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Lloyds Banking, Legal & General Take Minority Stake in Open Data Innovator Moneyhub

Lloyds Banking, Legal & General Take Minority Stake in Open Data Innovator Moneyhub
By David Penn Posted on
Categories: Alumni News, Daily news, Funding, Moneyhub
  • Legal & General and Lloyds Banking Group have invested $40 million (£35 million) in open data and payments platform Moneyhub.
  • Along with the equity capital, Moneyhub received an additional $5.7 million (£5 million) debt facility courtesy of Shawbrook.
  • Moneyhub made its Finovate debut at FinovateEurope in 2015 in London. Samantha Seaton is CEO.

The $40 million (£35 million) in funding raised by open finance and payments platform Moneyhub will give minority stakes to investors Legal & General and Lloyds Banking Group. The two backers will leverage their relationship with Moneyhub to enhance their own offerings with Moneyhub’s open data technology. At the same time, the capital, along with an additional $5.7 million (£5 million) debt facility courtesy of Shawbrook, will enable Moneyhub to speed development of its products in areas ranging from pensions and payments to affordability and Data-as-a-Service. The funding will also support Moneyhub’s plans to further international expansion.

“(The) new investment helps us signal a step change in the way the financial services industry thinks about Open Data and the possibilities it presents,” Moneyhub CEO Samantha Seaton said. “Understanding and utilizing customer transaction data for the benefit of the customer’s financial wellbeing not only helps businesses fulfill their Consumer Duty regulatory obligations, but also empowers them to create further opportunities.”

Moneyhub enables companies to transform data into personalized digital experiences and initiate payments. Offering both APIs and its customizable Open Data Platform, Moneyhub serves businesses in industries from pension companies and wealth managers to banks, lenders, and insurance companies. Moneyhub boasts seamless, single source connectivity to thousands of financial institutions in 37 countries, helping ensure its clients can build a comprehensive portrait of their customers’ financial needs, habits, and goals.

Moneyhub’s largest funding round to date, this week’s capital infusion is part of a larger fundraising effort and follows a 2021 investment of $18 million led by Peter Wood, founder of Direct Line and Esure. At the time, the funding was the largest secured by a female fintech CEO in Europe that year. Moneyhub currently has more than $63 million in capital raised, according to Crunchbase.

Moneyhub made its Finovate debut in 2015 at FinovateEurope in London. Founded in 2011 and headquartered in Bristol, the company also announced this week that it was teaming up with SME health and wellness care provider MorganAsh. The support services provider will use Moneyhub’s technology to access customer financial data to enhance their ability to provide real-time consumer vulnerability assessments. The partnership will also help MorganAsh fulfill its obligations for Consumer Duty, a requirement issued by the U.K. Financial Conduct Authority in July that governs implementation of open finance/open data products.

“Consumer Duty and Open Finance herald a new era of customer-focused firms and financial resilience,” Moneyhub Business Development Director Vaughan Jenkins said. “Smart, forward-looking businesses will seize this moment and benefit from it.”

Photo by Laura Tancredi

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5 Tales from the Crypto: MoneyGram Partners with Coinme, Paxos Earns License in Singapore

5 Tales from the Crypto: MoneyGram Partners with Coinme, Paxos Earns License in Singapore
By David Penn Posted on
Categories: Coinme, Cryptocurrency, MoneyGram

MoneyGram Lets U.S. Customers Go Crypto

MoneyGram is enabling its customers in (nearly all of) the U.S. to buy, sell, and hold cryptocurrencies via their MoneyGram apps. Three cryptocurrencies – Bitcoin (BTC), Ethereum (ETH), and Litecoin (LTC) – are the digital assets available courtesy of the new service. MoneyGram expected to offer other cryptocurrencies in 2023.

“Cryptocurrencies are additive to everything we’re doing at MoneyGram,” Chairman and CEO Alex Holmes said. “From dollars to euros to yen and so on, MoneyGram enables instant access to over 120 currencies around the globe, and we see crypto and digital currencies as another input and output option.”

The new service is made possible thanks to MoneyGram’s partnership with licensed crypto exchange, crypto-as-a-service provider, and new Finovate alum Coinme. The company’s alliance with Coinme extends back to 2021, when the two firms teamed up to expand access to cryptocurrencies by establishing thousands of U.S. locations where consumers can use cash to buy and sell bitcoin.

Coinme demoed its crypto-as-a-service solution at FinovateSpring earlier this year. MoneyGram made a “strategic investment” in the Seattle, Washington-based company in January. The amount of the investment was not disclosed.

Revolut Enables Crypto Spending for Debit Card Holders

MoneyGram isn’t the only company busy making it easier for its customers to participate in the cryptocurrency market. Revolut debit card customers in both the U.K. and Switzerland will now be able to alternate between crypto and fiat purchases both online and offline.

“This year we have not only increased the number of cryptocurrencies available in the Revolut app to close to 100 tokens and launched Crypto Learn & Earn education courses enjoyed by millions of our customers,” Revolut crypto general manager Emil Urmanshin said. “Now we are making crypto even more mainstream by empowering people to use crypto-enabled cards to spend their tokens for everyday purchases.”

To enable the capability in the Revolut app, customers open the Cards section and select one of their existing physical or virtual cards. Customers then enter the card’s settings function and changes the setting from fiat to one of the nearly 100 supported cryptocurrencies. Once linked, a crypto-enabled card will process the transaction using the preferred digital asset. Revolut’s crypto-enabled cards will offer a 1% cashback on all purchases for a promotional period. Customers are also able to order a dedicated virtual or physical card specifically for crypto payments.

About That Blockchain … Lex Fridman Interviews Balaji Srinivasan

If you’re looking for something to listen to while on your drive from Los Angeles to San Francisco (and halfway back), then this 7+ hour discussion between Lex Fridman and former Coinbase CTO – and current angel investor – Balaji Srinivasan may be just what you’re looking for!

Failing that, skip ahead to 6:40:42 or so in this extended interview to listen to Srinivasan talk about the present and future of cryptocurrencies, AI, AR, and VR.

Blockchain Platform Paxos Gets Green Light in Singapore

Blockchain infrastructure platform Paxos secured a license from the Monetary Authority of Singapore this week. The license will enable the company to offer digital payment token services to companies based in Singapore. The license – made possible courtesy of the Payment Services Act of 2019 – also makes Paxos the first U.S.-based blockchain infrastructure platform to earn regulatory approval in both New York and Singapore.

Paxos Asia CEO and co-founder Rich Teo underscored the company’s commitment to “innovating within regulatory frameworks”. Teo said, “We believe blockchain and digital assets will revolutionize finance for everyone around the world, but development of this technology must have clear oversight and consumer protections.”

Paxos offers tokenization, custody, trading, and settlement of digital assets. The company builds enterprise blockchain solutions for financial institutions such as PayPal, Nubank, and Bank of America. Paxos launched the first regulated cryptocurrency exchange, itBit, in 2012. The company issued the world’s first regulated stablecoin, PAX (now known as USDP) in 2018.

Eswatini’s Central Bank to Explore CBDCs

Did you know that the country formerly called Swaziland is now “Eswatini”? If not, then consider this news that the Central Bank of Eswatini (CBE) has teamed up with Giesecke+Devrient (G+D) to research development of a Central Bank Digital Currency (CBDC), a twofer.

Located in southern Africa and bordered by Mozambique and South Africa, the Kingdom of Eswatini is one of a number of developing economies that has expressed interest in CBDCs in recent years. The country’s central bank inked an agreement with G+D this week that calls for research into the practicality of developing and implementing a CBDC in the country. The CBE will also explore the possibility of issuing digital Lilangeni to complement the country’s banknotes and coins, the dominant forms of payment among the nation of 1.2 million people.

The relationship between the bank and Munich, Germany-based G+D extends back to a time before cryptocurrencies were a significant part of the fintech conversation. G+D Currency Technology CEO Dr. Wolfram Seidemann highlighted the “long history of trusted collaboration” – of more than 40 years – between the Central Bank of Eswatini and Giesecke+Devrient. “The Kingdom of Eswatini is among the first African countries to take the step towards a retail CBDC and we are honored to support this journey towards digital public currency with our expertise,” Seidemann said.

Photo by Garrett Morrow

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Bluefin Payment Systems Acquires TECS Payment Systems

Bluefin Payment Systems Acquires TECS Payment Systems
By Julie Muhn (@julieschicktanz) Posted on
Categories: Alumni News, Alumni profile, Bluefin, Bluefin Payment Systems, Mergers & Acquisitions

Payment and data security company Bluefin Payment Systems announced it will acquire TECS Payment Systems, an omnichannel payment solutions provider.

Once the deal is finalized, Bluefin and TECS will serve a combined 34,000 merchants and close to 300 global partners in 55 countries. And for both Atlanta, Georgia-based Bluefin and Austria-based TECS, the acquisition will expand their geographical footprint.

“We are delighted to welcome TECS’ employees, customers and partners to Bluefin,” said Bluefin CEO John M. Perry. “This combination brings together two companies that focus relentlessly on meeting merchant needs for next-generation payment processing and management as well as the secure exchange of PHI and PII data with PCI-validated encryption and tokenization.”

Bluefin will leverage the purchase to offer its customers omnichannel payments and smartPOS capabilities, which will be integrated into the company’s existing payments and data security suite. TECS clients will benefit from added data security solutions, as well as additional resources for its TECS product and solution suite.

Founded in 2007, Bluefin offers encrypted and tokenized payments for point-of-sale transactions. Additionally, the company’s data security platform, ShieldConex, tokenizes payments, Personally Identifiable Information (PII), and Protected Health Information (PHI) entered online. Last month, the company appointed a new CRO to fuel its growth. And, earlier this fall, Bluefin partnered with commercial hardware manufacturer Sunmi.

Photo by Kelly Sikkema on Unsplash

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U.S. Bank Unveils Embedded Payments Solution Courtesy of Microsoft Collaboration

U.S. Bank Unveils Embedded Payments Solution Courtesy of Microsoft Collaboration
By David Penn Posted on
Categories: Alumni News, Daily news, US Bank
  • U.S. Bank launched a new suite of embedded payments solutions within Microsoft Dynamics 365.
  • The collaboration embeds U.S. Bank payment capabilities across Microsoft platforms.
  • U.S. Bank said it plans to embed additional payment capabilities within platforms such as Microsoft Teams and Microsoft Power Platform.

U.S. Bank’s collaboration with Microsoft announced earlier this year has borne fruit: the bank has introduced a new suite of embedded payments solutions within Microsoft Dynamics 365. The integration embeds U.S. Bank payment capabilities across Microsoft platforms. It also makes U.S. Bank among the first financial institutions to take advantage of the opportunity of directly integrating into the popular enterprise resource planning (ERP) and finance solution.

Among the solutions available to businesses using Microsoft Dynamics 365 is the U.S. Bank AP Optimizer. Available directly from their business application, the technology gives treasury management teams the ability to automate invoice processing for both business and consumer payment disbursement within Microsoft Dynamics 365. This will facilitate automated accounts payable workflows, including matching and reconciliation.

“We are committed to meeting clients wherever they are in their digital journey, bringing payments to businesses in a way that’s instant, embedded and connected to the technology they use every day,” U.S. Bank vice chair and head of Payment Services Shailesh Kotwal said. “Our integration with Microsoft – which businesses rely on daily to serve their customers – opens new possibilities for U.S. Bank clients to improve efficiencies and enable faster payments.”

According to U.S. Bank, this week’s news is only the beginning. The bank announced that it has plans to embed additional payment tools within Microsoft platforms such as Microsoft Teams and Microsoft Power Platform.

“Embedded payments can deliver powerful, new ways for businesses to streamline processes, enhance visibility, deliver better experiences, and reduce risk,” Microsoft Corporate Vice President for Worldwide Financial Services Bill Borden said. “We are excited to build on our work with U.S. Bank, delivering integrated, easy-to-use digital payments capabilities to our customers through Microsoft Dynamics 365 with additional embedded solutions to come.”

The two companies have been working together closely since February, when U.S. Bank announced a “substantial investment” in the modernization of its technology by choosing Microsoft Azure at its primary cloud provider for applications. The move will give customers more tools and more options when it comes to accessing banking services and provides U.S. Bank with opportunities to grow via new partnerships and what the bank sees as an “ever-evolving financial services marketplace.”

U.S. Bank’s collaboration news comes just one month after the bank introduced a new cash flow prediction tool for small businesses. The solution gives SME owners a 90-day forecast of cash flow and enables them to factor in external client data along with data from their own U.S. Bank accounts to provide more comprehensive cash flow insights.

U.S. Bank most recently demoed its technology last September at FinovateFall 2021. At the conference, the Minneapolis, Minnesota-based bank demoed its Card-as-a-Service (CaaS) solution. The offering enables fintechs, partners, and clients to digitally extend corporate credit, and to leverage API integration to create a custom virtual payment experience in their own ecosystem. Spending limits, tokenization, and encryption are all features of U.S. Bank’s CaaS solution.

Photo by Karolina Grabowska

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Amazon Taps Parafin for Merchant Cash Advance Program

Amazon Taps Parafin for Merchant Cash Advance Program
By Julie Muhn (@julieschicktanz) Posted on
Categories: Amazon.com, Daily news
  • Amazon is launching a merchant cash advance tool in partnership with Parafin.
  • The cash advance ties repayment to a percentage of the Amazon seller’s Gross Merchandise Sales (GMS).
  • The program launches today for select U.S. businesses, and it will be available more broadly by early 2023.

Right on the heels of launching its own insurance marketplace, Amazon is taking another step into the fintech realm. This time the online retailer is taking aim at small business financing, unveiling a financing tool for sellers on its own platform via a partnership with Parafin, a fintech that offers a merchant capital-as-a-service for online marketplaces.

Leveraging Parafin’s technology, Amazon is launching a merchant cash advance tool that offers eligible Amazon sellers a cash advance that ties repayment to a percentage of sellers’ Gross Merchandise Sales (GMS). The service offers approved merchants capital ranging from $500 to $10 million in a matter of days, and does not limit borrowers to a fixed term, require credit checks, or charge late fees.

Because the merchant cash advance tool is based off a seller’s GMS, the financing does not work like a traditional loan. Repayment is only required when a seller makes a sale. There is no minimum payment, no interest, and no collateral required. Instead, Amazon charges merchants a fixed capital fee.

“Amazon is committed to providing convenient and flexible access to capital for our sellers, regardless of their size,” Amazon WW B2B Payments and Lending Director and General Manager Tai Koottatep. “Today’s launch is another milestone in strengthening Amazon’s commitment to sellers, and builds on the strong portfolio of financial solutions we already provide. This latest offering significantly expands sellers’ reach and capabilities, and broadens their access to capital in a flexible way—one that helps them control their cashflow, and by extension, their entire business.”

Amazon is launching the financing program to select U.S. businesses today, and it will be available to “hundreds of thousands” of eligible sellers by early 2023. To qualify, sellers must have at least three months of sales history on Amazon.

Founded in 2020 and headquartered in California, Parafin’s mission is to democratize access to growth capital. The company has raised a total of $244 million, including its most recent round of $60 million raised in August. Earlier this year, Crunchbase added Parafin to its Emerging Unicorn Board, its list of companies valued above $500 million but less than $1 billion. 

Photo by ANIRUDH on Unsplash

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4 Spooky Stats on the State of Venture Funding

4 Spooky Stats on the State of Venture Funding
By Julie Muhn (@julieschicktanz) Posted on
Categories: Julie's Column, Thought Leadership

For many in the fintech industry, there are few things as scary as the economy right now. High inflation, lowered investor and consumer confidence, and political tensions are all contributing to an uncertain future.

One of the largest impacts of this pullback in the fintech industry is seen in the drop in venture capital funding, the lifeblood of privately held companies. The lack of funding is giving startups of all sizes a shorter cash runway, which is leading to employee downsizing and increased exit activity.

We turned to CB Insights, which recently dropped its Q3 2022 State of Venture report, for some statistics that help tell the story of today’s funding environment in fintech and beyond. Here are some of the high-level takeaways:

71% drop in new unicorns in the third quarter of this year

Across the globe, there were only 25 newly minted unicorns in the third quarter of 2022. This is the lowest count since the first quarter of 2020, when the pandemic first began. It is worth noting that 14 of the 25 new unicorns are U.S. based. The total number of unicorns across the globe is now 1,192.

38% drop in fintech funding QoQ

Looking at the fintech sector specifically, fintech funding across the globe dropped to $12.9 billion. This dip– a 38% drop– marks the lowest quarterly funding amount in nine quarters. The last time fintech funding was this low was in the second quarter of 2020, when fintech funding totaled $12.2 billion.

42% drop in median deal size for late-stage rounds this year

So far in 2022, the median size of late-stage deals has totaled $29 million. This represents a 42% drop from last year’s total of $50 million. This year’s median late-stage deal size is similar to the median size of mid-stage deals, which totals $30 million. Interestingly, this median mid-stage deal size is on-par with the median mid-stage deal size of 2021, which also totaled $30 million.

56% fewer investments from top 3 investors

According to CB Insights, last quarter’s top three investors are quieter this quarter. Tiger Global Management, Gaingels, and SOSV made 109 investments this quarter. This figure is 56% lower than the number the investors made in the second quarter of this year. Notably, Tiger Global Management, which has been the number one investor in the past three quarters, did not even rank among the top 10 investors this quarter.

A bright light

Things are not all gloom and doom this Halloween. Looking at the bright side, while fintech funding is dropping, it is still above pre-pandemic levels.

As an example, in the first quarter of 2020, before the pandemic truly exploded, quarterly fintech funding totaled $11.3 billion. That’s $1 billion lower than today’s level. Going back even further, in the first quarter of 2018, quarterly fintech funding totaled $9.6 billion.

So perhaps it’s best to look at these drops as a market reset, instead of as the fintech world coming to an end.

Photo by Karolina Grabowska

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JP Morgan Chase to Create Rental Payments Platform for Tenants and Landlords

JP Morgan Chase to Create Rental Payments Platform for Tenants and Landlords
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news, JP Morgan Chase
  • JP Morgan Chase is working on a rent management tool for owners of multi-family housing buildings.
  • The new tool, called Story, will enable landlords to send invoices, receive payments, track payments, view analytics, determine rent prices, and screen potential tenants.
  • Story is currently in beta, but is expected to be released to a broad audience in 2023.

JP Morgan Chase is piloting a platform to facilitate rent payments for tenants living in multifamily housing. The new technology, called Story, is a rent management tool for multi-family property owners.

As its core functionality, Story will enable landlords to automate rent invoices and receive rent payments. As not all tenants pay rent on time or in full, Story serves as a platform to help landlords track which tenants have paid and which still owe. Additionally, the new offering will provide property owners with analytics, help them determine rent prices, and will even offer a tool to screen potential new tenants.

As for renters, Story will remind them of upcoming rent payments, offer them multiple payment options, enable autopay, track their previous rent payments, and show a copy of their lease.

The bank has not yet set a price for the tool, but indicated that it will not charge a transaction fee for ACH, debit, or credit card payments for the first year. After that, Chase clients that hold an unspecified minimum balance will receive free ACH payments.

Story, which is currently available in 15 U.S. states, will be released to a broader set of users next year.

I’m always surprised at the lack of property tech (proptech) solutions in the fintech space. During the last decade, tenants’ rent payments totaled $4.5 trillion, and this number is set to increase massively between 2020 and 2030. Aside from insurtech, proptech is one of the last frontiers of fintech to be digitized. Now that we’re seeing a large incumbent like JP Morgan get into the game, it is only a matter of time before we see competing proptech innovations from other traditional banks.

Photo by Kenny Eliason on Unsplash

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nCino Teams Up with Ashman Bank to Enhance Banking for Property SMEs

nCino Teams Up with Ashman Bank to Enhance Banking for Property SMEs
By David Penn Posted on
Categories: Alumni News, Daily news, nCino
  • FinovateEurope alum nCino announced a partnership with U.K.-based Ashman Bank.
  • The alliance will enable Ashman Bank to deploy nCino’s Bank Operating System to better serve its small businss customers in the U.K. property market.
  • nCino is a publicly traded company on the NASDAQ under the ticker NCNO. The company has a market capitalization of $3.5 billion.

A new partnership between cloud banking innovator nCino and U.K.-based Ashman Bank is designed to “transform the banking experience” for small and medium-sized businesses in the country’s property market. Ashman Bank, which was awarded its banking license earlier this year, will deploy nCino’s Bank Operating System to support its life cycle property finance solution.

“Partnering with nCino takes us one step closer to being able to transform the banking experience for property SMEs,” Ashman Bank Chief Commercial Officer Caroline Luxmore said. “nCino gives us the best and most efficient platform for us to realize our ambitions as a digital-first bank, and we believe that together we can create a meaningful change in the U.K. real estate market.”

Implementing nCino’s technology will enable Ashman Bank to offer a variety of products and services that will allow SMEs to access the financing they need to support their growth. The bank is scheduled to launch early next year and focuses on providing real estate lending solutions – ranging from commercial mortgages and buy-to-let to development and bridging finance – to “conscientious businesses”. Ashman Bank has made a point of helping businesses become more sustainable by providing them with proprietary digital tools to enable them to understand their environmental and societal impacts.

Ashman Bank is an ambitious new entrant that will provide real estate lending for conscientious businesses in the U.K.,” nCino Managing Director of EMEA, Charlie McIver said. “It is bringing an innovative approach to commercial real estate, and nCino can help the Ashman team execute, grow, and adapt as the bank expands.”

Headquartered in Wilmington, North Carolina, nCino made its Finovate debut at FinovateEurope in 2017. At the conference, the company introduced its Bank Operating System, which leverages the Salesforce platform to provide financial institutions with an end-to-end digital banking solution.

nCino began October with news that Pennsylvania-based independent community financial institution PeoplesBank went live with its Small Business Banking Solution. The bank had previously deployed nCino’s Commercial Banking Solution, and recognizes the new technology as a way to better serve its small business clients. “Our industry is rapidly changing and we’re very proud of our ability to better support small business owners in our community with premier technology offerings,” PeoplesBank SVP and Chief Commercial Banking and Lending Officer Amy Doll said. “Their success relies on being agile and able to scale and, with nCino, we now provide tailored experiences that evolve with our clients as their businesses grow.”

Photo by Kristina Paukshtite

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Cinchy Lands $14.5 Million in Funding

Cinchy Lands $14.5 Million in Funding
By Julie Muhn (@julieschicktanz) Posted on
Categories: Alumni News, Cinchy, Daily news, Funding
  • Data access and control firm Cinchy received $14.5 million in funding this week.
  • The series B round was led by Forgepoint Capital and brings Cinchy’s total funding to $24.2 million.
  • As part of the investment, Forgepoint Managing Director Leo Casusol and Senior Associate Reynaldo Kirton will join Cinchy’s Board of Directors.

Cinchy, a fintech that is focused on helping firms set their data free, announced this week it received $14.5 million in a Series B funding round. This brings the Canada-based company’s total funding to $24.2 million.

Led by Forgepoint Capital, the investment brings Forgepoint’s Managing Director Leo Casusol will join Cinchy’s Board of Directors. The firm’s Senior Associate Reynaldo Kirton joins the board as an advisor. 

Cinchy was founded in 2017 to leverage data fabric to help banks access data from apps and other silos and assemble it within an easy-to-access data network. Today’s investment will help the company seize a recent spike in demand for data fabric and data mesh solutions.

“Our mission is to liberate and harness the power of data, giving it back to teams and organizations to accelerate digital transformation and growth,” said Cinchy CEO and Co-Founder Dan DeMers. “This latest round of funding helps us expand our team and release new offerings that include pre-built dataware solutions designed to help organizations instantly liberate both trapped data and siloed SaaS applications.”

Cinchy– whose clients include TD bank, Colliers International, AIS, and Natixis– has been named a Deloitte Technology Fast 50 Company to Watch and a Top Growing Canadian Company by The Globe and Mail. The company most recently demoed at FinovateFall 2021 and won best of show for its demo at FinovateFall 2019.

Photo by Neale LaSalle

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Finovate Global Pakistan: Embedded Finance, Digital Wallets, and Payment Apps

Finovate Global Pakistan: Embedded Finance, Digital Wallets, and Payment Apps
By David Penn Posted on
Categories: Finovate Global

Pakistan-based embedded finance platform Neem forged a strategic partnership with BPC this week. The first Pakistan fintech to be enabled by BPC, Neem will use the company’s SmartVista platform to power its embedded finance infrastructure.

Neem is targeting the more than 200 million consumers and 3.3 million micro, small, and medium sized enterprises (MSMEs) that are un- or underbanked in Pakistan. Founded in 2019 and headquartered in Karachi, Neem offers both a banking-as-a-service (BaaS) platform and a lending platform.

“In BPC, we have a strong technology partner with a deep understanding of the global trends and local market dynamics,” Neem co-founder Nadeem Shaikh said. “We are building our infrastructure together, firstly for Pakistan and then for the emerging markets.”

Neem’s partnership news comes a month after the company announced a strategic partnership with JS Bank. The alliance will enable Neem to leverage JS Bank’s Open Banking platform to enable Neem’s embedded finance community partners to embed payment services into their platforms. Shaikh said that the partnership takes advantage of the “core strengths” of both companies and will lower the time to market for its financial solutions as well as give un- and underbanked consumers “the trust and credibility of a Tier 1 Bank.”

Also in September, Neem announced that it had secured $2.5 million in seed funding. The investment came from local and international backers including Korean SparkLabs Fintech, Taarah Ventures, My Asia VC, Concept Vines, and Building Capital, among others. The funding will help Neem scale its operations as it pursues a license from the Securities and Exchange Commission of Pakistan (SECP) to operate as a non-banking financial company. This would enable Neem to pursue its lending businesses on its own. The company is currently running its lending operations via licensed partners.

In addition to fintech and MSMEs, Neem’s products and services are used in businesses in agriculture, e-commerce, logistics, and healthcare.

Elsewhere in Pakistan’s fintech ecosystem, payment app SadaPay announced that it was partnering with Verimatrix. The company will deploy Verimatrix XTD (Extended Threat Defense) technologies to help ensure secure transactions for its customers

“SadaPay aims to eliminate the complexity of banking and simplify money through modern technologies and an unmatched, delightful customer experience,” SadaPay CEO and founder Brandon Timinsky said. “We are excited to deploy Verimatrix’s award-winning cybersecurity solutions to safeguard our mobile apps as well as monitor and defend our endpoints against potential attacks.”

SadaPay offers payment apps that enable customers to shop online, send money, pay bills, and withdraw cash for free at any ATM in Pakistan. The company also offers a free, numberless, Mastercard debit card with in-app card controls. With Verimatrix XTD, SadaPay will be able to provide comprehensive mobile app protection including continuous monitoring of apps to identify and stop cyberthreats.

“SadaPay’s mission to help serve the unbanked through distinctly simple and fee-free services is also accompanied by a commitment to protect user information, as well as their money,” Verimatrix VP of Cybersecurity Juha Högmander said.

An American, Timinsky launched SadaPay during a visit to Asia following the acquisition of his previous U.S.-based startup. Upon traveling to Pakistan, Timinsky was struck by the opportunity he saw in the country’s sizable population of smartphone-equipped young people, a relatively unsophisticated legacy banking industry, high cellular and broadband penetration, and a government that was increasingly emphasizing the values of digitization.

SadaPay has raised $20 million in funding, including $10.7 million in seed extension funding secured this spring. The company received the funding news just one day after SadaPay won approval from the State Bank of Pakistan to offer financial services via its app.

Here is our look at fintech innovation around the world.

Middle East and Northern Africa

Central and Southern Asia

Latin America and the Caribbean

  • Mexican-based digital payments platform Clip earned a spot in Fast Company’s 2022 Brands That Matter roster in the international category.
  • The Chilean Congress has approved the Fintech Bill. The legislation – which includes the establishment of an open banking system to exchange customer data – awaits the president’s signature in order to become law.
  • Mattilda, a Mexican fintech that helps private schools manage payment collections, raised $10 million in seed funding.

Asia-Pacific

Sub-Saharan Africa

  • Uganda-based small business credit and asset financing platform Tugende secured $10 million in combined debt and equity funding.
  • African payments company Cellulant teamed up with Mastercard to enable e-commerce payments.
  • The Ecobank Fintech Challenge presented its six African fintech finalists, representing Senegal, Togo, Democratic Republic of Congo, South Africa, and Nigeria.

Central and Eastern Europe

  • Schufa, a private credit bureau based in Germany, launched its score simulator to support credit rating transparency.
  • Latvian open banking platform Nordigen teamed up with enterprise resource planning solution myCorazon ERP.
  • Worldline acquired a majority stake in Polish fintech SoftPoS.

Photo by Aa Dil

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InComm Acquires Australian Gift Card Innovator The Card Network

InComm Acquires Australian Gift Card Innovator The Card Network
By David Penn Posted on
Categories: Alumni News, Daily news, InComm, Mergers & Acquisitions
  • Incomm Payments acquired Australian gift card provider The Card Network (TCN). Terms of the deal were not disclosed.
  • The Card Network, founded in 2019, offers a wide range of multi-brand gift cards that aggregate popular consumer brands on a single card.
  • Celebrating its 30th anniversary this year, Incomm Payments made its Finovate debut in 2011 at FinovateFall in New York.

International paytech InComm Payments has acquired Australia-based gift card provider The Card Network (TCN). The acquisition will help InComm create and offer personalized gift card solutions, as well as support the growth of its brand and retail partners. Terms of the transaction were not disclosed.

Available in-store at leading retailers in Australia as well as online, TCN’s multi-brand gift cards aggregate consumer brands onto a single card, giving card recipients greater choice and flexibility. Examples of TCN’s multi-brand gift card products are the company’s The Active Card, which includes athletic and recreational brands such as Nike, Adidas, and New Balance; The Shop
Card, which features retail brands like Calvin Klein, H&M, and peteralexander; and The Baby Card, which aggregates brands like Toyworld, Kidstuff, and BabyBunting.

“TCN is a pioneer of the multi-brand gift card category with a proven record of delivering reliable products to both the gift giver and the recipient,” InComm SVP of Financial Services and Asia-Pacific Adam Brault said. “We could not be more excited to welcome TCN’s expertise and creativity to our global team.”

Founded in 2019 by Nick Sims and Richard Hewitt, TCN also provides Australian companies with gift solutions for loyalty and rewards programs, as well as B2B gifting opportunities. This week, the company announced the availability of new special edition gift cards “for the MATE that always has your back, for the STAR in your workplace, for the CHAMP that’s always up for a yarn, for the CUTIE that makes you smile, or the BESTIE you can’d do life without.” Unveiled for the winter holiday gift giving season, the new cards enable recipients to choose from more than 30 retailers on a single card. The new offering is available courtesy of a partnership with Coles Group Supermarkets, where the special edition cards can be purchased.

Headquartered in Atlanta, Georgia, InComm has been a Finovate alum since its first appearance on the Finovate stage in 2011. In the years since, the company has grown into an international payments technology provider with more than 525,000 points of retail and online distribution, and a presence in more than 30 countries. InComm has been active in both Australia and New Zealand since 2010, helping bring international brands to the region’s gift card market. Brooks Smith is CEO.

Photo by Karen Laårk Boshoff

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Three Elements of the CFPB’s Financial Data Rights Rulemaking

Three Elements of the CFPB’s Financial Data Rights Rulemaking
By Julie Muhn (@julieschicktanz) Posted on
Categories: List series, Thought Leadership

The U.S. Consumer Financial Protection Bureau (CFPB), which is tasked to protect consumers from unfair, deceptive, or abusive practices, has had a busy month. The bureau is in the headlines once again this week, this time with an update on the organization’s stance on regulating open banking and open finance.

In an address to the audience at Money20/20, CFPB Director Rohit Chopra laid out the CFPB’s proposal of requirements to protect consumers’ financial data rights. In his keynote, Chopra detailed three aspects of the CFPB’s plan, as well as the organization’s process and timeline to get there.

Requiring financial institutions to set up secure data sharing methods

Chopra said the bureau plans to require financial institutions that offer deposit accounts, credit cards, digital wallets, prepaid cards, and other transaction accounts to set up API-based data sharing. For now, it looks as if this will be limited to organizations that offer the aforementioned financial products, but Chopra made it clear that the CFPB will add the requirement in the future to those offering products not on the list, such as investing and lending.

The purpose of the rule will be to facilitate new approaches to underwriting, payment services, personal financial management, income verification, account switching, and comparison shopping. The requirement will also serve as a “jumping-off point” for a standardized approach to infrastructure allowing consumer-permissioned data sharing.

Screen-scraping is still a common practice in the U.S. and doesn’t offer customers input into which organizations use their data and how they use it. An API-first approach, like the one Chopra is suggesting, would put an end to screen scraping in financial services.

Stopping institutions from improperly restricting consumers’ access to control over their own data

The CFPB said it is looking at “a number of ways” to stop large traditional financial institutions from restricting consumers’ access to their own data. The group wants to ensure that when consumers opt to share their data, it is only used for the purpose the consumer intends.

This rule intends to target not only financial institutions themselves, which may use consumer data for marketing purposes, but also seeks to target those who use consumer data for nefarious purposes.

“While Americans are becoming numb to routine data breaches, including massive ones like the Equifax failure, we know that more needs to be done to stop this underworld from intercepting even more highly sensitive personal data,” said Chopra.

Chopra did not list specifics on how he planned to give consumers meaningful control while limiting bad actors, but he said that when a consumer gives organizations consent to use their data, the firm should not be able to exploit that data for other purposes.

Preventing excessive control or monopolization of the market

The new set of requirements will seek to limit monopolies and oligopolies present in credit reporting, card networks, core processors, and others by creating a decentralized, open system. “It’s critical that no one ‘owns’ critical infrastructure,” Chopra said.

Chopra cited Big Tech firms and incumbents as those who may set standards to rig the system in their own favor, jeopardizing an open ecosystem.

Next steps

Before these rules come into effect, the CFPB must gather a group of small firms representative of the market to provide input on our proposals. The CFPB is moving fast on this and plans to release a discussion guide for small organizations to make their voices heard this week.

After the CFPB culls input from this group, the organization will solicit input from what it is calling “fourth parties,” or intermediaries that facilitate data transfers.

Once this process is complete, the CFPB will publish a report on the input, which it will use to guide in the process of crafting a rule. The CFPB plans to publish its findings in a report in the first quarter of 2023, will issue the rule in late 2023, and will finalize the rule in 2024. The timing of the implementation relies on feedback from the small firms and intermediaries.

In other news

The news comes at an interesting time for the CFPB. The Fifth Circuit Court of Appeals ruled last week that the organization’s funding structure is unconstitutional. A panel of judges determined that the way the bureau is funded, “violates the Constitution’s structural separation of powers.”

“This isn’t an esoteric point of theory; it means the CFPB cannot do anything unless and until Congress appropriates funding for it,” said Former Deputy Assistant Attorney General James Burnham. “That’s a big deal.”

The CFPB is expected to appeal to the Fifth Circuit and then to the Supreme Court. In the meantime, however, the CFPB’s power in the Fifth Circuit region, which includes Texas, Louisiana, and Mississippi, is limited.

Photo by Polina Kovaleva

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