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Finovate Global Estonia: Partnerships, Fundraising, and the Fight Against Financial Crime

Finovate Global Estonia: Partnerships, Fundraising, and the Fight Against Financial Crime
By David Penn Posted on
Categories: Bankish, Crypterium, Finovate Global, MasterCard, Modularbank, TeamViewer

In this week’s edition of Finovate Global, we take a look at a handful of developments in Estonia’s fintech industry. With a population of more than 1.3 million, Estonia has the Baltic Sea to the west, the Gulf of Finland to its north, Latvia on its southern border, and the Russian Federation on its eastern flank. The Northern European nation achieved its independence from the Soviet Union in 1991 following the “Singing Revolution” between 1988 and 1990. Estonia is considered a high-income economy per the World Bank, and has been referred to as a “Baltic Tiger” due to the country’s rapid growth.

First up is news on the regtech front. Estonian startup Salv announced that it recently secured a $4.3 million (€4 million) seed round extension. The funding was led by New York-based ffVC and featured participation from Germany’s G+D Ventures, as well as existing investors. Salv’s signature offering, Salv Bridge, is a real-time collaborative crime-fighting platform that leverages the power of its network to reduce non-compliance and combat financial crime. The company said that the funding will help accelerate development of its technology, as well as support Salv’s expansion into other markets, starting with Poland.

“The digitalization of the financial industry has resulted in an avalanche of financial crime, and the numbers are only projected to grow,” Salv CEO Taavi Tamkivi said. “Salv Bridge is proven to be effective against money laundering, sanctions, and fraud.”

The new funding takes Salv’s total capital raised to $8.2 million. Headquartered in Estonia’s capital city of Tallinn, Salv was founded in 2018. The company wrapped up 2022 with a pair of new partnership announcements – teaming up with Estonian-based banking platform Tuum and collaborating with greentech innovator Single.Earth.

Speaking of partnerships, Estonia-based identity verification and AML services provider Veriff announced a partnership with digital asset company Baanx. Veriff will provide identity verification services to the firm, enabling Baanx to confirm user identity during the onboarding process. Veriff’s technology can verify more than 11,200 government-issued identification documents from more than 190 countries and in 47 different languages.

“Cryptocurrencies are disrupting the world of finance, and the crypto industry has evolved dramatically over the past few years,” Veriff COO Indrek Heinloo said. “However, transactions between users are generally anonymous and instantaneous, providing more opportunities for fraudsters and criminals looking to evade conventional anti-money laundering controls. And right now, fraud rates for crypto transactions are at an all-time high.” Heinloo added, “it has never been more important for online banking platforms that offer crypto services to be several steps ahead of these bad actors.”

Veriff was founded in 2015 and is based in Tallinn. The company has raised more than $192 million in funding from investors including Tiger Global Management and Alkeon Capital, who led the company’s Series C round in January of 2022. Also this month, Veriff announced the appointment of Javier Ortega as the firm’s new Chief Revenue Officer.

In recent years, Finovate has showcased a handful of Estonian fintechs. Among the Finovate alums that call Estonia their home are: Bankish, which demoed its technology at FinovateEurope 2020; Modularbank, which made its Finovate debut at FinovateEurope 2019; and Crypterium, which demoed its technology at FinovateFall 2018. At FinovateEurope 2023 next month, we will feature our latest Finovate alum from Estonia: call center performance management software provider, Ender Turing. Learn more about our upcoming fintech conference, FinovateEurope, March 14 through 15 in London, at our FinovateEurope hub.

Here is our look at fintech innovation around the world.

Asia-Pacific

Sub-Saharan Africa

Central and Eastern Europe

  • Tech.eu profiled Germany-based connectivity platform, Team Viewer, and its new partnership with global consumer goods company Henkel.
  • Lithuanian regtech firm AMLYZE teamed up with fraud prevention company Ondato.
  • Turkey-based fintech Papara reached 15 million users, ranking the firm among Europe’s largest neobanks.

Middle East and Northern Africa

Central and Southern Asia

Latin America and the Caribbean

Photo by Marlene Leppänen

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upSWOT Forges Open Banking Partnership with Mastercard

upSWOT Forges Open Banking Partnership with Mastercard
By David Penn Posted on
Categories: Alumni News, Daily news, MasterCard, UpSwot
  • Mastercard and upSWOT announced an open banking partnership this week.
  • The collaboration will enable upSWOT’s small business customers to access actionable insights and more readily secure financing.
  • upSWOT made its Finovate debut in 2020 and returned to the Finovate stage in 2022 for FinovateFall.

A collaboration between Mastercard and North Carolina-based fintech upSWOT will help banks better serve their small business clients by providing them with actionable insights and easier access to capital. Courtesy of Mastercard’s open banking platform and services delivered via its subsidiary Finicity, the partnership will bring open banking capabilities to upSWOT’s platform. This will enable SMEs on upSWOT’s platform to connect owner-permissioned financial data to 200 API-enabled apps, providing services such as accounting, payroll, e-commerce, CRM, and more.

“SMBs have long been accepted as the engines of economic growth and development but at times are underserved,” upSWOT CEO Dmitry Norenko said. “We believe that fintech innovation can dramatically reshape the success of SMBs.”

In a statement, upSWOT and Mastercard said that they will promote the new joint offering to their customers and to U.S. banks. The new features of the combined solution include:

  • Credit Boost: Enables businesses to share data with credit bureaus to potentially increase credit scores
  • Insights: Analyzes multiple data streams to suggest actions businesses can take to improve operations and profitability
  • Cash Flow Forecasts: Provides visibility into expected cash flows using sensitivity analysis and modeling

Bank reconciliation, cash management, business valuation, funding access, and ecommerce performance are also part of the new solution’s feature set.

“We are excited to partner with upSWOT to make it easier for financial institutions to offer their small business customers the ability to benefit from their financial data to make decisions, demonstrate their ability to manage a loan, and run their businesses more efficiently,” Mastercard EVP of U.S. Open Banking Andy Sheehan said.

Founded in 2019 and headquartered in Charlotte, upSWOT made its Finovate debut at our all-digital conference in 2020. The company returned to the Finovate stage last September for FinovateFall. Since then, the company has announced partnerships with Standard Chartered (SC) to launch a pilot project in Singapore and with fellow Finovate alum Cion Digital to bring embedded finance tools to more SMEs.

upSWOT has raised more than $5 million in funding from investors including Common Ocean Ventures.

Photo by Joe Caltiere

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Finovate Global Canada: Clik2pay Partners with Inovatec; BMO Offers Installments; RBC Buys HSBC’s Canadian Business

Finovate Global Canada: Clik2pay Partners with Inovatec; BMO Offers Installments; RBC Buys HSBC’s Canadian Business
By David Penn Posted on
Categories: Compass Plus, Finastra, Finovate Global, MasterCard, nCino, Nordigen, Nubank, ThetaRay

There are many countries whose fintech innovations are often overlooked. And Canada, America’s legendarily kinder, gentler neighbor to the north, is among them.

This week’s edition of Finovate Global takes a look at recent fintech headlines emanating from the Great White North this week. The news ranges from big new fundings to new product launches to deal-making in Canada’s banking industry.

Clik2pay, a payment service provider based in Toronto, Ontario, has teamed up with lending process automation expert Inovatec. The partnership will enables Inovatec’s clients to use Clik2pay’s direct-from-account payment platform to request payments from customers. The functionality leverages Interac’s e-Transfer money transfer solution to ensure safe and secure fund movement.

“Clik2pay is always looking for ways to make the payments process simpler,” Clik2pay Chief Commercial Officer David Robinson said. “Allowing borrowers to make payment directly from their bank account in real-time through an email or text makes paying incredibly easy for the customer and allows for more efficient collections and payment reconciliation by lenders.”

The collaboration will give lenders the ability to use email to collect payments directly from customer bank accounts – and have those payments reconciled automatically on Inovatec’s platform. The process supports agent-assisted collections, as well, enabling lenders to textc customers payment links and secure real-time notification of successful payments “before the borrower hangs up the phone” the company noted in a statement.

Clik2pay is the first Canadian company to provide real-time, direct-from-account payments for businesses at almost all FIs in the country. Founded in 2019, Clik2pay relaunched its Clik2pay mobile app for small businesses last month. The new app features an enhanced user experience, including improved, simplified onboarding. Mike Bradley is founder and CEO.

Canadian banks have made fintech headlines this week, as well. Bank of Montreal (BMO), for example, announced the launch of its new credit card installment offering. Currently available to BMO’s Canadian retail credit card customers via their online banking platform, the new plan – called PaySmart – enables customers to convert eligible credit card purchases of more than $100 into smaller monthly payments.

Customers will be able to choose between three, six, or 12 equal monthly payments. No interest is charged and BMO will access a monthly fee of up to 0.9%. Because purchases are within the customer’s existing credit limits, no additional credit check or approval is required.

BMO’s latest offering is part of a suite of solutions designed to help its customers better manage cash flow and finances. These solutions include the bank’s Pre-Authorized Payments Manager, Same Day Grace feature, and BMO CashTrack.

In other Canadian banking news, Royal Bank of Canada announced that it has purchased U.K.-based HSBC’s Canadian business for $10 billion (£8.4 billion; C$13.5 billion). The move comes as HSBC seeks to bolster its business in Asia – especially China. The company has more than 130 branches and 780,000 customers as part of HSBC Canada. And while HSBC has also expressed plans to abandon its retail banking operations in the U.S. and France, it is the company’s Canadian division that has turned a profit -whereas both its businesses in the U.S. and France have not.

The acquisition is the biggest by RBC under the tenure of CEO Dave McKay, who has also tried to calm concerns about potential layoffs by noting that RBC is considered one of the best workplaces in the country. McKay also pointed to the fact that RBC has nearly 6,000 open positions and referred to the acquisition as a “talent acquisition opportunity” for RBC. HSBC Canada has $134 billion in assets and 4,200 full-time employees.

“HSBC Canada offers the opportunity to add a complementary business and client base in the market we know best and where we can deliver strong returns and client value given our financial strength and award-winning service,” McKay said in a statement.

Earlier this week we shared news that Toronto-based FinovateFall 2019 alum Buckzy Payments had secured $14.5 million in Series A funding. The company offers real-time, cross border payments services, as well as banking-as-a-service capabilities, via its embedded finance platform. The company has more than 140 bank, neobank, and fintech customers since going live with its platform in 2020. This week’s funding takes Buckzy’s total equity capital to more than $23 million. The round was led by Mistral Venture Partners and Uncorrelated Ventures.

“This round of financing is a validation of Buckzy’s vision to create an intelligent and automated international payment system,” Buckzy CEO Abdul Naushad said. “We’re on a mission to build the plumbing for real-time money movement globally, the same way high-speed internet fundamentally shifted the communications industry.”

Here is our look at fintech innovation around the world.

Latin America and the Caribbean

  • Brazil’s Nubank announced that it will offer savings accounts and debit cards in Mexico via its digital banking arm, Nu México.
  • Chilean based alternative credit scoring fintech Destácame raised $10 million in funding.
  • Brazilian fund Latitud released its The LatAmTech Report 2022 this week highlighting trends for B2C fintech in Latin America.

Asia-Pacific

  • Finastra launched a new Center of Excellence (COE) at MRANTI Technology Park in Kuala Lumpur, Malaysia.
  • Cambodia’s ABA Bank leveraged technology from Compass Plus Technologies to introduce instant card issuance kiosks.
  • Financial crime compliance company Napier announced its entry to the Japanese market via its financial crime risk management platform, Napier Continuum.

Sub-Saharan Africa

  • ThetaRay and Ghanian mobile financial services company Zeepay partnered to help fight financial crime in remittance transactions.
  • TechCrunch profiled South African payments company Revio.
  • Kenyan payment service provider Cellulant launched its expansion to South Africa..

Central and Eastern Europe

  • Hamburg Commercial Bank announced that it has implemented and is now live on the nCino Bank Operating System.
  • ING Germany partnered with Viafintech to launch new cash service offering.
  • Estonia-based payment tracking company Transferlink announced a partnership with open banking platform Nordigen.

Middle East and Northern Africa

  • UAE-based expense management platform Qashio secured $10 million in seed funding.
  • Jingle Pay, a financial super app based in the UAE, announced a strategic agreement with Mastercard.
  • Israel-based workplace intelligence platform Shield raised $20 million in Series B funding.

Central and Southern Asia

  • KreditBee, a fintech platform based in India, raised $80 million in Series D funding.
  • Mumbai-based youth banking startup Galgal Money secured $1 million in funding.
  • M bank in Mongolia is the latest customer – and first Mongolian client – of Singapore-based B2B SaaS fintech finbots.ai

Photo by Andre Furtado

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Finovate Global VC Edition: Quona Capital Backs Financial Inclusion in Emerging Markets with New Fund

Finovate Global VC Edition: Quona Capital Backs Financial Inclusion in Emerging Markets with New Fund
By David Penn Posted on
Categories: Entrust Datacard, Finastra, Finovate Global, Mambu, MasterCard, Temenos, VISA

Good news for fintech startups in developing markets! Quona Capital recently announced that it has closed its latest fintech fund, its third, at $332 million. The venture capital firm, which specializes in emerging markets, noted that the amount raised topped its target of $250 million. The new fund, Fund III, will be focused on companies that are developing technologies that expand access to financial services for consumers and businesses in regions ranging from Latin America and India to Southeast Asia, MENA, and Africa.

“Since our earliest days, Quona has been dedicated to expanding the frontiers of financial inclusion – investing with conviction in markets and technology-enabled models improving access and quality of financial services for the masses,” Quona co-founding managing partner Monica Brand Engel said in a statement. “Our prior fund performance, robust pipeline of inclusive fintechs, and growing LP interest in our offerings are ringing endorsements of our view on the prospects of impact-oriented venture investing in emerging markets.”

With aggregate capital of more than $745 million, Fund II is the firm’s third fund since Quona Capital was launched in 2015. Those contributing to the fund as investors include global asset managers, insurance companies, both investment and commercial banks, endowments, foundations, family offices, and more. And while many of the investors in Fund III have invested in Quona Capital funds previously, the new fund did receive capital from 20 new investors, as well.

According to Quona Capital, the startups in its portfolio have served nearly nine million small and medium-sized businesses and over 30 million retail customers. Quona Capital startups have raised nearly $4 billion in capital and generated more than $800 million in revenues. Among these firms are India-based consumer lending company ZestMoney, Southeast Asia-based fintech marketplace ula, and long-time international remittance firm and long-time Finovate alum Azimo – which was acquired by Papaya Global earlier this year.

Here is our look at fintech innovation around the world.

Central and Southern Asia

  • Indian neobank ZikZuk acquired tax e-filing platform TaxSpanner.
  • National Bank of Pakistan turned to Finastra to enhance its trade finance operations.
  • Lentra, a fintech based in India, secured $60 million in Series B funding for its loans-as-a-service business for banks.

Latin America and the Caribbean

  • AstroPay introduced its Mastercard prepaid card in Brazil.
  • Mexico-based B2B payments company Mendel raised $60 million in new funding.
  • Brazil’s Agrolend, which provides credit to the country’s farmers, secured $27 million in Series B funding.

Asia-Pacific

  • Ant Group introduced its Buy Now, Pay later offering in Hong Kong.
  • Vietnam-based Sacombank partnered with Temenos to enhance digital banking.
  • Philippines-based neobank Tonik unveiled its all-digital lending products, Flex Loan and Big Loan.

Sub-Saharan Africa

  • Nigerian fintech Paga unveiled its Visa-branded card this week.
  • Pan-African paytech Cellulant secured a Payment Systems Operator license from the National Bank of Uganda
  • Samsung South Africa launched its digital wallet, Samsung Wallet.

Central and Eastern Europe

  • Polish fintech Ramp locked in $70 million in Series B funding to build payment rails for cryptocurrency investors.
  • Co-investment platform for European startups SeedBlink secured licensing from the Romanian Financial Supervisory Authority (ASF).
  • Genome, an Electronic Money Institution based in Lithuania, partnered with Entrust to simplify digital payments.

Middle East and Northern Africa

  • UAE-based Wio Bank went live with Mambu’s cloud-native banking platform.
  • Pyppl, a financial services platform based in the UAE, raised $20 million in Series B funding.
  • Saudi Arabia’s central bank presented its open banking framework.

Photo by Ricky Gálvez

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JP Morgan and Mastercard Leverage Open Banking to Launch Pay-by-Bank Tool

JP Morgan and Mastercard Leverage Open Banking to Launch Pay-by-Bank Tool
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news, JP Morgan Chase, MasterCard
  • J.P. Morgan Payments and Mastercard partnered to launch Pay-by-Bank, an ACH payment tool that leverages open banking.
  • Billers who offer consumers an option to a pay via ACH can integrate Pay-by-Bank into their existing payments page.
  • Pay-by-Bank is currently in a pilot phase with a small number of U.S. billers, but will be rolled out to more billers in 2023.

Today’s news proves you can indeed teach an old dog new tricks. ACH, a technology that is 50+ years old, is getting a makeover with open banking.

J.P. Morgan Payments and Mastercard have joined forces this week to launch Pay-by-Bank, an ACH payment tool that leverages open banking and consumer-permissioned data to make it easy for users to pay bills directly from their bank accounts.

“We realized years ago that the way people think about money and commerce is changing,” said Mastercard North America Executive Vice President Chiro Aikat. “They want to pay and get paid how they choose, where they choose and when they choose. We’re excited by this new partnership with J.P. Morgan Chase, and our opportunity to empower people with enhanced payment experiences.”

Billers who offer customers an option to pay using ACH can integrate Pay-by-Bank into their existing payments page. Customers who opt to use the new technology will be prompted to find their bank, complete the bank’s account login process, and share their bank account information with JP Morgan Chase.

Pay-by-Bank makes for a better user experience. Consumers will no longer need to type in their routing and account number each time they go to pay a bill. As for the billers, they will not be faced with the liability of storing consumers’ account information.

“Billers and consumers both get greater payment choice,” said Aikat, “but the partnership also propels payments innovation on two fronts — in the ease of the user experience and in the security of data sharing.”

J.P. Morgan Payments Head of Payments and Commerce Solutions Max Neukirchen echoed this sentiment. “The technology behind Pay-by-Bank reduces the likelihood of unauthorized transactions and frees our clients from the need to retain — and the responsibility to securely maintain — consumer banking information,” Neukirchen said.

As an additional benefit to consumers, Pay-by-Bank leverages machine learning to estimate the optimal time to initiate the payment based on the consumer’s historical transaction behavior and risk patterns. This helps reduce the risk of non-sufficient funds for the consumer and helps ensure the merchant receives the payment on time.

Pay-by-Bank is still in a pilot phase with a small number of U.S. billers and merchants, but J.P. Morgan Payments and Mastercard anticipate they will expand the program next year. 

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5 Tales from the Crypto: Pillow Raises $18 Million; BlueSnap and BitPay; Coinbase and Google

5 Tales from the Crypto: Pillow Raises $18 Million; BlueSnap and BitPay; Coinbase and Google
By David Penn Posted on
Categories: Alumni News, Coinbase, Daily news, List series, MasterCard

Cryptocurrency Investment Platform Pillow Raises $18 Million

In a round co-led by Accel and Quona Capital, crypto investment platform Pillow has secured $18 million in Series A funding. Also participating in the round were Elevation Capital and Jump Capital.

Singapore-based Pillow enables individuals to save and invest in a variety of major cryptocurrencies. The company will use the capital to power expansion of its cryptocurrency savings and investment services into emerging markets in Africa and Southeast Asia. Pillow already operates in Nigeria, Ghana, and Vietnam. This week’s funding adds to the $3 million in seed capital Pillow secured earlier this year.

Founded in 2021, Pillow has more than 75,000 users in more than 60 countries on its app. Among the cryptocurrencies available are: Bitcoin, Ethereum, Solana, Polygon, and Axie Infinity, as well as USD-backed stablecoins, USDC and USDT. Pillow plans to support more than 20 different digital assets over the next few months. The company offers returns of more than 10% on its stablecoins and approximately 6% on Bitcoin and Ethereum. Pillow earns its money by investing user funds in DeFi protocols on blockchain networks.

BlueSnap and BitPay Team Up for Crypto Acceptance and Payout

Payment orchestration platform BlueSnap announced a new partnership this week. The company is teaming up with cryptocurrency payments company BitPay to enable businesses to accept and make payouts in as many as 15 different cryptocurrencies – as well as seven fiat currencies. The currencies available include leading digital assets such as Bitcoin, Ethereum, Litecoin, Ripple, and Dogecoin. Five stablecoins pegged to the U.S. dollar and one stablecoin pegged to the Euro will also be supported.

Courtesy of the partnership, customers will be able to accept cryptocurrencies and be paid out in fiat currencies including the U.S. dollar, the Euro, the British pound, and the Mexican peso, as well as the Canadian, Australian, and New Zealand dollars.

BlueSnap and BitPay noted in a statement that a growing number of retailers are accepting cryptocurrencies as payment, and that consumers were becoming increasingly “crypto curious.”

“By working with one of the most well-respected crypto companies in the industry, we’ll be able to make the new payment experience as frictionless as possible,” BlueSnap Managing Director for Europe Nihkhita Hyett said. “We look forward to making a real impact in this new space – through developing technologies like blockchain and cryptocurrency – as we foster greater innovation in payments, and further our growth across Europe.”

WSJ: NYDIG Lays Off a Third of its Workforce

According to reporting in the Wall Street Journal, institutional cryptocurrency custody firm NYDIG has laid off more than 100 of its workers, an amount believed to be approximately a third of the New York-based crypto firm’s total workforce. The layoffs took place over a number of weeks per the Journal’s sources, and come almost a year after NYDIG raised $1 billion in funding at a valuation of more than $7 billion. NYDIG mentioned using the capital to “further expand its world-class team across the globe” – though this was noted toward the end of the company’s funding announcement. Using the capital to “develop NYDIG’s institutional-grade Bitcoin platform” was noted in paragraph two.

More recently, NYDIG was in the headlines for the C-suite shuffle in October that had CEO Robert Gutmann and President Yan Zhao stepping down and returning to NYDIG’s parent company Stone Ridge Holdings. Gutmann and Zhao co-founded Stone Ridge, along with Ross Stevens, in 2012.

There has been no comment on the lay off report from NYDIG at this time.

Mastercard Teams Up with Blockchain Platform Paxos

Our last edition of 5 Tales highlighted Mastercard’s new Crypto Secure solution that helps card issuers assess the risk profile of crypto exchanges and other providers.

This week we share more news of Mastercard and its business in the crypto space. The company has announced a partnership with blockchain infrastructure platform Paxos that will enable financial institutions to offer secure cryptocurrency trading capabilities to their customers. Mastercard’s Crypto Source program will give its financial institution partners access to a suite of services that will enable them to buy, hold, and sell select crypto assets.

The suite of services provides technology and partnership support to enable FIs to buy, sell, and hold select digital assets; security management, including AML, transaction monitoring, and KYB; crypto spend and cash out capabilities; and crypto program management, including go-to-market optimization.

“What we are announcing today is a connected approach to services that will help bring the next billion users safely and securely into the crypto ecosystem,” Mastercard President, Cyber & Intelligence, Ajay Bhalla said.

Mastercard demoed its technology at FinovateFall 2017. More recently, the company demoed in partnership with Strands at FinovateSpring 2019.

Coinbase Expands in Europe – And Adds a Friend in Google

Cryptocurrency exchange Coinbase has had more than its fair share of less than pleasant news over the past few days. Today we read headlines about the company experiencing the largest outflow of Bitcoin since June. This follows reports of hundreds of Coinbase users in the Republic of Georgia who allegedly profited from a pricing glitch – and what Coinbase may have to do to get the money back.

Meanwhile, the San Francisco-based company continues to grow, expanding its operations in Australia earlier this month with a pair of new features. PayID will enable Australians to top up their Coinbase accounts directly with Australian dollars. Retail Advanced Trading will give local clients access to low volume-based pricing and trading tools with one unified balance.

And earlier this week, Coinbase introduced the man who will lead the company’s expansion in Europe: former Solarisbank Chief Operating Officer Daniel Seifert. The appointment comes as Coinbase gains momentum in the region, earning regulatory approval to offer its services to customers in Italy in July and the Netherlands in September. Coinbase VP of International and Business Development Nana Murusegan has called international expansion an “existential priority.”

But the biggest news of the week for the company is the announcement that Google has partnered with Coinbase to allow select customers pay for cloud services via cryptocurrencies starting early next year. The capability will be made possible thanks to an integration with Coinbase Commerce, which supports 10 cryptocurrencies including Bitcoin, Ethereum, Dogecoin, and Litecoin. Coinbase will earn a fraction of each transaction processed, according to the company’s VP of Business Development Jim Migdal.

Coinbase made its Finovate debut in 2014. More than 100 million individuals and companies use Coinbase’s technology to buy, sell, and hold cryptocurrencies.

Photo by Pixabay

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FutureTech Friday: Mastercard Approves Quantum Resistant Contactless Cards

FutureTech Friday: Mastercard Approves Quantum Resistant Contactless Cards
By David Penn Posted on
Categories: Alumni News, Daily news, MasterCard

Although not getting as much attention these days as the metaverse or Web3, the potential impact of quantum computing in financial services certainly has the attention of the industry’s biggest players. This week, Mastercard approved the first cards for issuers that meet EMVCo contactless specifications to protect cardholders from attacks from quantum computers as well as traditional computers.

“Technology has the potential to open new opportunities for both consumers and fraudsters,” President of Cyber & Intelligence at Mastercard Ajay Bhalla said. “That’s why future-proofing security is critical.”

Quantum computing involves leveraging the capacities of quantum physics to solve certain computational problems faster than traditional computers. Much of the buzz over quantum computing is related to the purported ability of quantum computing to defy even the most rigorous encryption protocols. And while some of these concerns may have been overblown, at least in the short term, the ability of quantum computers to solve certain complex problems faster than the most advanced supercomputers currently available makes them a potential source of major financial crime if adequate safeguards are not in place.

To this end, Mastercard introduced new, quantum-resistant Enhanced Contactless specifications in January 2021. Referred to as “Ecos” the new specifications are designed to provide greater convenience for merchants and financial institutions, enhanced trust thanks for next-generation algorithms and cryptographic key strengths, and enhanced privacy to deliver protection when account information in shared between the card or digital wallet and checkout.

“As the ecosystem continues to evolve, more connected devices and the Internet of Things are going to create more user demand, and an even greater need for constant innovation to build next-generation capability, helping to ensure that technology never outpaces trust,” Bhalla said when the Ecos specifications were unveiled. In the months since then, Mastercard has teamed up with EMVCo to continue to develop the Ecos-compliant technology with the goal of making it an industry standard for contactless acceptance. In a statement, Mastercard cited a Juniper report that indicated that contactless payment devices will top 12.5 billion by 2027. The value of contactless transactions is similarly expected to grow, reaching $10 trillion worldwide by 2027.

“By bringing quantum-era technology to contactless payments, we are taking steps to future-proof security and privacy protection as much as possible,” Bhalla said this week. “These new cards will deliver that greater peace of mind, while also providing consumers and merchants a seamless transition from today’s contactless experience.”

Mastercard’s embrace of quantum computing has been marked in 2022. In July, the company announced a multi-year strategic alliance with D-Wave Systems, the world’s first commercial supplier of quantum computers. In February, Mastercard’s Foundry Live Series presented The Quantum Advantage, a look at the potential impact of quantum computing in financial services.

Photo by cottonbro

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Ethoca and ChargebackZero Team Up to Help Merchants Minimize Chargebacks

Ethoca and ChargebackZero Team Up to Help Merchants Minimize Chargebacks
By David Penn Posted on
Categories: Alumni News, Daily news, Ethoca, MasterCard
  • Ethoca announced a partnership with India’s ChargebackZero to help merchants eliminate chargebacks.
  • The collaboration will integrate Ethoca’s chargeback alert technology into ChargebackZero’s Intelligent Dispute Prevention & Management Solution (iDPMS).
  • Ethoca made its Finovate debut in 2015 at FinovateFall. The company was acquired by Mastercard in 2019 for an undisclosed sum.

Ecommerce fraud and chargeback prevention company Ethoca has teamed up with India-based ChargebackZero to help merchants minimize chargebacks. The partnership will also bring greater transparency to consumer transactions, and make it easier for merchants to share the details of confirmed fraud and dispute incidents.

The collaboration will enable merchants to rely on a chargeback alert system that notifies them in the event of an impending chargeback. Notifications are made via the ChargebackZero dashboard, which combines a variety of alert types from card issuers with ChargebackZero’s dispute management tools. The alerts allow merchants to identify and revolve customer disputes with the customer’s issuing bank in near-real time. By preventing chargebacks, including chargebacks that occur post-authorization, the partnership will make it easier for merchants to accept more orders without increasing their exposure to potentially fraudulent activity.

Ethoca offers a suite of solutions to help merchants and issuers eliminate chargebacks, reduce card not present (CNP) fraud, recover lost revenue, and improve the customer experience with a better dispute resolution process. Ethoca’s Consumer Clarity solution connects issuers to merchant order and account history details in real time. This gives issuer call center agents with the data they need to manage real-time conversations with cardholders when disputes arise. Ethoca also offers its Ethoca Alerts technology, which provides issuers and card-not-present merchants with access to a global collaboration network that enables them to share fraud and customer dispute data in real time, rather than in weeks as is normally the case with chargebacks.

Headquartered in Toronto, Ontario, Canada, Ethoca made its Finovate debut at FinovateFall in 2015. In the years since then, the company has inked partnerships with fellow Finovate alum TSYS, as well as Pegasystems, BlueSnap, and Cartes Bancaires. Ethoca agreed to be acquired by Mastercard in the spring of 2019 for an undisclosed sum. Calling Mastercard “a natural home,” Ethoca CEO Andre Edelbrock said the acquisition would “bring our services to more places and more people, ultimately contributing to the beset possible online payment experience.”

Ethoca serves more than 5,400 merchants in 40+ countries and more than 4,000 card issuers in more than 20+ countries. Eight of the top ten North American ecommerce brands, 14 of the top 20 North American card issuers, and six of the top ten U.K. card issuers use Ethoca’s technology to eliminate chargebacks, prevent fraud, and recover lost revenue.

Photo by Pixabay

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Uber Launches New Driver Debit Card

Uber Launches New Driver Debit Card
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news, Green Dot, Marqeta, MasterCard
  • Uber is launching a new debit card with tandem checking account.
  • The Uber Pro debit card is made available via partnerships with Mastercard, Marqeta, and Branch.
  • Uber Pro cardholders can receive up to 7% cashback on fuel purchases.

Uber’s latest attempt to attract more drivers to its platform comes in the form of a debit card with a tandem checking account. Late last week, the rideshare company announced the Uber Pro debit card.

The new debit card comes courtesy of partnerships with Mastercard, Marqeta, and Branch, a workforce payments platform that caters to gig economy workers and contractors. The card offers Uber drivers up to 7% cash back on gas purchases when they achieve Diamond status as an Uber Pro driver.

The Uber Pro card comes with a checking account powered by Branch, which will automatically deposit cardholders’ earnings into their account after every trip. Branch offers a unique take on earned wage access by enabling workers to access their paycheck as they earn it. The card currently has a wait list and will launch in the coming weeks.

This latest announcement comes three years after Uber originally introduced Uber Money, a debit card and mobile app powered by Green Dot, and five years after the company launched its Barclays-powered credit card.

The launch of the Uber Pro card comes alongside a handful of other driver-related announcements from the ridesharing company. The Uber app will now offer drivers a range of nearby trips to choose from, show drivers their exact earnings upfront before they accept a trip, and offer enhanced benefits to Uber Pro drivers.

These driver-focused benefits are in part an effort to smooth out the supply and demand issue that Uber is facing. The nationwide labor shortage, combined with high fuel prices, has historically made it difficult for Uber to attract drivers. In May, Uber CEO Dara Khosrowshahi said, “Our need to increase the number of drivers on the platform is nothing new nor is it a surprise … there’s a lot of work ahead of us, but this is a machine that is rolling.”

Photo by freestocks.org

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Finovate Global Germany: Ecolytiq Partners with Tatra Banka; Airbank Inks Deal with Klarna Kosma

Finovate Global Germany: Ecolytiq Partners with Tatra Banka; Airbank Inks Deal with Klarna Kosma
By David Penn Posted on
Categories: Crassula, ecolytiq, Finovate Global, FIS, MasterCard, PaySend, Salt Edge, WorldPay

This week’s edition of Finovate Global takes a look at recent fintech developments in Germany where green banking, embedded finance, and open banking are the themes at the top of this week’s fintech headlines.

First up, Berlin-based Sustainability-as-a-Service innovator ecolytiq announced that it was teaming up with Slovakian financial institution Tatra Banka. The climate engagement fintech will provide Tatra Banka with the technology the firm needs in order to launch new green banking functionality on its online banking brand, Blue Planet. The new feature, which will be made available to Tatra Banka’s more than 600,000 customers, will enable users to monitor the impact their transactions may have on the environment (for example, with CO2 emissions), provide users with ideas on how to reduce their environmental impact, and offer rewards for spending that is environmentally friendly.

Founded in 2020, ecolytiq demonstrated its technology at Finovate’s developer event, FinDEVr 2021, which was held as a part of FinovateSpring that year. Putting accurate data at the center of the ability to move toward greater environmental sustainability, ecolytiq demonstrated how its open knowledge graph and streaming technology keep its data relevant and current. More recently, the company announced a strategic partnership with exceet Card Group, makers of sustainable payment cards made from wood and, the following month, teamed up with French sustainable neobank Green-Got.

Peter Golha, a director at Tatra Banka said that the institution believed it had a a role to play in the transition toward a more environmentally sustainable economy. “Not only have we a chance to change our own trajectory, but also a chance to live the topic of sustainability alongside our clients,” Golha said.

Founded in 1990, Tatra Banka was the first private bank to be established in Slovakia. Winner of the TREND Bank of the Year award for two years in a row, Tatra Banka announced this spring that it had achieved its greatest profit to date, reporting $164 million (EUR 162.1) in consolidated profits for the financial year 2021.

Second, German financial management platform for businesses Airbank inked a deal with Klarna Kosma this week. Klarna Kosma is an open banking platform launched by Swedish e-commerce innovator Klarna this spring. Seen as a rival to fellow Finovate alum Tink and its open banking platform, Klarna Kosma offers financial institutions, fintechs, and merchants connectivity to more than 15,000 banks in 24 countries around the world via a single API. Kosma was made possible in many ways by Klarna’s acquisition of direct, bank-to-bank payments company SOFORT in 2014, and Klarna has been developing and expanding the service ever since.

“Over the past year, the demand for Open Banking services from financial institutions and fintech startups has reached a tipping point,” Klarna Kosma VP Wilko Klaassen said. “(This) is why we have built a dedicated business unit which brings together engineering, product management, sales and marketing all together in the same team to focus on this $15 billion, fast-growing market.”

Airbank will leverage its new relationship with Klarna Kosma to “accelerate” its expansion into European markets and beyond. Airbank enables businesses to consolidate their bank accounts in a single location, allowing them to more easily automate bill management, make payments, and manage their finances. Companies also can use Airbank’s platform to track their financial transactions and forecast future liquidity. The partnership with Klarna Kosma will make it possible for Airbank to securely access account information from thousands of banks around the world, expand more aggressively, and better serve its SME customers that have global requirements.

“By the end of this year, we will serve over 50 counties, making Airbank the most comprehensive global banking solution for SMEs in the industry, with the ability to connect bank accounts from almost anywhere in the world,” Airbank founder and CEO Christopher Zemina said. “We are delighted to have Klarna Kosma as an experienced and dynamic partner that shares our ambition to shape the future of B2B financial management.”

Lastly, early in the week we learned that Berlin-based embedded finance startup Monite had teamed up with Codat, a U.K. firm that offers a universal API to enable access to consented business data from banking, accounting, and ecommerce platforms. The partnership will enable both SaaS platforms and financial institutions to integrate invoicing and billing functionality into their apps. This will allow platforms and institutions to offer businesses a unified solution for managing their financial operations.

In a statement, the CEOs of both Monite and Codat praised the great variety of financial apps and platforms dedicated to serving SMEs. The challenge, according to both Monite CEO Ivan Maryasin and Codat CEO Pete Lord, is that the variety can be overwhelming for many small businesses. “What’s still missing are the ‘super apps’ that bring everything together,” Maryasin said. “It can be time-consuming to manage and get the most out of them all,” concurred Lord.

Founded in 2020, Monite has raised $7.8 million in funding for its technology that empowers financial institutions and platforms to offer financial services such as multi-banking, AP automation, invoicing, and more to their customers. London, U.K.-based Codat neared unicorn status last month upon raising $100 million in Series C funding. The investment took the company’s total funding to more than $176 million and gave Codat a valuation of $825 million. The round was led by JPMorgan Partners, and featured participation from Plaid and Shopify.

Founded in 2017, Codat began this year with the announcement of a partnership with Moody’s Analytics to enhance small business lending.

Here is our look at fintech innovation around the world.

Asia-Pacific

Sub-Saharan Africa

Central and Eastern Europe

  • Austrian fintech Helu.io, which specializes in providing financial solutions for SMEs, raised more than $10 million in Series A funding.
  • Rubicon, a fintech headquartered in Albania, announced an expanded partnership with Mastercard.
  • Latvia’s Crassula, a white label cloud banking software company, teamed up with Canadian open banking solutions provider Salt Edge.

Middle East and Northern Africa

Central and Southern Asia

Latin America and the Caribbean

Photo by XU CHEN

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Mastercard Forges Multi-Year Strategic Alliance with Quantum Computing Company D-Wave Systems

Mastercard Forges Multi-Year Strategic Alliance with Quantum Computing Company D-Wave Systems
By David Penn Posted on
Categories: Alumni News, Daily news, MasterCard
  • Mastercard announced a multi-year strategic alliance with quantum computing leader D-Wave.
  • The partnership will explore applications for quantum computing technology in financial services.
  • D-Wave builds both annealing and gate-model quantum computers, the only firm in the world to do so.

Will quantum computing take the place of crypto in terms of the fintech zeitgeist?

Mastercard announced this week that it has forged a multi-year strategic alliance with D-Wave Systems, a leader in quantum computing systems, software, and services. The goal of the collaboration will be to accelerate the adoption of quantum-based computing solutions.

Specifically the partnership will seek to develop “quantum-hybrid” solutions to solve problems in consumer loyalty and rewards, cross-border settlement, and fraud management. The two companies will use D-Wave’s annealing quantum computers and quantum hybrid solvers through the Leap quantum cloud service to deliver real-time access to quantum applications powered by Mastercard’s network.

“People expect hyper-personalized experiences,” Mastercard Chief Innovation Officer Ken Moore said. “Quantum computing’s unique ability to analyze huge numbers of potential combinations can deliver optimal solutions that will improve efficiency and provide choice.” Moore said that the partnership will explore applications of quantum computing technology that offer “practical, real-world” solutions in financial services.

The world’s first commercial supplier of quantum computers, D-Wave is the only firm building both annealing quantum computers and gate-model quantum computers. D-Wave’s technology has been used to solve challenges in a wide range of fields including logistics, drug discovery, cybersecurity, and financial modeling. Founded in 1999 and headquartered in Burnaby, British Columbia, Canada, D-Wave has partnered with firms such as NEC Corporation, Volkswagen, Lockheed Martin, and the University of Southern California. PSP Investments, Goldman Sachs, and BDC Capital are among D-Wave’s investors.

“D-Wave and Mastercard have a shared vision of harnessing the power of technology to positively affect business and society,” D-Wave CEO Alan Baratz said. “This alliance supports that vision by delivering quantum innovation that will tackle increasingly complex problem sets across applications like loyalty programs, fraud management and anti-money laundering in financial services and, ultimately, unlock more value for customers.”

Photo by Antonio Friedemann

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Indonesian Fintech Flip Raises $55 Million; Visa Launches Crypto-Back Cards in LATAM

Indonesian Fintech Flip Raises $55 Million; Visa Launches Crypto-Back Cards in LATAM
By David Penn Posted on
Categories: Finovate Global, MasterCard, Nordigen

Courtesy of Tencent, Block (formerly known as Square), and existing investor Insight Partners, Indonesian consumer payments platform Flip has secured a $55 million addition to its Series B round. Also involved in the funding were a handful of individual investors including Checkout.com CEO Guillaume Pousaz, DoorDash executive Gokul Rajaram, and former Venmo COO Michael Vaughan.

No updated valuation information was included in the funding announcement. The company has raised a total of $120 million since inception three years ago. Flip raised $48 million in Series B funding in December 2021.

Flip enables millions of Indonesians to access P2P payments with interbank transfers to more than 100 Indonesian banks. The company also offers international remittances, e-wallet top-ups, and business solutions for employee payroll, customer refunds, invoice and supplier payments, as well as international transfers. More than $12 billion in transactions a year are processed on Flip’s platform.

“The growth opportunity of the Indonesian digital economy is vast with its massive population and favorable demographics, Flip co-founder and CEO Rafi Putra Arriyan said. “We are laser-focused on helping millions of Indonesians, both individuals and businesses, execute various money transactions at a low cost through our platform.”

Flip plans to use the new capital to increase headcount, especially with regard to engineering and product development. The company also will invest in new products and technology development to both enhance quality of service and power further expansion.

Crypto may be a fighting word in El Salvador these days, which has hitched its economy to the fate of digital assets like nowhere else. But the move to bring cryptocurrency-based solutions to Latin America is still going strong. Visa announced late this week that it is launching the first crypto cards in Latin America – targeting Brazil and Argentina for the debut of its new products.

As reported in Crypto News and other media outlets that picked up the story from Expansión, Visa has partnered with a number of fintech companies in the region to issue cards that will enable users to receive cashback in Bitcoin when they make payments. In Argentina, Visa’s partners include cryptocurrency exchange Lemon Cash, which will offer 2% Bitcoin cashback Visa cards. Visa also has teamed up with Argentinian cryptocurrency trading platform Satoshi Tango and Crypto.com. In Brazil, Visa is working with Alterbank and Zro Bank.

“The cryptocurrency ecosystem continues to gain momentum in the region with increased investment, more consumer adoption, and more crypto-enabled use cases,” Visa SVP of Products and Innovation for Latin America and the Caribbean Romina Seltzer said. “We will continue to build on our strong strategy to build the future of crypto and payments for our customers, clients, partners, and consumers.”

Here is our look at fintech innovation around the world.

Sub-Saharan Africa

Central and Eastern Europe

Middle East and Northern Africa

Central and Southern Asia

Latin America and the Caribbean

Asia-Pacific

Photo by Artem Beliaikin

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