This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.
Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
Global identity verification and authentication platform AU10TIX teamed up with ride sharing company Uber this week to make rides in certain areas a bit more safe.
Under a new program, Uber is requiring users in Mexico, Argentina, and Chile who pay for their ride in cash to scan an official identification such as their voting credentials, national ID, passport or driver’s license for verification.
“In the current business climate, more drivers and riders are wanting added reassurance for cash payment options, and we want to give them that,” said AU10TIX active deputy chairman Ron Atzmon. “Working together with Uber, we are delivering on this with AU10TIX’s identity document verification technology that provides the reliability, efficiency and scalability required to help provide peace of mind.”
AU10TIX offers document verification, identity verification, KYC, and AML tools to firms in a range of industries. The company leverages deep learning-based image processing, biometric technology, and data, to offer an autonomous solution that increases risk assessors’ confidence to shut down fraud before it occurs.
This week’s news marks a continuation of an existing relationship between the two players. Uber and AU10TIX first teamed up last year and recently expanded their partnership to electric scooters and Uber Eats.
Hinting at what’s next, AU10TIX CEO Carey O’Connor Kolaja said, “We expect this launch to set the stage for us to expand into other countries where Uber is experiencing elevated demand for cash payments.”
The topic of data is one that pulses throughout conversations in the fintech industry. No matter what sub-sector you’re working in, it’s likely you faced the challenge– or are facing the challenge– on how to manage, store, and interpret data of all types.
I recently spoke with Joe Lichtenberg, Director of Industry Marketing at InterSystems, one of our FinovateWest sponsors. During our conversation, Lichtenberg spoke about recent trends he is seeing within financial services, the technology that is driving those trends, and how data is playing a role.
Be sure to catch InterSystems’ keynote on Monday, November 23 at 2:15 pm Pacific time. In his discussion, Jeff Fried, Director of Product Management for InterSystems, will be detailing seven steps to implementing machine learning in financial services. Finovate Analyst David Penn highlighted Fried’s session earlier this fall in a post titled, Giving AI and Machine Learning the Business.
Say hello to Socure’s new CEO! Then again, you’ve probably already met.
Johnny Ayers, who co-founded the identity verification company with Sunil Madhu in 2012 and has since served as both Director of Business Development and Chief Product Officer for the New York-based firm, has been named CEO. Ayers will take over from Tom Thimot, who joined the company as CEO in the spring of 2018.
“I am extremely grateful to Tom for his commitment to expanding Socure, building the organization, and serving as a mentor over the past 2+ years,” Ayers said in a statement. “His leadership skills and wealth of experience in running technology companies have been extremely instrumental in building the phenomenal work culture and team here at Socure, while laying the groundwork for our next phase of growth.”
Socure grew significantly under Thimot’s leadership. In 2018, the company gained ISO certification for privacy and security controls, and launched its Aida (Authentic Identity Agent) bot to provide real-time validation and authentication of digital identities. Socure also forged partnerships with companies like workflow management specialist Alloy and digital banking services provider (and fellow Finovate alum) Q2. Socure was also the target of robust investment in the Thimot Era, securing $65 million in funding – more than half the company’s total capital – in the past two years alone.
“In my time as CEO, we together built a world class, diverse team, added hundreds of customers, and increased the company valuation significantly,” Thimot said in the company’s announcement. “I also had the privilege of spending a lot of time working with and mentoring Johnny. Now it is time to pass the baton. As the original co-founder, Johnny is poised to take Socure to the next level by offering the right products and penetrating the right markets so that Socure is truly built to last. I’m very excited to see what’s next.”
The leadership shift comes at an opportune time for Socure, with interest in digital identity security on the rise during the global health crisis. Socure’s predictive analytics platform leverages AI and machine learning to analyze trusted on- and offline data intelligence from a wide variety of sources – including email, phone, and Internet – to offer real-time identity verification. As Chief Product Officer, Ayers led innovation in Socure’s Socure ID+ platform, helping bring a trio of expansions – Intelligent KYC, DocV, and Sigma Synthetic Fraud – to the company’s flagship solution.
A Finovate alum since 2013, Socure now includes four of the top five U.S. banks, eight of the top ten credit card issuers, and more than 100 of the largest fintechs among its customers and partners. The company was named a “Cool Vendor” this year in the AI for Banking and Investments category by Gartner.
Another day, another opportunity for Mastercard to find itself in the fintech headlines. Last week, we highlighted a handful of Finovate alums that earned spots in Mastercard’s Start Path program. Then, yesterday, we covered news that the company had enhanced its Mastercard Track Business Payment Service to help modernize business payments. We also reported on Monday that Mastercard had earned the go-ahead from the U.S. Department of Justice to complete its big acquisition of data aggregation innovator Finicity.
Today’s Mastercard-related performance comes in more of a “Best Supporting” role as the company – along with VC firm MissionOG – announces an investment in payments facilitator-services provider Infinicept. The amount of the funding was not disclosed, but Infinicept’s co-CEO and co-founder Todd Ablowitz highlighted adding engineering talent and investments in product management and customer service as ways Infinicept plans to put the new capital to use. He also said that Infinicept is experiencing a 8x growth rate, as well.
“The opportunity in front of us is enormous, and we’re going to invest intelligently and aggressively to meet the needs of our customers,” added Deana Rich, co-founder and co-CEO of Infinicept. “Our customers need the ability to get payments up and running on their own terms, without having to do all the work themselves. While others try to lock-in customers with templated solutions, Infinicept puts software companies in control of their payments experience – and their payments future.”
Infinicept enables businesses to offer embedded payments to a wide variety of customers, including in health care management and hospitality. Infinicept’s platform offers software providers, financial institutions, marketplaces, and more a payments infrastructure that can help them generate payments revenue, onboard merchants faster, and improve the overall customer experience.
This week’s investment is the latest expression of a partnership between Mastercard and Infinicept that extends back to 2012. Infinicept is an alum of Mastercard’s Start Path accelerator, joining the program as part of the 2019 cohort. Infinicept’s first customers were Stripe and Shopify in 2011.
“Infinicept’s technology now supports acquirers and payment facilitators with the critical tools to help businesses around the world manage payments,” Mastercard EVP of Merchant Solutions and Partnerships Zahir Khoja said. “Mastercard’s technology and scale, with partners such as Infinicept, is helping our larger acquirer ecosystem support businesses around the world to accelerate growth, modernize transactions, and ensure businesses have the tools to succeed.”
Founded in 2011, Infinicept is headquartered in Denver, Colorado.
A turnkey digital bank-in-a-box that can be deployed in as little as 30 days? That’s the product of a new partnership announced this week between a pair of Finovate alums: data-driven financial wellness innovator Moven and digital banking services provider Q2.
“Working with Q2 allows banks of all sizes to accelerate their consumer facing digital offering,” Moven CEO and CRO Kesh Talwar explained. “Having a complete view of customer financial behavior, along with Moven’s data analytics, will increase contextual customer engagement. He added that better customer engagement will lead to “lower attrition rates, increased revenues and acquiring new customers digitally at a lower cost.”
Initially, the collaboration will focus on the integration of Moven’s data aggregation and savings tools with Q2’s cloud-based core processor, CorePro. This will enable them to offer banks and credit unions an instant deployment solution with real-time alerts and notifications, as well as account issuance for savings and demand deposits accounts. The offering also includes features such as instant external account verification, wishlist savings, and an emergency account.
“We are thrilled that Q2’s CorePro system was selected by Moven to power this initiative,” GM of Q2 BaaS Paul Walker said. “Now any bank can have its own Marcus or Chime in a matter of a few weeks.”
The partnership is the latest evidence of Moven’s shift toward leveraging its financial wellness and behavioral data technology and away from the direct to consumer / neobank model of years past. Fintech expert and advisor Bryan Clagett, who approached both Moven and Q2 over the summer to discuss compatibilities between the two firms, underscored the importance of this strategy. “Digital banking, as we know it, is evolving quickly,” he said “and bringing together fintechs organizations that have complementary competencies is key to the future of the financial services industry.”
Founded in 2011 and becoming a Finovate alum after its debut at FinovateEurope two years later, Moven announced a partnership with Saudi Arabia’s STC Pay this spring. The New York-based company has raised more than $47 million in funding, and includes TD Bank and SBI Group among its investors. Brett King is founder and executive chairman. In a statement, King highlighted the significance of his company’s partnership with fellow Finovate alum, Q2.
“We started as a challenger bank in the U.S. market before collaborating with banks and FIs around the world, so we understand what it takes in the post-COVID digital world to stand out,” King said. “The Q2 alliance is our first major core partnership in the U.S., and no doubt will set a steep benchmark for other providers in the space.”
Headquartered in Austin, Texas, Q2 has become one of the leaders in the embedded finance movement, offering a range of digital financial solutions for consumers, business clients, and fellow fintechs. The company won a Best of Show award at FinovateFall in September for its Partner Marketplace, an app store that is integrated within the client’s digital banking platform.
Q2 is publicly traded on the New York Stock Exchange under the ticker QTWO, and has a market capitalization of more than $5 billion. See them next week as the company returns to the Finovate stage to demo its latest technology at FinovateWest Digital.
If you’ve started online shopping for the holiday season you’ve likely seen buy now, pay later (BNPL) offerings at the checkout. And starting today, Chase cardholders have even more options to pay over time.
That’s because Chase is launching My Chase Plan, a BNPL option available to Chase credit cardholders. The new tool allows users to select a purchase of $100 or more they’ve made within the last 90 days and choose a payment duration ranging from three to 18 months.
Cardholders will not be charged interest on the purchase but they will face a monthly fee for using the service. Chase doesn’t list a range for the fee but the bank does disclose that the fee is based on the amount of the transaction selected, the number of billing periods, and “other factors.” In the example on Chase’s website, a purchase of around $587 split into six month increments incurs a monthly fee of $2.35.
“We developed My Chase Plan to provide our cardmembers with more flexibility and control of their payment options,” said Chase Card Services General Manager of Lending and Pricing Anthony Cirri. “We are thrilled to offer My Chase Plan as a tool to help cardmembers make the most of their money and pay for their purchases over time. With the holidays fast approaching, this embedded card feature can be used to pay off gifts and everyday purchases alike.”
From a business model perspective, Chase is taking a different approach than traditional BNPL players. Most BNPL companies work through merchant partners, charging the retailer a fee for each customer that makes a purchase using the BNPL technology. This offers a large incentive to the customer, since they receive more flexible purchase terms for free. Chase is coming at the equation from the other side, targeting the customer after they’ve made the purchase and charging them instead of the merchant.
Chase’s new feature is reminiscent of U.K.-based Curve’s tool that allows users to “go back in time” and switch their purchase from card-to-card. While Curve doesn’t enable users to pay over time, it does help with users who may have paid with the wrong card or need to free up some cash on a debit card by shifting a purchase to a credit card.
When is BigTech too Big? Ant Group may have the answer to that.
After anticipating its IPO and setting share prices in late October, the China-based tech giant’s plans were put on hold when Chinese regulators suspended the IPO.
At $34.5 billion, Ant’s IPO would have been the largest public offering to-date, surpassing the previous highest IPO set when oil company Saudi Aramco went public at $29.4 billion earlier this year.
So what is China’s qualm with a successful tech giant going public? The answer may lie in fintech’s favorite four-letter word: data. That’s because big fintechs such as Ant rely on data traditionally held by the Chinese government such as salary and debt levels to provide lending or credit services. Overall, the communist party is worried about losing centralized control by giving a large tech company control over valuable data.
Some also speculate that the suspended IPO was directed at Jack Ma, Ant Group’s controlling shareholder and founder of tech giant Alibaba, as a way to humble him. Just before the IPO was suspended, Ma had given a speech at a conference in which he criticized regulators and Chinese banks.
“What happened to Ant reinforces that sense that it’s really essential to show respect for party-state authority,” said Kellee S. Tsai, the dean of the School of Humanities and Social Science at the Hong Kong University of Science and Technology told the New York Times. “Capitalists have to play by the political rules of the game.”
It’s a stark contrast to the scene in the U.S., where the economy relies so heavily on large companies in key industries that the government is willing to shell out millions to bail them out. In either situation, however, Ant Group’s recent predicament has taught us that it’s important to remember who’s boss.
Mastercard has been busy this week. In addition to finalizing its acquisition of data aggregation provider Finicity, the company is also enhancing its Mastercard TrackBusiness Payment Service.
Mastercard launched its Track Business Payments Service in May of this year to help modernize the business payments experience. The overall goal of the initiative has been to provide businesses with a richer data exchange experience and greater control over payments.
Today’s launch adds account-to-account (A2A) functionality to the Track Business Payments Service. The new addition offers businesses a similar experience for A2A payments as they had with card payments. That is, businesses can exchange data with greater efficiency and facilitate payments across multiple payment rails including Real Time Payments (RTP) and the Automated Clearing House (ACH). Overall, the new tool enhances security, as it doesn’t require suppliers to share their bank account details with buyers, nor does it require buyers to store those details.
“Today, the vast majority of B2B payments are made through bank account transfers. Extending Mastercard Track Business Payment Service to support these transfers is a step on our way to building out the best and most secure B2B payment network in the world,” said Mastercard EVP of Global Commercial and B2B Solutions James Anderson. “Our commitment to supporting multiple payment rails has always been about helping customers operate more efficiently and effectively leveraging all the capabilities available in the market with as little change as possible.”
The A2A functionality is now available for Track Business Payments Service customers in the U.S. Mastercard plans to roll out the service for users in all geographies by the end of next year.
“This milestone is another step in the journey away from paper-based frustration, incomplete data, and manual reconciliation work and toward a fully digitized business payments process,” added Anderson.
It’s been a tough few weeks for Big Fintech. The Chinese government is dropping the hammer on Ant Group’s IPO. The U.S. Department of Justice is turning up its nose at Visa’sPlaid acquisition.
But, meanwhile over at Mastercard, it is quite the sunny Monday, indeed.
Why? Because the same DOJ that is giving Visa a hard time has granted rival Mastercard the all-clear to pursue its big acquisition: a $825 million deal for real-time financial data and analytics provider Finicity.
“We are pleased to have reached this milestone,” read a statement from Mastercard Monday morning. “The acquisition of Finicity accelerates our open banking strategy and strengthens our ability to offer consumers and businesses more choice in how they pay and how they simplify their lives and maximize their financial relationships.”
Announced in June, the acquisition was heralded by Mastercard as a way for the company to take advantage of global opportunities around open banking. Calling it a “strategically important space,” Mastercard President Michael Mieback said in June that Finicity shared Mastercard’s “commitment to consumer-centric data practices, ensuring consumers have a say in how and where their information should be used.”
Powering solutions from Experian Boost Quicken’s Rocket Mortgage, Finicity offers financial data APIs, credit decisioning technology and financial wellness tools to financial institutions and fintechs. Founded in 2000 and a Finovate alum since 2014, the company won API World’s Finance API of the Year award in 2016 for its TxPush-compliant real-time aggregation service, a technology Finicity unveiled at our developers conference, FinDEVr New York, that year.
In the months since the acquisition was announced, Finicity has continued to innovate and partner with banks and other FIs to help them make better use of their data. Earlier this month, Finicity finalized a data access agreement with BMO Harris Bank. Back in September, in addition to announcing the direct data agreement it forged with Charles Schwab, Finicity launched its next-generation credit decisioning solution, Finicity Lend. The new offering provides banks, lenders, and fintechs with an integrated set of open banking data services that enable borrowers to directly permission data and insights into lending decisioning processes.
“Big news!” Finicity tweeted later this morning. “This DOJ approval brings Finicity one step closer to joining the Mastercard family. It would be an understatement to say we’re excited to become part of Mastercard’s mission to improve financial health and inclusion around the globe.”
PayPal, Venmo, and American Express have partnered up this week in a move that will help deal with the awkwardness of group expenses.
The group is launchingAmexSend and Split, a tool that enables eligible American Express cardholders to split purchases with and send money to Venmo and PayPal users directly from the Amex app.
The send feature enables cardholders to send money via Amex to their friends on PayPal or Venmo. Users can make transfers in real time using their spend balance within the app or by paying with their Amex credit card balance.
With the split purchases feature, cardholders can select any pending or posted purchases to split with other PayPal or Venmo customers. Customers will receive payment as a statement credit on their Amex card.
The general terms of the money transfer and purchase splitting capabilities aren’t too compelling. Since all parties to the transaction need to be existing PayPal or Venmo users, there is not much incentive for them to conduct their P2P money transfer activities in the Amex app.
The one outstanding benefit to the new co-branded launch, however, is that when users send money and split purchases within the Amex app they can do so using their available credit. While they can also do this within PayPal and Venmo, there may be extra friction involved for the user to add their card details.
The biggest news in global fintech this week was word that the much-anticipated Ant Group IPO, an initial public offering expected to raise $34.5 billion, had been suspended on both the Shanghai and Hong Kong stock exchanges. Why? According to reports from the Wall Street Journal, Chinese President Xi Jinping himself ordered a halt to the IPO in response to criticisms about Chinese government regulators from Ant Group founder Jack Ma.
Slated to be the biggest initial public offering in history, the Ant Group offering is currently suspended indefinitely by Chinese authorities, who cited “changes in the financial technology regulatory environment” as reasons why the financial tech giant’s online lending business “would face tighter government scrutiny.”
As the Wall Street Journal tells it, the sharp rebuke from Chinese authorities is the result of long-simmering concerns about the growing strength of Ant Group, whose financial division Alipay is used by approximately 70% of the Chinese population. Ma’s comments, which came in a speech delivered in late October, sought to elevate the role of innovation rather than personality in solving the country’s financial problems. However his remarks about the way financial regulations are impeding technological development apparently infuriated Chinese officials, who moved quickly to check the country’s richest and most well-known businessman.
Other Chinese fintechs and financial services companies would be well-advised to take note. Following up on the smack-down of Ant Group, the Vice Chair of the China Banking and Insurance Regulatory Commission (CBIRC) Liang Tao warned “we need to pay close attention to the risks from internet security, data protection, and market monopoly.” Pardon the editorial interjection, but I am quite ready to forgive anyone for feeling as if one of those issues – certainly given the Ant Group news this week – seems a bit out of place among the other two.
Here is our look at fintech around the world.
Middle East and Northern Africa
Turkey’s Isbank completes second pilot cross border trade transaction using distributed ledger technology.
Ripplenames Dubai as the location of its regional headquarters.
Lebanon’s central bank announces plans to debut a national digital currency next year.
Central and Southern Asia
Digital-only YeLo Bank wins the Indian Finals of the AWS Startup Architecture Challenge of the Year 2020.
Crowdfund Insider looks at how the Indian state of Gujarat is supporting the growth of local fintechs.
Transfin founder and CEO Nikhil Arora talks with Madhusudanan R, co-founder of fintech API platform YAP on the evolution of fintech in India.
Latin America and the Caribbean
Microsoft partners with Uruguay-based dLocal to boost access to emerging markets.
Argentine online B2C travel agency Despegar to leverage its acquisition of Brazilian buy now pay later firm Koin to offer installment financing to travelers.
Brazilian fintech Nubank pledges to support financial education for black Brazilians in the wake of controversial comments by co-founder Cristina Junqueira in a recent television interview.
Asia-Pacific
Indonesian e-money institution LinkAja secures $100 million Series B led by Grab.
Nikkei Asia profiles Siam Commercial Bank subsidiary SCB Abacus, which leveraged AI to delivery the country’s first fully digital lending platform using alternative data.
A look at how fintech can enable communities in the Philippines to “navigate the new normal.”
Sub-Saharan Africa
Kuda, a digital bank based in Nigeria, secures $10 million in seed funding.
South African’s FinChatBot locks in $1.6 million in funding to fuel expansion to Europe and West Africa.
Nigeria’s Paystack announces pilot phase of its payment solution in South Africa.
Central and Eastern Europe
Elbrus Capital and Winter Capital announce investment in Russian financial marketplace, Banki.ru.
Enterprise connectivity platform Yapily to expand to Germany.
German fintech auxmoney secures investment from French bank BNP Paribas. The amount of the funding was not disclosed.
What trends are likely to drive fintech funding in 2021? Which sectors in fintech are most likely to produce the next fintech unicorn or the next big fintech IPO? What are the key factors that startups and entrepreneurs need to keep in mind when it comes to securing investment, driving growth, and developing constructive partnerships with fellow fintechs and industry incumbents?
In less than two weeks our Investor All Star Showcase at FinovateWest Digital will answer all these questions and more. Featuring five professionals involved in helping fintech startups get the capital they need, our Investor All Star Showcase is a must-attend event at a conference you won’t want to miss.
Check out our All Star Quintet below.
Joel Brightfield, Principal, SixThirty. Brightfield leads the investment activities of SixThirty, a global early stage venture capital fund and go-to-market program.
Andrew Casey, Director of Corporate Development, Fidelity Investments. Casey is involved with organic growth opportunities focused on investments and acquisitions.
Isabelle Freidheim, Co-founder and Managing Partner, Starwood VC. Freidheim is a fintech venture capital investor and repeat fintech entrepreneur. She invests in high growth fintechs in the U.S. and, previously, in Europe.
Arvind Purushotham, Global Head, Venture Investing, Citi Ventures. Purushotham leads Citi’s efforts to invest in and partner with startups as a way to bring technology-based innovation to Citi’s businesses.
Greg Shepard, Founder and CEO, BOSS Capital Partners. Shepard is an upcoming author and angel investor with a legacy of building and running sustainable growth businesses.
Moderated by Ansaf Kareem of Lightspeed Venture Partners, our Investor All Star panel at FinovateWest Digital will give you a 30,000 foot view of the critical trends in fintech going forward, as well as a look at the availability of capital in a post-COVID world.
To save your spot at our upcoming, all-digital event, November 23 through November 25, visit our FinovateWest Digital hub today. Take advantage of big savings if your register this week!
