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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

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FinovateSpring 2022 Sneak Peek: Finicity, a Mastercard company

FinovateSpring 2022 Sneak Peek: Finicity, a Mastercard company
By Heather Stowell Posted on
Categories: Finicity, FinovateSpring 2022, FinovateSpring 2022 Sneak Peek, MasterCard

A look at the companies demoing at FinovateSpring in San Francisco on May 18 and 19. Register today and save your spot.

Mastercard takes the uncertainty out of digital payments with Smart Payment Decisioning Tools. Advanced data analytics and ML make payments faster, more convenient, and safe.

Features

  • Better onboarding experience
  • Reduce ACH returns, failure & fraud
  • NACHA Verification for WEB debit rule

Why it’s great

Mastercard’s Smart Payment Decisioning Tools reduce risk in ACH payments and optimize cost and speed through open banking.

Presenter

Serenie Gagon, VP Product Management
Gagon is an experienced product evangelist with deep expertise in the payments space. Gagon is responsible for strategic vision and payment enablement roadmap through open banking.
LinkedIn

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Have Cryptocurrency Firms Reached a Moral Crossroads Over Ukraine?

Have Cryptocurrency Firms Reached a Moral Crossroads Over Ukraine?
By David Penn Posted on
Categories: Finovate Global, MasterCard, VISA

While much of the financial world is united in its efforts to distance itself from Russia as the country’s leader, Vladimir Putin, orders his forces continue their invasion of neighboring Ukraine, many of those in the cryptocurrency world are decidedly more ambivalent.

Is this a function of the underlying libertarian spirit that powers much of the enthusiasm for digital assets? Or is this just a reflection of a relatively young industry that is not yet ready to take on the responsibilities that its growing role in the financial world will eventually demand?

First, the ask. At the beginning of the week, Ukrainian Vice Prime Minister and Minister for Digital Transformation Mykhailo Fedorov took to social media to ask cryptocurrency exchanges to block transactions from Russia. Federov’s request was not just directed at the Russian government, or the country’s notorious oligarchs, but for everyday Russian users of cryptocurrencies, as well.

“It’s crucial to freeze not only the addresses linked to Russian and Belarusian politicians,” Federov wrote on Twitter, “but also to sabotage ordinary users.”

In the same way that some people have criticized the international sanctions regime against Russia for allowing a loophole when it comes to energy – specifically banning oil and gas exports from Russia – Federov and others have warned that not restricting, if not outright eliminating, Russian access to cryptocurrencies is a critical flaw in the effort to financially squeeze the Russian economy.

In response to this request, many nations have taken action. France’s Finance Minister, Bruno le Maire, said that the EU would include cryptocurrencies in its sanctions. The Financial Conduct Authority in the U.K. has reminded its U.K.-based and regulated cryptocurrency companies of their obligations to respect the sanctions policy against Russia. Even those cryptocurrency firms that are not regulated have been encouraged to support the sanctions regime. “We would urge unregulated member(s) to take action to ensure your platforms do not become a loophole for sanctioned Russians,” U.K. cryptocurrency organization Crypto UK said in a statement.

In the U.S., while some lawmakers have encouraged the government to help ensure that Russians are not using cryptocurrencies to skirt sanctions, the Biden Administration appears less concerned about that threat – at least on the large scale. Carol House, director of cybersecurity for the National Security Council said this week that “the scale that the Russian state would need to successfully circumvent all U.S. and partners’ financial sanctions would almost certainly render cryptocurrency as an ineffective primary tool for the state.” If anything, it seems that U.S. authorities are somewhat more concerned about potential theft and cybersecurity issues surrounding cryptocurrency companies than they are of Russians using these firms and exchanges for what would otherwise be legitimate purposes.

The response from cryptocurrency companies – including some of the largest firms like Binance and Kraken – have suggested that while they are comfortable blocking the accounts of sanctioned Russians, banning all Russians from their platforms is, for these companies, a bridge too far. At least for now.

“We are not political, we are against war, but we are here to help the people,” Binance founder and CEO Changpeng Zhao said, explaining his company’s position. “There are a few hundred individuals that are on the international sanctions list in Russia, mostly politicians, and we follow that very, very strictly.” But Zhao added that Binance draws a line “between the Russian politicians who start wars and the normal people, many normal Russians do not agree with war.”

Similarly, Kraken CEO Jesse Powell tweeted, “I understand the rationale for this request (to block Russians from Kraken’s platform) but, despite my deep respect for the Ukrainian people, Kraken cannot freeze the accounts of our Russian clients without a legal requirement to do so.”

That said, Powell noted, “Russians should be aware that such a requirement could be imminent.”

Additionally, it should be added many cryptocurrency companies are not agnostic to the conflict in the Ukraine and have lent their support to the Ukrainian cause. Federov expressed his, and his country’s, appreciation for the efforts of firms like Polkadot, which donated $5 million, as well as Solana and Everstake, which have created a joint effort called Aid for Ukraine in partnership with the country’s Ministry of Digital Transformation.

“This will certainly contribute to the Ukrainian victory as well as support civil people,” Federov said on Twitter earlier this week. “We will win – the best people (are) with us.”

FinovateEurope 2022 is only a few weeks away. Register today to save your spot at our annual European fintech conference: March 15 digitally and live in London on March 22 and 23.

Here is our look at fintech innovation around the world.

Middle East and Northern Africa

Central and Southern Asia

Latin America and the Caribbean

Asia-Pacific

Sub-Saharan Africa

Central and Eastern Europe

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Mastercard Adds Two Partners to its Business Payments Service

Mastercard Adds Two Partners to its Business Payments Service
By Julie Muhn (@julieschicktanz) Posted on
Categories: Alumni News, Daily news, MasterCard

Yesterday, Mastercard unveiled two new clients for its Mastercard Track Business Payment Service. The New York-based payments giant announced that BMO and Moneris Solutions Corporation have joined Mastercard Track.

Mastercard launched the new service for Canadian businesses earlier this year. Mastercard Track creates efficiencies for business users by simplifying and automating the exchange of payments data between buyers and suppliers. The service seeks to modernize the $135 trillion B2B payments market.

“Current business payment processes often require manual reconciliation work that can be very labour intensive,” said Sasha Krstic, President of Mastercard in Canada. “The availability of Mastercard Track through our new partnerships with BMO and Moneris will help Canadian businesses gain freedom from an inefficient process by simplifying and automating the exchange of payments to make B2B payments work harder, faster and smarter.”

Using Mastercard Track will help BMO and Moneris modernize the business payments process for their customers. Ultimately, the service will free up working capital for businesses by offering them more control of their payments and helping them to optimize cash flow management.

Derek Vernon, Head of Payments Modernization of BMO’s North American Commercial Deposits and Corporate Card division said that the service “enhances the digital experience by offering a universal solution to simplify and automate B2B payments.” Specifically, Vernon noted that Mastercard Track will help reduce supplier friction and facilitate quicker speed-to-spend.

Mastercard is a public company listed on the New York Stock Exchange under the ticker MA. It has a market capitalization of $364 billion. Michael Miebach took the helm of the company as CEO in January of last year.

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Will 2022 Be the Year Central Bank Digital Currencies Break Out?

Will 2022 Be the Year Central Bank Digital Currencies Break Out?
By David Penn Posted on
Categories: Avaloq, Finovate Global, MasterCard, Tinkoff Credit Systems

The news is flying a bit under the radar. But from China to Bahrain to Jamaica, central banks are beginning 2022 having made major moves recently in support of digital assets.

We covered China’s CBDC announcement earlier this week. In short, the People’s Bank of China, the country’s central bank, made its digital yuan wallet available via both the Android and Apple app stores. Select Chinese citizens in a wide range of provinces – including Shenzhen, Shanghai, and Chengdu – will be able to download the e-CNY wallet. The Chinese government hopes that there will be significant use of the technology in the weeks leading up to the Winter Olympics in Beijing, which could represent a showcase for the digital currency.

Halfway around the world, the Central Bank of Bahrain (CBB) announced that it has successfully completed its test with Onyx by JPMorgan’s JPM Coin System. The test, the first of its kind in the MENA region, enabled Bank ABC to launch real-time payments for Aluminum Bahrain (ALBA) in the U.S. JPM Coin is a permissioned system that provides payment rail and deposit account ledger services that allow participants to transfer U.S. dollars that are held on deposit with JPMorgan.

“We at the Central Bank of Bahrain are extremely pleased to announce the success of this test which aligns with our vision and strategy to continually develop and enrich the capabilities extended to the stakeholders within our financial services sector in the Kingdom using advanced and leading emerging technologies,” Central Bank of Bahrain Governor Rasheed Al Maraj said in a statement.

JPM Coin is the inaugural product offering from JPMorgan’s Onyx, a blockchain-based platform that facilitates the exchange of value, data, and digital assets. Onyx was formed in 2020.

Several hundred miles to Bahrain’s west, the Bank of Jamaica (BOJ) announced that it also has completed a cryptocurrency pilot. Here, the digital asset is a central bank digital currency (CBDC), which has been undergoing testing in the island nation for the past eight months. The project was conducted in partnership with Irish fintech eCurrency Mint, a company with a 10+ year pedigree in innovation on CBDCs. The stated goal of the initiative was to determine “whether a central bank digital currency along with the attendant technology solution could be successfully implemented in Jamaica.”

Three specific tasks were part of the test: minting of the CBDC, issuing the CBDC to wallet providers, and distributing CBDCs to retail customers. This final component of the test involved wallet provider NCB, and the successful onboarding of 57 customers who conducted person-to-person, cash-in, and cash-out transactions with small businesses as part of an NCB-sponsored event in December called “Market on the Lawn.”

In the wake of the successful test, the Bank of Jamaica has planned a national roll-out of its new CBDC in the first quarter of 2022. The roll-out will feature the continued onboarding of new and existing customers by NCB, the introduction of two additional wallet providers, and a test of transactions between customers of different participating wallet providers to establish interoperability.

Note that Jamaica’s Caribbean neighbor, the Bahamas, launched its CBDC, the Sand Dollar, in October of 2020. The Sand Dollar is the the world’s first official central bank digital currency to reach full circulation.

FinovateEurope 2022 is right around the corner. If you are an innovative fintech company with new technology to show, then there’s no better time than now and no better forum than FinovateEurope. To learn more about how to demo your latest innovation at FinovateEurope 2022 in London, March 22-23, visit our FinovateEurope hub today!

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

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Fintech in the Nordics: Innovations in Authentication and Opportunities in Acquisition

Fintech in the Nordics: Innovations in Authentication and Opportunities in Acquisition
By David Penn Posted on
Categories: Finovate Global, IDmission, MasterCard

Norway-based biometric startup Mobai won $3.16 million (EUR 2.8 million) in funding to enhance the protection of personal biometric data in coalition with Vipps BankID, Sparebank1 Østlandet, KU Leuven, and NTNU. The project, named SALT for “Secure privacy preserving Authentication using faciaL biometrics to proTect your identity,” will bring new functionalities to Mobai’s facial recognition solution, and improve the quality of the technology to help firms meet eiDAS and AML regulations.

The project will drive innovation in the field of facial biometrics, particularly in the areas of biometric template protection, face quality assessment, and presentation attack detection. Mobai CEO Brage Strand noted in a statement that innovation in facial biometrics is especially urgent insofar as vulnerabilities in current authentication strategies such as passwords and even two-factor authentication increasingly have been exploited by fraudsters and cybercriminals.

“Our aim is to offer consumers a unique opportunity to prove who they are, as a way to combat the surge in phishing and identity theft we currently experience,” Strand said. He added the goal of the project was to move “beyond comparing a photo you store on a device with a selfie” to bring the same level of trust found in ePassports “into a digital domain.” Strand also emphasized the importance of leveraging “privacy-preserving technology” to ensure GDPR compliance and the integrity of personally identifiable information.

Mobai’s partners represent an interesting cross-section of the country’s financial services industry. Sparebank1 Østlandet is the fourth largest savings bank in Norway. Vipps is a payments and electronic ID provider with more than four million electronic ID users. NTNU is the Norwegian University of Science and Technology, the largest university in the country with more than 40,000 students; Mobai was spun out of NTNU’s Norwegian Biometrics Laboratory in 2019. Katholieke Universiteit Leuven is a research and educational institution, one of the oldest universities in Europe, with a reputation for pioneering scientific research.

“We see face recognition as a very promising and effective way to add an extra layer of security that will help combat identity theft, fraud, and money laundering,” Sparebank1 Østlandet EVP for Innovation and Business Development Dag Arne Hoberg said. “Imagine a situation where you may actually sign a mortgage electronically and use a ‘selfie’ as part of this process to confirm that your are the right person to sign.”

Meanwhile, in nearby Denmark, leading business automation software and services provider Visma announced its acquisition of expense management company Acubiz. Term of the transaction were not immediately available.

Visma will integrate Acubiz’s expense management solution into its Visma Enterprise HRM, but Acubiz will continue to function as an independent brand. The company, which has a 20% market share in Denmark and more than 200,000 users, offers solutions to help businesses better manage employee and travel expenses, as well as mileage reimbursement, invoice management, and time registration.

“I am excited to welcome another strong, Danish company into the Visma family,” Visma Enterprise A/S Managing Director Monika Juul Henriksen said. “There is no doubt that Acubiz is a perfect match not only businesswise but also in their culture and DNA. Acubiz wants to be the best – and so do we. Together, we will be even better.”

Founded in 1997 by Lars de Nully, Acubiz is based in Birkerød north of Copenhagen. This year, the company has forged partnerships with accounting firms Tal & Tanker and Tietotili, as well as with financial administration services provider Fiscales, HR software company Sympa, and Jutlander Bank.

In a year-end statement published on the Acubiz blog, the company noted that, in addition to its acquisition by Visma, it plans to unveil a new financial interface in 2022. The new UI will feature upgrades in performance, user-friendliness, and the ability to customize.

“By becoming a part of Visma, we do not only get a shortcut to new customers, markets, segments, and partners, we will also benefit from the knowledge and skills within legal, HR, marketing, and sales,” Acubiz Managing Director Henrik Malling said. “Being able to counsel with these experts is immensely valuable for us as a relatively small organization. So we honestly cannot wait to get started and to get to know all our new colleagues within Visma.”

FinovateEurope 2022 is right around the corner. If you are an innovative fintech company with new technology to show, then there’s no better time than now and no better forum than FinovateEurope. To learn more about how to demo your latest innovation at FinovateEurope 2022 in London, March 22-23, visit our FinovateEurope hub today!

Here is our look at fintech innovation around the world.

Asia-Pacific

Sub-Saharan Africa

Central and Eastern Europe

Middle East and Northern Africa

Central and Southern Asia

Latin America and the Caribbean

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Mastercard Completes Acquisition of Northern European Open Banking Innovator Aiia

Mastercard Completes Acquisition of Northern European Open Banking Innovator Aiia
By David Penn Posted on
Categories: Aiia, Alumni News, Daily news, MasterCard

Leading European open banking technology company Aiia is now officially a part of Mastercard.

In a move that will bolster Mastercard’s current distribution channels, technology, data practices, and open banking strategy, the global payments and technology company announced today that its acquisition of the Copenhagen, Denmark-based company has been completed.

“Open banking empowers consumers and small businesses to use their financial data to expand access to financial services, such as demonstrating their financial wellness to increase access to credit, aggregating financial data to improve personal financial management, and to more seamlessly set up and manage payments,” Mastercard Chief Product Officer Craig Vosburg explained. “Together, we’ll continue to build up on our API connectivity and our multi-rail strategy to enable greater consumer access, control, and choice around the world.”

Aiia is the company known formerly as Nordic API Gateway, the leading open banking platform in Northern Europe. More than 40 financial institutions, as well as a number of enterprises, rely on the platform to integrate financial data and offer A2A (account-to-account) payments. Via a simple API, the solution supports a wide variety of payment services ranging from one-off, e-commerce payments to bulk payments for SMEs. The company demonstrated the technology at its Finovate debut at FinovateEurope earlier this year.

Founded in 2017, Aiia includes Danske Bank, OP Bank, Lunar, DNB, and Santander Consumer Bank among its partners. A licensed Payment Initiation Service Provider (PISP) and Account Information Service Provider (AISP), Aiia has raised more than $15 million (€13.5 million) in funding to date. This includes a $5 million investment from DNB and Danske Bank in April of last year.

“For the past decade, we have worked to build Aiia into a leading and quality-driven open banking platform, which has onboarded hundreds of banks and fintechs onto safe and secure open banking rails,” Aiia founder and CEO Rune Mai said when the acquisition news first broke in September. “We have worked closely alongside banks, customers, and local authorities to ensure that our APIs show the true effect of open banking. We’re excited to become a part of Mastercard and progress our journey of empowering people to bring their financial data and accounts into play – safely and transparently.”

Aiia is the latest fintech acquisition by Mastercard. The purchase comes a year after the completion of its acquisition of real-time financial data and insights company Finicity.

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Beyond Crypto Curious: How Apple, Mastercard, and Revolut Are Embracing Digital Assets

Beyond Crypto Curious: How Apple, Mastercard, and Revolut Are Embracing Digital Assets
By David Penn Posted on
Categories: Apple, List series, MasterCard, Revolut

Three headlines in the cryptocurrency space this week show how seriously Big Tech, Big Fintech, and the world’s largest financial services companies are taking the rise of digital assets. And while each of the three companies listed below varies in the degree to which it is embracing our increasingly crypto-friendly future, their continued interest in the space suggests that the pace of adoption of digital assets – and the proliferation of use cases – is only likely to grow in the months and years to come.

Are Cryptocurrencies Coming to ApplePay? – AppleInsider reported early this week that Apple is considering integrating cryptocurrencies into its Apple Pay solution.

The report is based largely on an interview that Apple CEO Tim Cook had with Aaron Ross Sorkin as part of the DealBook Online Summit sponsored by The New York Times. That said, those looking for a firm commitment from Apple in Cook’s conversation with Sorkin will be disappointed; while Cook expressed interest in cryptocurrencies from a “personal point of view … for awhile” and admitted that he believed that it was “reasonable to own (cryptocurrencies) as part of a diversified portfolio,” the idea of Apple accepting cryptocurrencies as payment for Apple products and services remains just that – an idea. Cook also expressed skepticism toward the notion of Apple investing in cryptocurrencies as part of a corporate investment strategy.

Apple’s relationship with cryptocurrencies has been cautious, to say the least. Back in 2014, Apple removed a number of Bitcoin wallets from its App Store, including one trading and storage app with 120,000 users, and another wallet app from Coinbase. More recently, there has been some softening of Apple’s stance, with Apple Pay VP Jennifer Bailey conceding the the company is “watching” the space and sees “interesting long-term potential” in digital currencies just a few years ago.

It’s worth noting that Apple’s reputation in technology is less as a first-mover and more that of a technology enhancer that often comes along and does a better job at innovations initiated by others. So the idea that Apple’s approach to embracing cryptocurrencies would be similarly slow-rolling is consistent with how the company has long operated. Nevertheless, Apple Pay’s fintech rivals – such as PayPal, Square, and Stripe – have been far more eager to pursue opportunities in crypto. Add to this the fact that Google Pay has teamed up with digital asset marketplace Bakkt in a deal that will enable users to spend Bakkt Card crypto funds directly from their Google Pay accounts. Together, it seems much more likely that a closer relationship between cryptocurrencies and Apple Pay is a question of “when” rather than “if.” As interest in digital currencies accelerate, and the solutions and services from these crypto-friendly fintechs become more widespread and even mainstream, it is hard to imagine Apple Pay remaining on the sidelines.

Revolut Takes Steps Toward Building a Cryptocurrency Exchange – The rumor that aspiring super app Revolut is looking to build a cryptocurrency exchange hinges largely on a job posting at LinkedIn. According to reports, Revolut wants to hire an individual with at least seven years experience in technology and in building order matching engines to lead a technical team to “architect and built Revolut Crypto Exchange.”

The crypto exchange would further establish Revolut as a leading player in the cryptocurrency space and potentially enable the company to diversify its services and create new cash flow, which could help Revolut establish another reliable revenue source going forward. The exchange news also follows reports that Revolut was looking into launching its own crypto token. And while Revolut has not commented on what it has referred to as a “mere rumor”, the report, first shared by Coindesk earlier this fall, does bolster the notion that Revolut is deepening its commitment to digital assets – a space the company has enjoined aggressively since introducing in-app cryptocurrency trading functionality in 2018.

In April of this year, Revolut added 11 new crypto tokens to its platform. The following month, the company launched its public beta for Bitcoin withdrawals. “I said before that 2021 would be the year of crypto and Revolut is here to deliver on that promise,” company Head of Crypto Edward Cooper announced in June when the company revealed that it would add Dogecoin to its current cryptocurrencies offerings for traders. “One of the most popular user requests over the past couple of months has been to add Dogecoin and we have answered the call!”

Revolut has more than 16 million customers around the world, and conducts more than 150 million transactions a month on its platform.

Mastercard Introduces Crypto-Linked Cards for the APAC Region – Also this week, Mastercard announced that it has secured partnerships with a trio of cryptocurrency companies – Amber, Bitkum, and Coinjar – who will issue crypto-funded Mastercard payment cards. The collaboration represents the first APAC-based cryptocurrency service providers (Amber and Bitkum are based in Thailand, Coinjar is headquartered in Australia) to join Mastercard’s Crypto Card Program, an initiative designed to enable companies to offer secure payment cards that meet regulatory requirements with regards to cryptocurrencies.

“Cryptocurrencies are many things to people – an investment, a disruptive technology, or a unique financial tool,” Mastercard EVP for Digital and Emerging Partnerships and New Payment Flows in the Asia Pacific region Rama Sridhar said. “As interest and attention surges from all quarters, their real-world applications are now emerging beyond the speculative. In collaboration with these partners that adhere to the same core principles that Mastercard does – that any digital currency must offer stability, regulatory compliance, and consumer protection – Mastercard is expanding what’s possible with cryptocurrencies to give people even greater choice and flexibility in how they pay.”

Mastercard’s APAC announcement comes on the heels of news that the company will enable the banks and merchants on its payment network to integrate cryptocurrency offerings into their products. The new arrangement comes courtesy of a partnership with Bakkt and will empower bitcoin wallet providers as well as issuers of credit and debit cards that offer rewards in crypto and enable digital assets to be spent. Also benefitting from Mastercard’s plan are those companies that offer loyalty programs that allow points from travel or hotel stays to be converted in to cryptocurrencies.

“Mastercard is committed to offering a wide range of payment solutions that deliver more choice, value, and impact every day,” Mastercard EVP for Digital Partnerships Sherri Haymond said. “Together with Bakkt and grounded by our principled approach to innovation, we’ll not only empower our partners to offer a dynamic mix of digital assets options, but also deliver differentiated and relevant consumer experiences.”

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Instant Payments, TED, and PIX: Open Banking Advances in Brazil

Instant Payments, TED, and PIX: Open Banking Advances in Brazil
By David Penn Posted on
Categories: Finovate Global, MasterCard, Nubank, Payoneer, VISA

This week marks the beginning of Phase 3 of Brazil’s embrace of open banking. Phase 3 is the second-to-last stage of the implementation plan set out by the Brazilian Central Bank. According to reports, Phase 3 arrives about one month late – the original date was September 30th – but the changes that the newest phase of the open banking initiative will bring are significant enough to be worth the wait.

Divided into four parts, the goal of Phase 3 is to usher in the regulation of payment initiation from any online platform. This will initially involve enabling consumers to pay for products and services using PIX – without the consumer having to use their bank’s app. PIX is the smartphone-based, instant payments technology launched by the Brazilian central bank almost a year ago. The second part of Phase 3, enabling payments made with TED (transferência eletrônica disponível) and transfers between accounts of the same bank, is set to begin in mid-February of 2022; the third part, enabling payments via bank slip, is slated to begin in late June; and the fourth and final part of Phase 3, enabling payment by debit account, is set to go live at the end of September.

Payment initiation is only one component of the open banking project Brazil has undertaken. Giving consumers the ability to make price comparisons, as well as compare rates and credit offers, are also major new possibilities for consumers that will be available thanks to the introduction of open banking in the country. These elements are expected to begin at the end of March 2022.

“The initiation will have a great impact especially on fintechs, which may offer more practical solutions for consumers or improve your internal financial processes from direct payment,” Belvo General Director Albert Morales explained. “Large banks, on the other hand, should start to rethink prices and solutions offered, both to attract new users and to retain users.”

Brazil’s open banking project, approved in 2019 by the country’s central bank, is part of a larger modernization effort for the Brazil’s entire financial system. And while the global pandemic has played a major role in complicating the project’s original timeline, officials expect open banking to be fully implemented in the country by September of next year.

Read more about Brazil’s open banking project in this interview with Otávio Damaso, Regulation Director for Brazil’s central bank, conducted by The Paypers last month. Damaso explains why Brazil has embraced open banking, and how open banking fits into the larger context of regulatory changes and trends in the country.

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

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From Affirm to Visa: The Latest from the Buy Now Pay Later Beat

From Affirm to Visa: The Latest from the Buy Now Pay Later Beat
By David Penn Posted on
Categories: Klarna, List series, Marqeta, MasterCard, PayPal, VISA

The Buy Now Pay Later (BNPL) revolution shows no signs of abating any time soon. A combination of newcomers, Buy Now Pay Later pioneers, and even credit card companies like Visa and Mastercard are figuring out new ways to integrate themselves into the biggest consumer commerce phenomenon since shopping by smartphone.

According to CNBC, which bases its analysis on data from FIS Worldpay, the Buy Now Pay Later market has an estimated value of $60 billion globally as of 2019 – though there are even higher estimates. Excluding China, this sum represents 2.6% of all e-commerce. And while BNPL represents less than 2% of sales in North America, the overall BNPL market, CNBC believes, could reach $166 billion by 2023.

Here is just a smattering of this week’s headlines from the Buy Now Pay Later beat that only underscores the velocity of the flight from credit cards and traditional consumer financing.

Stripe teams up with Klarna as BNPL competition from Square, PayPal intensifies

Klarna, a company with a long pedigree in providing consumers with alternative payment options, announced this week that it was partnering with ecommerce innovator and payments platform Stripe. The deal will enable Stripe customers in 20 countries to offer Klarna as a payment option to their customers. As part of the partnership, Klarna will use Stripe to accept payments from consumers in both the U.S. and Canada.

“Over the past years, Klarna and Stripe redefined the e-commerce experience for millions of consumers and global retailers,” Klarna Chief Technology Officer Koen Köppen said. “Together with Stripe, we will be a true growth partner for retailers of all sizes, allowing them to maximize their entrepreneurial success through our joint services. By offering convenience, flexibility, and control to even more shoppers, we create a win-win situation for both retailers and consumers alike.”

The partnership is widely seen as a way for Stripe to compete with payments rivals PayPal and Square, which have deepened their commitment to BNPL in recent months. Square agreed to acquire Australia’s Afterpay for $29 million in August. A month later, PayPal announced its $2.7 billion acquisition of Japanese Buy Now Pay Later company Paidy.

Affirm partners with American Airlines to ease cost of holiday travel

In a move well-timed to take advantage of end-of-year travel trends, American Airlines has announced a partnership with Buy Now Pay Later innovator Affirm. The collaboration will enable eligible travelers to pay for the costs of airfare over time on an installment basis, providing them with “flexibility, transparency, and control,” according to Affirm Chief Commercial Officer Silvija Martincevic. Using Affirm, travelers can pay for flights costing at least $50 with monthly installments without having to pay late fees or worry about hidden charges.

“While consumers are as eager as ever to get away,” Martincevic said, “they remain conscious of fitting travel into their budget.” Martincevic cited a survey conducted by the company that indicated that 74% of Americans queried said they would spend more on holiday travel this year “than ever before,” but that 60% were worried that they would not be able to “afford to travel as they would like to.”

The offering is currently available only to select customers, but will be expanded to include more U.S. consumers in the weeks to come. The collaboration marks the first time that American Airlines has integrated BNPL options into its website.

Marqeta and Amount announce collaboration to help banks offer BNPL

The partnership announced this week between card issuing platform Marqeta and bank technology provider Amount will make it easier for financial institutions to get into the Buy Now Pay Later business. Marqeta and Amount have forged a virtual card and loan origination partnership that will enable banks to go to market with their own BNPL/virtual card offering in months. This will help them boost revenues, grow market share, and promote loyalty.

Echoing the challenge that banks and other financial institutions face from Big Tech and fintech alike, Amount CEO Adam Hughes pointed to the partnership with Marqeta as a way for banks to close the consumer expectations gap between themselves and more tech-savvy, tech-native enterprises entering the financial services space. “Banks must compete or continue to lose market share to digital challengers who offer a more flexible way for their customers to pay,” Hughes said.

Part of what makes the Marqeta/Amount partnership interesting is how it takes advantage of research that suggests that a significant number of consumers who have used BNPL would prefer it if the service came from their bank or credit card provider. Amount’s modular approach to BNPL is configurable, easy to deploy, and integrates readily with banks’ legacy platforms, giving FIs the ability to introduce BNPL offerings over a variety of different channels and payment methods.

Berlin-based Billie banks $100 million in funding

The latest reminder of the international growth of Buy Now Pay Later comes from the $100 million investment secured by Berlin, Germany-based, B2B Buy Now Pay Later startup, Billie. The Series C round was led by U.K.-based Dawn Capital and featured participation from Tencent and, interestingly enough, Klarna. In fact, Klarna’s investment comes in the wake of a strategic partnership with Billie in which the two companies will integrate their service to better leverage their core competencies, with Billie serving business customers and Klarna handling retail consumers.

“BNPL for B2B is still in its infancy phase,” Klarna CEO and co-founder Sebastian Siemiatkowski explained, “even though the demand has never been higher. We are here to solve problems and by being able to offer this service to our merchant partners together with Billie, we are doing just that.”

The Series C round gives Billie a valuation of $640 million, and is believed to be the largest B2B Buy Now Pay Later funding round to-date. Co-founder and co-CEO of Billie, Dr. Matthias Knecht noted that those companies buying from larger businesses and individual retailers are increasingly embracing a “digital-first” approach that includes not just “modern user interfaces, high limits for shopping carts, as well as real-time decisions for B2B” but options like BNPL, as well. “There is nearly no provider of a BNPL product (for these companies) like what Klarna offers for B2C,” Knecht said. “We aim to close this gap.”

Visa expands BNPL offerings in Canada via partnership with Moneris

International card company and financial services provider Visa has been making inroads of its own into the Buy Now Pay Later market. This week, the company made headlines in the Canadian fintech news space via a new collaboration with unified commerce company Moneris.

“We’re happy to be working with a trusted brand like Visa Canada on providing a buy now pay later option to Canadians,” Moneris Chief Product and Partnership Officer Patrick Diab said. “Bringing flexible payment methods like buy now pay later to our merchants helps them offer their customers more options when it comes time to pay.”

Courtesy of the new collaboration, merchants partnered with Moneris will be able to leverage Visa’s BNPL solution – Visa Installments – to give eligible Canadian credit cardholders access to installment payments on qualifying purchases. Cardholders can use the existing credit on their cards to pay for purchases in smaller, equal payments over a defined time period, with no additional, new service sign ups or requirement to apply for a new line of credit.

Moneris is set to begin offering Visa Installments to its customers by the spring of 2022.

Photo by Karolina Grabowska from Pexels

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Mastercard Launches Touch Card to Support Visually Impaired Consumers

Mastercard Launches Touch Card to Support Visually Impaired Consumers
By David Penn Posted on
Categories: Alumni News, Daily news, Diversity in Fintech, MasterCard

Mastercard introduced its latest innovation to help ensure that visually impaired and partially sighted consumers can use its spending and credit solutions as readily as any other cardholder. The company’s Touch Card, announced this week, enables the visually impaired to easily determine whether the Mastercard they are holding is a credit, debit, or prepaid card thanks to a few simple design elements to the physical card itself.

At a time when payment cards are becoming sleeker, eschewing the boldly embossed letters and numbers that have distinguished these cards for decades, the new Touch Card features a new design that, while not bucking the trend toward flatter, thiner cards, provides the kind of tactile cues that visually impaired consumers can use to select and use the right card. With a series of notches on the side of the card – a round notch for credit cards; a broad, square-shaped notch for debit cards; and a triangular notch for prepaid cards – Mastercard’s new Touch Card is another example of what Mastercard Chief Marketing and Communications Officer Raja Rajamannar called innovation “driven by the impulse to include.”

“The Touch Card will provide a greater sense of security, inclusivity, and independence to the 2.2 billion people around the world with visual impairments,” Rajamannar said. “For the visually impaired, identifying their payment cards is a real struggle. This tactile solution allows consumers to correctly orient the card and know which payment card they are using.”

The new cards have been endorsed by The Royal National Institute of Blind People (RNIB) in the U.K. and by VISIONS/Services for the Blind and Visually Impaired in the U.S. Co-designed by augmented identity specialist IDEMIA, Mastercard’s Touch Card works with bot point-of-scale terminals and ATMs, meaning that the new solution can be readily deployed at scale.

“With one in seven people experiencing some form of disability,” Rajamannar said, “designing these products with accessibility in mind gives them equal opportunity to benefit from the ease and security of a digital world. No one should be left behind.”

It is worth mentioning that the Touch Card is only one of Mastercard’s initiatives to empower those with visual impairments. The company includes its signature melody, which signifies that card transactions have been completed successfully at the checkout counter, among these efforts.

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Mastercard, Fiserv Team Up with Bakkt to Bring Digital Assets to Loyalty Programs

Mastercard, Fiserv Team Up with Bakkt to Bring Digital Assets to Loyalty Programs
By David Penn Posted on
Categories: Daily news, Fiserv, MasterCard

A partnership between cryptocurrency exchange Bakkt and Mastercard is being heralded as a major breakthrough in bringing digital assets into the mainstream.

“Mastercard is committed to offering a wide range of payment solutions that deliver more choice, value, and impact every day,” Mastercard EVP of Digital Payments Sherri Haymond. “Together with Bakkt and grounded by our principled approach to innovation, we’ll not only empower our partners to offer a dynamic mix of digital assets options, but also deliver differentiated and relevant consumer experiences.”

The collaboration will enable Mastercard partners to leverage the company’s network and Bakkt’s trusted digital asset platform to enable consumers to buy, sell, and hold digital assets using custodial wallets powered by Bakkt’s platform. Additionally, consumers will benefit from streamlined issuance of branded crypto debit and credit cards.

Mastercard will also make cryptocurrencies a bigger part of its loyalty programs. Mastercard partners will be able to offer cryptocurrency as rewards and enable consumers to transfer value between loyalty points and digital assets. This will allow users to effectively use cryptocurrencies for everyday transactions and, perhaps even more significantly, marry cryptocurrencies to their preferred purchases.

“We’re incredibly excited to partner with Mastercard to bring crypto loyalty services to millions of consumers,” Bakkt EVP for Loyalty, Rewards, & Payments Nancy Gordon said. “As brands and merchants look to appeal to younger consumers and their transaction preferences, these new offerings represent a unique opportunity to satisfy increasing demand for crypto, payment, and rewards flexibility.”

In addition to its partnership with Mastercard, Bakkt also announced that it had entered a strategic relationship with Fiserv that will also help support mainstream adoption and use of cryptocurrencies. A major feature of the collaboration will be the integration of Bakkt into Fiserv’s Carat omnichannel ecosystem. This will enable businesses to offer both B2B and B2C cryptocurrency payouts, loyalty programs, and transactions. Fiserv and Bakkt also announced plans to introduce Bakkt technology that enables customers to store and transact with digital assets to Fiserv’s financial institution clients.

Founded in 2018 and based in Alpharetta, Georgia, Bakkt became a publicly traded company only a few days ago, launching on the New York Stock Exchange under the ticker symbol BKKT. The listing came courtesy of a SPAC sponsored by Chicago investment firm Victory Park Capital. In the weeks leading up to the company’s debut as a public company, Bakkt had announced partnerships with other Finovate alums including Finastra, Google, and, earlier this year, Blackhawk Network.

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