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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
Visa CEO and chairman Alfred Kelly announced the plan in an earnings call last week. Kelly noted that not only would Visa allow buying and selling of cryptocurrencies on its platform, but also that the company was “uniquely positioned” to do so, and to do so safely and securely.
Visa’s plan is to divide digital assets into two categories: cryptocurrencies and digital currencies. Cryptocurrencies, per Kelly, represent the “digital gold” of the digital asset market insofar as they are not typically used as a form of payment. For these assets, Visa plans to work with wallets and exchanges to allow users to buy these currencies using their Visa credentials. Visa also plans to enable users to cash out of their cryptocurrencies onto a Visa credential to make fiat-money purchases wherever Visa is accepted globally.
With regard to digital currencies, Visa defines these assets as “fiat-backed digital currencies including stablecoins and central bank digital currencies.” These assets, per Kelly, could find use cases in global commerce “much like any other fiat currency” and could run on public blockchains as additional networks much like RTP and ACH rails.
Kelly noted that Visa already has a strong relationship with 35 digital currency platforms and wallets, including BlockFi and BitPanda. These partnerships, Visa claimed, represent potentially more than 50 million Visa credentials – a significant size advantage over the company’s rivals. “And it goes without saying,” Kelly added, “to the extent a specific digital currency becomes a recognized means of exchange, there’s no reason why we cannot add it to our network, which already supports over 160 currencies today.”
Visa’s positive news on cryptocurrencies comes on the heels of the company’s announcement that its planned $5.3 billion acquisition of fintech infrastructure provider and fellow Finovate alum Plaid is now off the table. Visa is an alum of both our Finovate conferences, making its Finovate debut at FinovateSpring ten years ago, and participating in our developers conference, FinDEVr Silicon Valley, four years later in 2014.
PCI-DSS innovator PayShield announced a partnership with Visa’s Verifi, a chargeback protection suite solutions provider this week.
PayShield selected Verifi to bolster its Express Resolve chargeback prevention solution in the Asia Pacific (APAC) region. Australia-based PayShield is leveraging Verifi’s dispute management tools that offer pre-dispute management solutions for chargebacks. Specifically, Verifi offers a three-pronged approach, allowing merchants to prevent disputes, resolve disputes, and inform the parties involved.
“PayShield has invested an incredible amount of time, effort, and resources into developing and testing our unique API and we are thrilled to be able to offer our ‘Express Resolve’ product to APAC merchants in partnership with Verifi,” said PayShield CEO Daryn Griggs. “Through the PayShield and Verifi relationship, merchants benefit from a global pre-dispute coverage that enables them to identify, resolve, and respond at unmatched velocity, which in turn, delivers higher successful resolution rates and greater cost savings.”
PayShield’s implementation is a timely one, as many merchants and services have had to move their sales online. This increase in card-not-present transactions has increased the potential of fraudulent activity in online purchases. Integrating Verifi’s dispute management tools offers a holistic solution for PayShield’s merchant clients, ultimately helping them land higher win rates, reduce manual reviews, and boost profits.
Founded in 2005, Verifi was acquired by Visa in 2019 for an undisclosed amount. Today’s deal marks Verifi’s first Australia-based partnership. “Extending global coverage by creating meaningful relationships with partners is important for us to enable sellers and issuers to benefit from pre-dispute solutions and evolve the chargeback process to enhance the cardholder experience,” said Verifi CEO Matthew Katz.
It looks like the Biden transition team aren’t the only ones being told to slow their roll by the Trump administration: the U.S. Department of Justice has filed a civil antitrust lawsuit to block Visa’s ability to acquire innovative fintech – and Finovate alum – Plaid.
“American consumers and business owners increasingly buy and sell goods and services online, and Visa – a monopolist in online debit services – has extracted billions of dollars from those transactions,” Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division said. “Now, Visa is attempting to acquire Plaid, a nascent competitor developing a disruptive, lower-cost option for online debit payments. If allowed to proceed, the acquisition would deprive American merchants and consumers of this innovative alternative to Visa and increase entry barriers for future innovators.”
The move by the Justice Department was anticipated. An investigation into the acquisition was launched in late October, after the department spent a year examining how the deal would impact the financial services market more broadly. And in its statement, the Department has concluded not only that the impact would not be good, but also that Visa’s motives for the acquisition are problematic, as well. DOJ accuses Visa of purchasing the fintech company as an “insurance policy” to defend its U.S. debit business. The statement indicates that Visa feared that, either by itself or in partnership with a competitor, failure to deal with the “threat” of Plaid could result in “potential downside risks of $300 million to $500 million” in its debit business.
Visa’s criticism of the lawsuit mirrors somewhat the broader critique that we often hear when politicians get involved in technology; namely, you just don’t get it. Specifically, Visa accused the government of not “understanding Plaid’s business and the highly competitive payments landscape in which Visa operates.” The company, which has 70% of the online debit transactions market compared to rival Mastercard with 25% share, added that rather than a competitor, it sees Plaid simply as a firm with complementary capabilities.
“Visa’s business faces intense competition from a variety of players,” the company’s statement read, “but Plaid is not one of them.” For its part, Plaid has not commented on the lawsuit at this point.
What are the odds of the Visa-Plaid acquisition emerging successfully from this legal challenge? While it is difficult to predict an outcome, what is catching the eye of some observers is the possibility that DOJ’s interest in Visa’s Plaid acquisition could be just the beginning. Citing language in the lawsuit that refers to Visa’s “long history” of aggressive action toward fintechs like PayPal, Bloomberg Law quoted former DOJ antitrust division attorney John Newman who said a “monopolization case” could be in the offing against Visa – even if the current case is limited to blocking the acquisition of Plaid.
Lendit Fintech announced the winners of its fourth annual Lendit Finitech Industry Awards this week. And out of the 500+ entries competing for awards in 13 different categories, Finovate alums left the stage with nearly half of them.
Taking the highest honor as Fintech Innovator of the Year was Stash. The New York-based mobile-first investment platform made its Finovate debut at FinovateFall 2017, demonstrating its Stash Retire solution. This year marks the second year in a row that Stash has picked up Lendit’s top prize in this category. Fellow Finovate alum Marqeta was among the category’s finalists.
“Our purpose at Lendit Fintech is to elevate and celebrate the achievements of others,” co-founder and CEO of Lendit Fintech Bo Brustkern explained in a statement. “This year has been a hard year for many bank and fintechs, and the many enterprises that support them. Now more than ever we need a reason to come together – even if it’s virtually – to recognize and applaud excellence in these circumstances.”
Other companies earning awards were Upstart for Top Consumer Lending Platform, PeerStreet for Top Real Estate Platform, BlockFi for Emerging Lending Platform of the Year, Orrick for Top Law Firm, and Branch for Excellence in Financial Inclusion. Two individuals were also recognized: Colin Walsh, founder and CEO of Varo Money, as Executive of the Year and Nicky Goulimis, COO and co-founder of Nova Credit, as Fintech Woman of the Year.
A number of other Finovate alums earned finalist spots in this year’s competition. Both Lending Club and SoFi competed as finalists in the Consumer Lending Platform category. And BlueVine provided a strong Finovate alum showing in the Small Business Lending Platform group.
Credit is also due to Finovate alum Mambu as a finalist (along with Stash) in the Innovations in Digital Banking category, and to both Finicity and Ocrolus, which competed in the finals of the Top Technology Service Provider category.
A new study from McKinsey & Company suggests that European fintechs are experiencing an “existential crisis” as venture capital funding plunges “from surplus to scarcity.” The report compares the 11% drop in funding for fintech worldwide in the first half of the year with Europe’s far steeper decline in fintech funding of 30% over the same time period, and puts the blame squarely on the economic and social impact of the coronavirus.
But while the report anticipates a significant contraction in European economies – 11% this year with pre-crisis levels remaining elusive until 2023 – and that fintech is “already feeling the squeeze”, the authors note that there are a variety of advantages fintech has that could enable the industry’s most innovative players to emerge successfully if not stronger on the other side of the crisis. Among the main factors are:
The fintech sector has grown over the past six years by more than 25%.
Fintechs are native to the digital realm.
Fintechs are more efficient than many other businesses: with more efficient cost structures, “organizational agility,” and significant customer loyalty.
“As more incumbents struggle to adapt, the winners will be those that quickly recognize the changed context and that are most capable of responding with clear decisions and bold actions,” the report authors note. “Many organizations, both incumbents and startups, have adapted with surprising quickness and rapid decision making through the COVID-19 crisis. This new sense of possibility and potential should inform future action.”
Speaking of Europe – and on the heels of the big news of Yandex‘s agreement to buy Russian digital bank Tinkoff for $5.5 billion earlier this week – we took a look at our favorite Russian fintechs. Check out our Baker’s Dozen of fintechs from Moscow, St. Petersburg, and more.
To learn more about fintech in Russia, here’s an overview from last December that cites an Ernst & Young study that calls the country’s fintech industry “the third most developed market in the world.” This is based on the relatively high, 80% adoption rate of fintech services in Russia, and occurs despite a relatively low participation in fintech areas like securities investment, as well as savings and financial wellness.
“Basically we went from savings books to payments over mobile phone almost overnight,” said Roman Prokhorov, the head of the association Financial Innovations, who was quoted in the study. “Therefore, our consumers are more receptive to fintech innovations, and this explains the popularity of these services.”
Here is our look at fintech around the world.
Latin America and the Caribbean
JPMorgan Chase-based Brazilian fintech FitBank Pagamentos Electronicos plans expansion to the U.S. in the first half of 2021.
TechCrunch profiles Jefa, a challenger bank that caters to women in Latin America.
IFLR looks at the role regulators in Costa Rica will play in the development of the country’s fintech industry.
Asia-Pacific
Vietnamese credit scoring technology provider for micro, small, and medium-sized businesses Kim An Group secures Series A funding.
Could Malaysia be the “world pioneer” in Islamic fintech? Malaysia Digital Economy Corporation chairman Datuk Wira Rais Hussin makes the case.
The Business Times of Singapore highlights an S&P Global Ratings report on Thai consumers pushing Thai banks to embrace fintech.
Sub-Saharan Africa
Mono, a Nigerian API fintech startup that seeks to be the “Plaid of Africa,” raises $500,000 in pre-seed funding.
Lexology reviews the current state of fintech regulation in Kenya.
Innovation consultancy Beta-I partners with Angola National Bank to build the nation’s first regulatory sandbox.
Central and Eastern Europe
German fintech Vanta teams up with Marqeta to launch its credit card for startups.
Open banking platform Raisin partners with German financial solutions broker Procheck24.
Samsung, Visa, and Solarisbank AG work together to bring Samsung Pay to Germany.
Middle East and Northern Africa
Commercial Bank of Kuwait teams up with Thales Digital Solutions to drive mobile payments.
Could Saudi Arabia top Dubai in terms of fintech funding? Arabian Business looks at the growth of fintech in the Kingdom.
PYMNTS profiles Imad Aloyoun, CEO of Jordan-based payments platform Dinarak.
Central and Southern Asia
A joint project between U.K.-based Checkout.com and Pakistan’s National Institutional Facilitation Technologies (Nift) will bring new international payment options to the Pakistan.
Pakistan’s Silk Bank announces a partnership with MasterCard to boost credit card issuance in the country.
Times of India profiles Indian fintech MoneyTap, founded by Anuj Kacker.
We talked so much about the Buy Now Pay Later (BNPL) revolution in ecommerce that we are starting to sound like a broken record (someone please explain that reference to the younger millennials in the room). But the no-interest financing strategy is quickly becoming a must-offer feature for merchants, card issuers, and other players in the ecommerce ecosystem.
This week brings news that Zip Co, a digital retail financing and payments services company based in Australia, has agreed to acquire New York based Buy Now Pay Later company QuadPay in a deal valued at $269 million. One of the biggest BNPL companies in the U.S, QuadPay will enable Zip to expand its reach to five countries (Australia, New Zealand, South Africa, the U.S., and the U.K.), a combined annualized revenue of $182 million (AU$250 million) and 3.5 million customers.
Aside from the company’s co-founders, Adam Ezra and Brad Lindenberg, Zip was the largest shareholder in QuadPay. Ezra and Lindenberg will join Zip’s global leadership team post-acquistion with the responsibility of scaling business in the U.S.
Hungry for good news on the fintech funding front? Gaze no further than Latin America where a new report from KoreFusion highlights growth in smartphone ownership, ecommerce adoption, and dissatisfactioin with banks as just a few of the reasons why Latin America’s fintech boom is ust beginning.
The study, available for free from the San Francisco, California-based consultancy, is based on a study of more than 1,000 fintechs in Argentina, Brazil, Chile, Colombia, and Mexico. In addition to a survey of the fintech landscape – finding a concentration in the payments category with lending and B2B-based fintechs coming in second and third, respectively – the report underscores other areas – such as remittances and foreign exchange – where it believe major opportunities remain.
Read more in KoreFusion’s 2020 Latam Fintech Report.
Here is our look at fintech around the world.
Central and Eastern Europe
German regtech 4Stop partners with payment service provider emerchantpay.
ACI Worldwide announces that its technology helps power 75% of real-time payments in Hungary.
German P2P lender auxmoney raises $177 million (150 million euros) in growth capital.
It seems as if cryptocurrencies are starting to capture the attention of mainstream financial services providers. This week, Visa has shown to be no exception. The payments giant recently revealed plans to use cryptocurrencies into its traditional payments network.
In a blog post announcement, Visa said it has been working with Coinbase and Fold to “provide a bridge between digital currencies and [its] existing global network of 61 million merchants.” As a result of this collaboration, more than 25 digital currency wallets across the globe have linked up with Visa to enable consumers to spend their digital currency using a Visa debit or prepaid card.
“We believe that digital currencies have the potential to extend the value of digital payments to a greater number of people and places,” Visa said in a statement. “As such, we want to help shape and support the role they play in the future of money. We look forward to sharing more with you on this work in the months that follow.”
Visa is using its crypto partnerships to position itself as the preferred network for digital currency wallets. Not only this, but the company also launched a FastTrack Program that helps fintechs integrate quickly with Visa’s network. One initiative that has resulted from the program is Visa Direct, which helps consumers convert digital currency and push the funds to their Visa credentials in real-time.
This week’s announcement builds on Visa’s long-term plans for leveraging the blockchain and alternative currencies. The company has a dedicated team that has been researching uses for the blockchain for years. Currently, the team is working on facilitating offline digital currency transactions.
San Francisco, California-based company GoodData, which demoed its Insights-Platform-as-a-Service technology at FinovateFall, has forged a strategic partnership with Visa. The collaboration includes an investment in the global analytics company (terms not disclosed) and is designed to enable Visa to offer its customers and partners better access to aggregated data and analytics.
GoodData founder and CEO Roman Stanek said that the investment both reinforced the company’s status as a leader in all-in-one data platforms, as well as bolstered GoodData’s mission to enable companies to maximize the way they use data. “Visa’s investment will allow us to increase our focus on interactive self-service analytics, user interfaces, and data visualizations, as well as expand our customer support for managing complex data governance, compliance, cybersecurity, and privacy matters,” Stanek said.
GoodData offers an integrated set of data management, analytics, and insight application development and management components that enhance operational decision-making for financial services companies and insurance agencies. Companies can connect the GoodData platform to multiple data sources in order to build their own standalone or embedded smart business apps.
Visa put the partnership in the context of finding opportunity in the middle of a crisis. “As the world faces pandemic and economic challenges, there’s no better time to invest in areas that will improve the lives of consumers and businesses,” Visa SVP and global head of Data, Security, and Identity products Melissa McSherry said. She added that the insights available via the GoodData platform will not only help Visa’s customers better meet consumer needs, but also will help firms meet them at a time “when those needs are changing fast.”
Before this week’s funding, GoodData had raised more than $115 million, with the company’s last fundraising bringing in $14.4 million in 2018. Earlier this year, GoodData announced that media CMS provider TownNews had partnered with the company to use its data analytics tools to improve revenue and audience engagement. Named one of the Coolest Business Analytics Companies in CRN’s 2020 Big Data 100 roster, GoodData also this month unveiled a new, web-based logical data model (LDM) modeler. This tool complements the company’s just-released, data source management interface to simplify data modeling when starting new data products or extending current enterprise reporting. Critically, the new LDM modeler helps data engineers and data analysts work more effectively together. GoodData co-founder and VP of Product & Marketing called this problem “the greatest challenge facing enterprises building new data products for customers.”
Payments giant Visa has teamed up with Atlanta, Georgia-based Fold to launch a co-branded debit card that offers rewards in the form of bitcoin. The partnership was announced late last week, and is the fruit of Fold’s participation in Visa’s Fintech Fast Track program.
The new debit cards are expected to be available in July. Users will get up to 10% of their cash purchases credited in Bitcoin. What’s unique about Fold’s approach with the new card is that it enables users to earn Bitcoin while spending in dollars. As Fold CEO and co-founder Will Reeves explained, by spending in dollars and accumulating Bitcoin rather than spending it, users avoid the potential tax implications of selling the digital asset.
This new initiative extends Fold’s business beyond enabling shoppers to buy dollar-denominated gift cards from popular brands like Amazon, Uber, and Starbucks with Bitcoin. Made available on an “early access” basis last fall, the Fold app also gives consumers 20% cashback in bitcoin on all purchases, fiat or crypto.
“We’re changing the fact that rewards points are issued in the form of restricted airline miles, arbitrary points, or depreciating fiat, instead of the best performing asset of the last decade: bitcoin,” Reeves wrote on the company blog back in September. “But unlike existing rewards that require users to give up their privacy for points, Fold’s new app rewards users for shopping privately.”
The partnership is a second bite at the bitcoin apple for Visa. A year ago Visa and cryptocurrency exchange Coinbaseintroduced a Visa debit card in the U.K. The contactless card syncs with the user’s Coinbase account and, for a fee of approximately 2.5%, enables users to make purchases in fiat currency and have the responding amount of the cryptocurrency debited from whichever cryptocurrency account the users selects.
Fold was founded in 2014. The company has raised $3.3 million in funding, and includes Craft Ventures, CoinShares, Slow Ventures, Goldcrest Capital, and Fulgur Ventures among its investors.
Financial institutions leveraging Visa APIs can now enable voice-first digital banking technology from Clinc. Courtesy of a newly-announced partnership between Visa and the conversational AI innovator, customers of participating banks and credit unions will be able conduct a wide variety of banking operations by communicating directly with their bank accounts using natural, conversational language. No special keywords, phrases, or scripted questions.
“Our goal has always remained the same – to create technology that makes people’s lives easier,” Clinc co-founder and interim co-CEO Lingjia Tang explained. “Partnering with a leader like Visa is a milestone for Clinc, and this API integration is going to offer small and mid-size banks a similar experience that some of the largest banks in the world are using.”
The collaboration will allow digital banking customers to check balances, transactions, and spending history; pay bills and transfer money; as well as perform financial management functions such as creating payment plans, checking rewards programs, and disputing transactions. Customers will also be able to conduct a wide variety of card management operations ranging from turning cards on and off, reporting and reissuing lost or stolen cards, and activating new cards – all using their natural voice in a conversational way.
“This is the kind of capability and cutting-edge AI wouldn’t be otherwise be accessible without Visa, ” Tang added.
Clinc’s partnership with Visa is the latest example of how the Ann Arbor, Michigan-based company is helping banks enhance the customer experience. Founded in 2015 and making its Best of Show-winning Finovate debut a year later at FinovateFall, Clinc teamed up with Singapore’s OCBC Bank last year, helping the bank launch its voice-enabled mobile banking assistant. The company has also partnered with Turkish bank Isbank, powering one of the most widely-deployed mobile banking voice assistants, with more than six million users.
Clinc has raised $60 million in funding. The company picked up the lion’s share of that amount last spring in a $52 million Series B round.
It is hard to imagine having a better start to your week than Plaid had seven days ago when the innovative fintech (and Finovate alum) announced that it had agreed to be acquired by Visa for $5.3 billion.
But the €90 million ($100 million) raised by Swedish open banking platform Tink on Monday is nothing to sneeze at. In fact, the funding, which is the company’s largest to date, is a reminder that investment interest in (and funding for) companies dedicated to developing the infrastructure that connects consumers, banks, and the financial technologies is very much in abundance.
“Our aim is to become the preferred pan-European provider of digital banking services and to offer the technology needed for banks, fintechs, and startups to leverage the opportunities of open banking and enable them to successfully develop financial services in the future,” Tink co-founder and CEO Daniel Kjellén said in a statement.
Tink demonstrated its platform most recently at FinovateEurope 2019. For more on this year’s Finovate event in Europe kicking off next month, visit our FinovateEurope 2020 page.
Azimo, one of our earliest FinovateEurope alums, announced a pair of big changes at the top to begin the new week.
The London-based money transfer firm, founded in 2012, promoted its COO Richard Ambrose to CEO back in August, as Azimo founder Michael Kent took what TechCrunch referred to as a lateral move to become executive chairman. Today, Fintech Futures, Finovate’s sister publication, reports that the company has appointed Dora Ziambra to the post of Chief Operating Officer. Azimo also promoted its head of finance Tatiana Okhotina to the post of Chief Financial Officer.
“We’re fortunate to have the depth of talent to fill these top roles internally,” Ambrose said in a statement. “We’re lucky too that Azimo will continue to benefit from the experience and leadership of these two outstanding women.”
Here’s our weekly roundup of the latest news from our Finovate alumni:
Union Bank to leverage technology from FIS for core banking.
Italy-based CREDEM leveragingWorldline’s Payment and Liquidity Hub software CRISTAL to process Target2 payments
POS software Vend partners with Klarna to offer retailers more flexible payment options.
U.K. food retailer The Co-operative to deployACI Worldwide’s fraud management solution, ReD Shield.
A partnership between TransferGo and Currencycloud will enable the money transfer company to enter 14 new markets.
YellowDogforges reseller agreement with Annex Pro.
Bankable cozies up with Plaid to allow its bank customers to connect with their users’ bank accounts.
Ohpenappoints former Tesla marketing leader Corinne Aaron as new head of marketing.
Segmint to acquire WAND’s Product and Service Taxonomy division.
CuneXuscelebrates 2019 success with a 40% year-over-year increase in consumer reach.
Three Key Lessons We Learned from Plaid – Unless you’ve been living under a rock, you’ve probably heard that Visa is acquiring Plaid for a deal that’s worth $5.3 billion. The fact that they were so widely used at such an early stage is a testament to the quality of their code, but there are also a few key lessons to take away from their success.
ITSCREDIT’s Joao Pinto on the Digital Lending Opportunity – ITSCREDIT is a spinoff from ITSECTOR and is a fairly new player in the digital lending space. In this interview, Pinto talks to us about the digital lending opportunity, how his company fits into the current state of this fintech subsector, and what we can expect to see next.
Kasasa Enhances its Take-Back Loan – Community bank marketing expert Kasasaannounced a partnership with Carleton today in which Kasasa will integrate Carleton’s insurance and debt protection calculations into its Kasasa Loan.
Plinqit Brings Rewards-Powered Financial Literacy to First Community Bank – One day in the distant future, children will be educated in basic financial literacy as readily as they are taught algebra. Until then, solutions like Plinqit from HT Mobile Apps will be valuable tools for credit unions and community banks looking for novel ways to engage and educate their members and customers.
Credit, Data, and Cryptocurrencies: Graychain Rebrands as Credmark – The company that is bringing credit data clarity to the cryptocurrency industry is entering 2020 with a new name.
Tradeshift Lands $240 Million as it Inches Toward Profitability – The San Francisco-based company will use the investment to boost expansion efforts and gear toward a “direct path to profitability in the near future.”
Fintech, Financial Services, and the Case for 5G – Calling 5G “something banks aren’t even thinking about,” Celent SVP Dan Latimore said, “we believe the effects of 5G are going to be subtle and profound over time.”
Backbase-as-a-Service Helps Banks Leverage the Cloud to Innovate and Scale – The solution makes the company’s broad portfolio of digital banking offerings available to FIs looking to accelerate their ability to develop and offer new technologies to customers.
Also on Finovate.com
Visa to Acquire Plaid in $5.3 Billion Deal – “Today marks an important milestone for our company and for fintech,” company co-founder and CEO Zach Perret wrote on the Plaid blog earlier today. “What started with two founders building in a cramped conference room has become an incredible network that enables millions of consumers to interact with over 2,500 digital finance products.”
Not Another 2020 Trends Prediction Post (Seriously, It’s Not!) – We’re taking a look at the trends you can expect to see on stage next month at FinovateEurope. To keep things simple this year, we assessed the themes at a very high level and broke them down into three categories: the big, the little, and the trends in-between.
Singapore’s Digital Banking License Space Race Accelerates – Is there anyone out there who is NOT trying to secure a digital banking license in Singapore? The Monetary Authority of Singapore announced last week that has received 21 applications for digital bank licenses.
MogoSpend Offers Credit, Cashback, and Help Reducing Your Carbon Footprint – The new digital spending account from Canadian fintech Mogo does more than help Canadians get control of their finances. The solution also offers cardholders generous cashback rewards and a way to make a positive impact on the environment by reducing their carbon footprint.
Getsafe Expands its Insurtech to the U.K. – If your insurance company is offering you drone insurance, you know it’s not your grandmother’s insurance agency. Germany-based insurtech Getsafe does just that– and the company announced today it is expanding its home contents insurance offering (though, sadly, not its drone insurance offering) to users in the U.K.
Raisin’s New Acquisition Gives Company Access to the U.S. Market – European deposit marketplace Raisin announced today it acquired New York-based Choice Financial Solutions.
French Fintech Lydia Locks in $45 Million – TechCrunch reported this morning that French mobile payment app Lydia has raised $45 million (€40 million) in a round led by Tencent.
Visa’s Tap to Phone Brings Contactless Payments to mPOS – With Visa’sTap to Phone app arriving pre-installed on the new, enterprise grade smartphone from Samsung, a broad range of merchants will have access to yet another way to accept payments from customers.
INTL FCStone Acquires International Bank Transfer Firm – Headquartered in Germany, GIROXX offers international bank transfers and currency hedging. INTL FCStone plans to leverage this technology to expand its current client base to small-and-medium-sized enterprises (SMEs).
Updated 1/14/2020: The first big fintech acquisition of the year just crossed the headlines: Visa has agreed to acquire innovative fintech Plaid for a reported $5.3 billion in “total purchase consideration.”
“Today marks an important milestone for our company and for fintech,” company co-founder and CEO Zach Perret wrote on the Plaid blog earlier today. “What started with two founders building in a cramped conference room has become an incredible network that enables millions of consumers to interact with over 2,500 digital finance products.”
Plaid’s technology connects digital consumers with thousands of apps and services ranging from Transferwise and Betterment to Chime, Acorns, and popular payment app, Venmo. The company estimates that one in four individuals with a U.S. bank account have used Plaid to connect with thousands of developers across 11,000+ financial institutions.
Visa said the acquisition will bolster the company’s capacity to serve and reputation with fintech developers – especially when it comes to providing them with enhanced payment functionality and related value-added services. Visa also believes the acquisition will help open new business opportunities both in the U.S. and around the world.
“We are extremely excited about our acquisition of Plaid and how it enhances the growth trajectory of our business,” Visa CEO and chairman Al Kelly said. “Plaid is a leader in the fast growing fintech world with best-in-class capabilities and talent. The acquisition, combined with our many fintech efforts already underway, will position Visa to deliver even more value for developers, financial institutions, and consumers.”
Visa participated in Plaid’s Series C round in 2018, which was led by Index Ventures and Kleiner Perkins. The company raised $250 million in that funding raising effort. Plaid began the year with an acquisition of its own, purchasing account aggregation and data analytics technology provider Quovo in January of 2019. The value of that deal was not disclosed; Bloomberg reported that the sticker price for Quovo could have been as high as $200 million. Quovo, incidentally, is also a FinDEVr alum, participating in our New York developers conference in 2017.
Plaid demonstrated its technology at FinDEVrSiliconValley in 2014, demonstrating how its API for Financial Infrastructure enabled developers to leverage data quickly, efficiently, and securely power fintech applications. Headquartered in San Francisco, California and founded in 2012, Plaid had raised $310 million in funding previous to today’s announcement.
The ripples from the acquisition news are reverberating throughout the fintech community. And while some are worried about the ability of the innovative startup from San Francisco continue to drive change in the industry, others are busy heralding the news as a victory for fintech and incumbent financial services firms, alike.
Indeed, the acquisition of Plaid by Visa has put other fintechs involved in financial data on notice that they too may hear an inquiring knock on their proverbial doors. One observer on Twitter asked “Will $MA pick up Finicity now?” As of this writing, neither company has deigned to comment.
