provides actionable, proactive insights
Why it’s great Virtual Banking Assistant understands messy, unknown language and promotes financial health while gaining actionable insights. This platform provides real-time banking assistance across all channels.
Deniz Kaya, Director of Product Management Kaya is Director of Product Management and is responsible for setting the vision and strategy for the Fiserv integrated AI and data products. LinkedIn
“Consumers want to share their financial data with third parties in a model that’s both secure and convenient,” VP of Digital Payments and Data Aggregation at Fiserv Paul Diegelman said. “This process can be difficult for financial institutions to support if screen scraping impairs online banking performance, or when login credentials are stored at unaffiliated third parties. AllData Connect gives financial institutions the ability and insight they need to confidently empower consumers to share their financial account information.”
AllData Connect works by sending consumers to a Fiserv-hosted portal to verify their identity and provide consent for data-sharing. Once the consumer is validated by Fiserv and information access granted, AllData Connect delivers the permissioned data to third party apps for the specific activity. The solution provides confirmation and capture of consumer’s consent to share their data, managed access to online banking, secure storage of account holder usernames and passwords, and insights into where consumer information is being used. AllData Connect can also help FIs reduce the volume of unidentified bulk traffic that can inhibit website performance.
The new offering is the latest data aggregation solution within Fiserv’s AllData product suite. The suite also includes solutions for data integration by API, planning and financial management, and wealth management: AllData Aggregation, AllData PFM, and AllData Advisor, respectively.
This week for Finovate Global, we caught up with Mohammed Aziz, co-founder and CEO of Dapi, a fintech startup that offers a suite of open banking APIs to help connect customer bank accounts, initiate payments, and access data in real-time. Founded in 2019, the company currently operate in six countries in the Middle East and Africa, and is headquartered in both San Francisco, California, and the UAE.
We talked about the opportunity for open banking to fuel innovation in financial services in emerging economies, as well as the overall environment for fintech innovation in the MENA region. We also discussed the impact of the COVID-19 crisis on pre-existing trends such as digitization.
Finovate: Dapi is the third company you’ve founded, but your first fintech. What made you want to focus on the opportunities in this industry? What do you bring to fintech from your experience in other areas?
Mohammed Aziz: Dapi was the result of a problem that I personally faced when trying to build “Spendy” a hybrid between a peer to peer payment application and a personal financial management app. We were unable to build out Spendy for most emerging markets due to the lack of bank connectivity which got us super keen to build out the underlying infrastructure that would power the future of fintech in these markets.
Finovate: Tell us about Dapi. What problem does your company solve and who are your primary customers?
Aziz: Dapi’s mission is to provide the building blocks for a thriving fintech ecosystem in emerging markets around the world. Our API serves as the bridge between financial applications and banks, empowering developers to create digital wallets, budget trackers, investment applications and more. Our clients are developers working on fintech applications, businesses hoping to include financial services in their mobile and web offerings, and anyone that wants to include bank functionality within their digital offerings.
Finovate: Your business strategy relies on an embrace of open banking in the MENA region. How strong is the movement toward open banking there?
Aziz: The MENA region is a very exciting space to be operating in right now. Fintech is only beginning to develop here and the market is pretty much untapped, so we are hoping to serve as an influence towards the region embracing open banking and all the opportunities that come with that. I would also like to point out that we are able to activate and build connectivity regardless of open banking being present or not. We like to take the approach that companies like Plaid in the US or Truelayer in the UK did, whereby they were connected to banks despite frameworks and regulation being in place.
Finovate: Aside from open banking, what are some of the other exciting trends in the fintech industry in the Middle East/Abu Dhabi right now?
Aziz: There’s a general trend of growing interest for the kinds of applications that financial technology empowers, from digital wallets and peer to peer applications to investment platforms and digital banks. The market is new and rapidly evolving.
Finovate: We talk about the Middle East and North Africa as a region. But there is a great deal of variation among countries in MENA. How does this impact your ability to market your technology in the area?
Aziz: Beyond market considerations, the regulation surrounding the use of APIs in financial applications varies greatly from country to country. This is a new and mostly unregulated space, but we have had to consider completely separate approaches to integrating our services in the UAE as opposed to KSA, for example. Culture is also another important factor, as it varies between countries and impacts the products that you would want to launch along with the go-to-market approach.
Finovate: How has COVID-19 impacted the fintech industry in the region? Early in the crisis, we heard news from countries like Iran, but not as much since. How are businesses, especially fintech businesses, faring?
Aziz: The COVID-19 pandemic and its push towards social distancing and remote work has actually increased interest in digitization of financial services. For example, there have been a number of announcements within the UAE that the country will be moving towards enabling more online payments and other financial services without the need to physically go to a bank.
Finovate: You participated in the Y Combinator program. What was that experience like? What advice do you have for startups with the opportunity to pursue a similar path with a top-notch accelerator?
Aziz: Y Combinator has been a phenomenal experience for us. It really put us out there on the map and helped expand our network in silicon valley. From our experience, investors and VCs in the US are not usually convinced about investing in early stage MENA startups, but YC really helps establish that credibility.
Finovate: Tell us about your experience of setting up your business in Abu Dhabi.
Aziz: Abu Dhabi is an exciting place to work, since it is a rapidly growing and developing market, as mentioned above. Furthermore, we have received a lot of support from our involvement in ADGM and Hub71, which provided resources for us to establish and grow our operations in these beginning stages.
Finovate: What can we expect from Dapi over the balance of 2020 and beyond?
Aziz: We are very excited to continue growing and expanding into a variety of developing markets, beyond the UAE. At the same time, we have a number of exciting partnerships in our sights for the UAE, which we hope will bring our vision of a strong fintech ecosystem in the MENA region closer to reality.
Here is our look at fintech around the world.
Singapore-based MatchMove launches cross-border remittance platform for businesses.
Clik, a payment aggregator and merchant acquirer based in Cambodia, raises $3.7 million in seed funding.
Leading Asian financial services platform GoBear teams up with UnionBank to launch lending-as-a-service solution in the Philippines; announces new Chief Financial Officer.
Fiservinks partnership with Absa Regional Operations (ARO) to enhance credit card management and processing in nine African countries.
Ecobank Group unveils the finalists for its fintech challenge, now in its third year. Ten African startups from seven different countries made the cut out of an applicant pool of more than 600.
Salaam Gateway looks at the development of Islamic fintech in Kenya.
Central and Eastern Europe
Onfido to streamline digital identity verification for Poland’s Alior Bank.
Russia’s Tinkoff Banklaunches new charitable program, Cashback to Give Back.
Austrian regtech kompany lands $7.14 million in funding.
Middle East and Northern Africa
Salt Edgepartners with Jordan Ahli Bank Cyprus, making it one of the first banking groups in Cyprus to achieve PSD2 compliance.
Israeli fintech Approve.com raises $5 million in seed funding for its technology that automates the procurement process.
Infosys Finacle to deploy its Liquidity Management platform with National Bank of Bahrain.
Central and Southern Asia
Uzbekistan’s People’s Bank partners with Finastra to automate its risk management business.
TerraPay collaborates with Bank Alfalah to enable instant money transfers to Pakistan.
Indian B2B fintech Signzy announces plans to hire “close to 70” employees over the next six moths in response to increased demand.
Latin America and the Caribbean
Feedzaiexpands partnership with PayU, enabling the company to enhance its fraud prevention capabilities in Latin America and the EMEA region.
TechCrunch profiles Mozper, a digital banking service based in Latin America that caters to parents and Gen Z kids.
MercadoLibre announces plans to launch branded credit cards in Brazil and Chile “in the near future.”
To steal a line from Rob Base and DJ EZ Rock, when it comes to innovation in fintech, it takes two to make a thing go right. Whether the “thing” is an end-to-end digital transformation or creating the technology infrastructure to enable firms to build and market their own innovations, collaboration and partnership with fintechs increasingly seems to be the path that the most forward-looking banks and other financial institutions are pursuing.
With this in mind, here’s a look at some of the more interesting recent partnership announcements over the past month – with an eye toward what these collaborations might be saying about the near-term future of fintech.
DBS Bank: Headquartered in Singapore. Total assets of $420 billion (SGD 579 billion) in 2019. Largest bank in Southeast Asia. Operates in 18 markets around the world.
Objective: The new build will allow the bank to develop “transformative intelligent applications” and to bring those solutions to market faster.
Orange: Telecommunications corporation headquartered in Paris, France. Fourth largest telecom in Europe and one of the ten largest in the world with 26 million customers. Total assets of $124 billion (€106 billion) and revenues of $49 billion (€42 billion) as of 2019.
Objective: Partnership will bring savings and micro credit services to underserved customers in Cote d’Ivoire, Burkina Faso, Mali, and Senegal.
Lloyds Banking Group Headquartered in London, U.K., Lloyds is the country’s largest digital bank with 16.9 million active customers online and 11.5 million on mobile. Founded in 1765, the bank currently has total assets of more than $1 billion (£833 billion).
Project: Along with partners Google Cloud and Microsoft, Form3 will help the U.K.-based bank “investigate and develop” a cloud-payments-as-a-service platform.
Objective: The collaboration, which also includes a minority equity stake in Form3, will simplify Lloyd’s payment capabilities and support enhanced data and new overlay services.
Banca Ifis: Specialty commercial and corporate banking firm for SMEs headquartered in Venice, Italy. The firm has more than 130,000 retail clients in the country, and online funding and deposits totaling more than $4.7 billion (€4 billion).
Objective: Raisin’s customers in Germany will gain access to deposit solutions available from Banca Ifis. The collaboration will enable German customers to take advantage of relatively higher interest rates available in Italy.
Other fintech/financial institution partnerships of note this month:
If digital transformation is sweeping financial services – and this trend has been accelerated by the global public health crisis, as we are often told – then what’s up with the huge and enduring demand for cash?
“I certainly would have expected, if you’d asked me prior to COVID: would COVID put a big dent in cash? I would have said “absolutely” because not only are people not going out, it has a dirty connotation to it,” Fiserv Senior Vice President David Keenan said during the Q&A portion of his recent webinar presentation, Looking Under the Hood of Today’s Payments Ecosystem.
“And yet if you look at the data,” he added, “that’s not what’s happening.”
This was one of many fascinating takeaways from Keenan’s research on payment trends in the COVID-19 era. That research was presented this week in a webinar that also looked at the rise of digital enablement in financial services and the inevitable transition to real-time payments. Keenan’s presentation is now available for viewing on an on-demand basis.
Toward the end of his discussion, which explained how and why companies need to be able to provide “the right options at the right time to create a winning payment experience,” we asked the Fiserv SVP why he began his presentation, which featured insights on digital enablement and real-time payments, with a discussion on the importance and endurance of cash.
Keenan said the decision to start with cash was deliberate – and given the program’s theme of “safe, fast, convenient payments” it is perhaps easy to understand why. For all of cash’s drawbacks – including the fact that paper money increasingly is seen as “dirty” in an ever-more touchless world – Keenan showed research from the Federal Reserve indicating that cash remains a preferred payment method in the U.S. – only trailing debit. Moreover, for about 85% of those surveyed, cash usage over the past 12 months had remained the same, or increased.
But perhaps most interestingly, this data also revealed that cash’s most passionate champions are under the age of 25. And this preference for paper money does not take away from GenZ’s appreciation of debit, which is on par with 25-to-34 year old, 35-to-44 year old, and 45-to-54 year old cohorts. Nor was credit usage impacted by GenZ’s preference for cash; GenZ credit usage was comparable with both 25-to-34 year old and 35-to-44 year old age groups. The main difference between GenZ and other cohorts was in the use of electronic payments, where its usage was typically half that of other groups surveyed.
A further note on the enduring preference for cash: while cash usage patterns have returned to trend after a brief, coronavirus-induced drop in March, the amounts of cash being used – which began increasing in March – have remained elevated.
Keenan speculated that what might blunt these accelerating cash trends could be a major response to the coronavirus – such as a vaccine. He said, “as long as we’re living in this one-step-at-a-time, back-to-the-new-normal, we believe cash is going to be an important part (of payments).”
Financial services firm Fiserv made its 32nd acquisition today. The Wisconsin-based company purchased Bypass Mobile, a company that specializes in software and POS systems. Terms of the deal were not disclosed.
The acquisition is expected to help Fiserv support its clients in creating a seamless customer experience across physical and digital channels. By integrating with Fiserv’s universal commerce platform, Bypass will offer businesses a single point of contact. As a result, businesses will benefit from increased operational efficiency, enhanced security, and a more complete picture of customer interaction.
“Adding Bypass to our portfolio will make it easier for our clients to realize their digital transformation strategy, delivering interactions their customers are demanding,” said Fiserv Senior Group President of Global Business Solutions Devin McGranahan. “With this combination, we will improve the omni-commerce experience for businesses and their customers, making it easier and more efficient to pay for goods and services.”
Specifically, Bypass will enable secure Fiserv clients to accept payments in a secure environment across multiple devices. “In combination with Fiserv, we will help businesses accept payments efficiently while continuing to meet customer expectations by providing a variety of payment options,” explained Bypass CEO Brandon Lloyd.
Fiserv was founded in 1984. While the company’s most recent purchase was Merchant Pro Express earlier this month, its most notorious one in recent memory was the acquisition of First Data in January of last year. That deal closed for $22 billion.
Two of the biggest themes in fintech – digital identity and the rise of fintech in Central and Eastern Europe – meet in the latest announcement from biometric authentication specialist and Finovate Best of Show winner iProov. The company’s facial recognition technology now makes it easier for users of SK ID Solutions’ Smart-ID Service in countries like Estonia, Latvia, and Lithuania to renew their accounts without having to visit a physical bank branch.
“This is a major development for all digital identity providers,” iProov CEO Andrew Bud said. “Estonia has proved, for the first time, that a remote, automated, biometric ID verification service can deliver the highest possible levels of security.”
Recognized as equal to a handwritten signature throughout Europe, Smart-IDs enable users to authenticate themselves and provide permissions online using a smartphone app. iProov’s facial recognition technology adds a three-second scan to compare the image of the user to the image on their presented ID document to help defend against fraud and identity theft.
Smart-ID also leverages NFC-based ReadID document verification technology from InnoValor.
Financial crime risk management innovator Featurespace will be helping Enfuce combat fraud and money laundering courtesy of a newly announced partnership. Enfuce, a financial services firm based in Finland, will use Featurespace’s ARIC Risk Hub to enhance its ability to protect its customers from fraud and financial crime.
“Our clients deserve industry-leading services that allow them to freely and fully concentrate on the success of their core business, without worrying about ever-evolving fraud,” Enfuce co-founder and chair Monika Liikamaa said.
ARIC Risk Hub offers real-time transaction monitoring for fraud and financial crime, enabling institutions to identify and act against anomalous and potentially dangerous behavior as it occurs. The technology also reduces the number of false positives by as much as 70%, keeping anti-fraud processes efficient. Featurespace introduced its fraud-fighting technology to Finovate audiences at FinovateEurope 2016.
Here is a round up of recent news from our Finovate alumni.
Sezzleunveils new logo along with its first annual report.
Flybitsexpands its executive team in New York, Toronto, the U.K., and Dubai.
Yseop and Automation Anywhere join forces to scale intelligent automation.
Lighter Capitalappoints Kevin Fink at CTO and Patricia Elliott as CSO.
InCommlaunches Roblox gift cards in France and Germany.
Finovate Alum Features and Profiles
Revolut’s $500 Million Round Boosts Valuation to $5.5 Billion – Global financial platform Revolut has secured its place as the U.K.’s most valuable fintech.
Dealing with Deepfakes in Fintech – The fintech industry is ripe with security firms, such as iProov, that use AI to combat both video and audio deepfakes with anti-spoofing technologies.
Envestnet | Yodlee Acquires Indian Data Aggregator FinBit.io – Envestnet | Yodlee has acquired another asset in its strategy to further grow and develop its data aggregation and analytics business.
Meet Sonect: Cash Network Builder, Finovate Newcomer, Best of Show Winner – What’s better than having a large pizza with all your favorite toppings delivered to your front door? How about a side order of cash, saving you a trip to the ATM or bank branch?
Azimo Taps Ripple for Cross-Border Payments to the Philippines – Fueling these payment transfers is Ripple’s On-Demand Liquidity (ODL) solution that uses XRP to source liquidity and complete money transfers within three seconds.
Lendio Lands $55 Million to Match Small Businesses with Lenders – The investment more than doubles the company’s previous funding, bringing its total to $108.5 million.
SheerID Expands Identity Marketing Platform – The move enables brands to identify and acquire new customers across the globe.