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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
Twitter has selected eToro to provide real-time pricing data for its $Cashtags feature.
The $Cashtag will not only show real-time pricing data, it will also enable users to navigate to the eToro platform to view more information and make a trade.
The news comes about a month after Twitter CEO Elon Musk said he thinks it is possible Twitter could become “the biggest financial institution in the world.”
Social trading and investment network eToro unveiled it has partnered with Twitter. The tie-up will enable the social media platform’s $Cashtags feature to show users real-time prices for a range of stocks, crypto, and other assets.
Twitter first added pricing data on $Cashtags leveraging TradingView data late last year. However, the live pricing information was only available for select financial assets. With today’s partnership, eToro is expanding the list of assets to include more stocks, ETFs, crypto, and commodities. Moreover, Twitter users will be able to click the $Cashtag to navigate to the eToro platform, which will not only offer more information on the asset, but will also have the option to invest.
“Financial content on social media has provided education to many who have felt excluded by more traditional channels,” said eToro CEO Yoni Assia. “Twitter has become a crucial part of the retail investing community – it’s where millions of ordinary investors go every day to access financial news, share knowledge and converse. As the social investing network, eToro was built on these very principles – community, knowledge-sharing and better access to financial markets. There is power in shared knowledge and by transforming investing into a group endeavour, we can yield better results and become more successful, together.”
In piloting the launch of $Cashtag pricing data late last year, Twitter has seen widespread adoption among its users– even with the limited data. There have been more than 420 million searches for $Cashtags since the start of this year, with an average 4.7 million $Cashtag searches a day. Among the most commonly used $Cashtags are $TSLA, $SPY, and $BTC.
Today’s news comes about six months after Twitter CEO Elon Musk acquired the social media platform and declared plans to turn it into an “everything app.” At a Morgan Stanley Tech conference earlier this year, Musk specified that this vision revolved around payments. “I think it’s possible to create a very powerful finance experience,” said Musk. “Basically, I think it’s possible to become the biggest financial institution in the world, just by providing people with convenient payment options.”
Twitter’s partnership with eToro serves as the company’s first step towards becoming the “biggest financial institution in the world.” It also offers a hint into Twitter’s initial strategy when it comes to achieving that goal– as many U.S. banks have found, when it comes to rising to the top, partnerships are key.
Socure partnered with payments company Alacriti to bring identity fraud prevention to instant payments.
The partnership comes as the transition toward instant payments gains steam in the U.S.
Socure most recently demoed its digital identity verification technology at FinovateFall 2017.
Socure and Alacriti have teamed up to bring third-party and synthetic identity fraud prevention to instant payments.
The partnership will enable financial institutions to use end-to-end, turnkey, instant payment solutions with the benefit of integrated fraud prevention. This will benefit FIs using Alacriti’s Cosmos Payments Hub, which enables institutions to offer their customers modern money movement. The partnership also supports Alacriti’s Orbipay AIQ, a cloud-based machine learning-based fraud prevention solution powered by Socure’s Sigma Fraud suite. Orbipay AIQ helps FIs manage the specific fraud and risk challenges that are associated with instant payments. The technology can be used to augment existing fraud detection systems or as a standalone solution. Orbipay AIQ works for both payment rails such as The Clearing House’s RTP network, the FedNow Service, and Visa Direct. The technology is also compatible with more conventional rails like ACH and Wires.
“Our partnership with Alacriti protects financial institutions and their account holders from predatory fraudsters, improving their trust and confidence when making faster payments transactions,” Socure VP of Business Development Evan Rabinowitz said. “The joining of a comprehensive identity verification and fraud prevention platform with the Cosmos Payments Hub helps financial institutions safely deliver payments innovation quickly and with less risk to market.”
Socure made its Finovate debut in 2013 and most recently demoed its technology at FinovateFall in 2017. This year, the company teamed up with Okta to bring identity verification products to government IT solutions provider Carahsoft. Also, in March, Socure won “Best Identity Verification Solution” at the FinTech Breakthrough Awards for a second year in a row.
The company has raised more than $741 million in funding. Socure’s investors include T. Rowe Price, Accel, and Capital One Ventures. Last month, Socure announced a $95 million credit facility. J.P. Morgan, Silicon Valley Bank, and KeyBanc Capital Markets provided the financing.
“Socure is in an exceptional position to solve what organizations and government agencies need most today – accurate and inclusive real-time identity verification without costly fraud and friction within the customer experience,” Socure founder and CEO Johnny Ayers said when the credit facility was announced in March. “With this facility further strengthening our balance sheet, Socure is in a tremendous position to leave the recession much stronger than when we went into it while continuing to distance ourselves from the competition through investments in new solutions, verticals, and strategic acquisitions.”
FinovateSpring is just over a month away, on May 23 through May 25, and we’re already excited to watch the stage fill with fresh fintech demos and discussions about the hottest industry topics.
Just as fintech is a constantly changing industry, so are the conversations, advice, and relevant themes. So when we hit the networking floor next month in San Francisco, here are the top 10 topics we can’t wait to talk about with everyone:
Metaverse When it comes to the metaverse and Web 3, it seems like you’re either in or you’re out. While a handful of banks have already jumped in with two feet by purchasing real estate in the metaverse, others are dismissing it as a passing fad.
ESG ESG discussions are happening around the globe, and formal ESG reporting strategies are on the verge of becoming more than just nice to have. With proposed regulation in the U.S. and beyond, now is the time to begin paying attention to this space.
Generative AI The topic of generative AI transcends Open AI’s ChatGPT. While organizations are leveraging the technology to save costs, it still bears risk if used improperly. If you’re not a first-mover in this space, however, you certainly don’t want to be the last.
Partnerships Regardless of whether you call them bank-fintech partnerships or fintech-bank partnerships, these tie-ups matter, and they are trickier than they seem. In many cases, keeping good partners can be just as difficult as finding good partners in the first place.
Digital acceleration We may be three years past the golden age of digitization, but we’re not going back. Whether you’re a bank or a fintech, if you haven’t digitized your offerings and back-end processes, you may be left behind.
Economic outlook Last year we were worried about a pending recession. This year, we’re sweating about the impact of bank failures. Does anyone know what we’re in for next?
Decentralized finance The concept of decentralized finance (DeFi) was tarnished last year after the FTX scandal took place, and U.S. regulators have been on high alert ever since. There is more to DeFi than cryptocurrency, however, and much of the industry has yet to embrace– or even explore– the possibilities.
VC investing and fintech valuations Venture capitalists are being much more careful with their dollars these days, and many are focusing their investments on early-stage companies. But how can mid-to-late stage startups get much-needed liquidity? Many have advised focusing on unit economics, saying that companies should focus on customer lifetime value and customer acquisition cost.
Embedded finance Non-fintech and banking companies such as retailers and service providers are looking to make it as easy as possible to make a sale, and embedded finance may be the answer. Fintechs can not only help remove the friction from the checkout flow, they can remove the “checkout” all together by moving the processes into the background.
Customer experience We’ve been talking about ways to win when it comes to the customer experience for almost a decade now, so the topic can seem a bit hackneyed. There’s a reason for that, however. Customers have a broad range of needs, and because their preferences are always changing, it can be difficult for banks and fintechs to keep up with their expectations.
Don’t want to miss out on any of these discussions? Be sure to register before April 21 to save $300 on your ticket.
ID.me announced a $132 million funding round, bringing its total raised to $240 million.
The company has brought on Samantha Greenberg as CFO.
Today’s news comes a week after the company reached a major milestone– reaching 100 million registered wallets on its platform.
Digital identity network ID.meannounced it closed a $132 million funding round this week. The investment boosts the Virginia-based company’s total funding to $240 million.
Viking Global Investors led the round, which also saw participation from CapitalG, Morgan Stanley Counterpoint, FTV Capital, PSP Growth, Auctus Investment Group, Moonshots Capital, and Scout Ventures. ID.me has not specified what the funds will be used for.
Along with today’s funding announcement, ID.me also revealed it has appointed Samantha Greenberg as Chief Financial Officer. Greenberg is replacing Rachael Brinker, who was temporarily filling the CFO role after the company’s former CFO Rajat Bahri vacated the position last summer.
Greenberg brings more than 20 years of experience leading financial operations, analyzing private and public technology and consumer companies, and scaling high-growth businesses. Most recently, she served as CFO of Mint House and has also held positions at Citadel, Goldman Sachs, Paulson & Co. Greenberg, and Margate Capital Management LP– which she founded.
“We are fortunate to have Samantha join our senior leadership team, given her excellent track record in growing companies to serve their customers and business partners,” said ID.me Co-founder and CEO Blake Hall. “Her expertise will support our mission to provide our more than 100 million members with a safe and secure digital identity credential facilitating access across services, benefits, healthcare and commerce without selling their personal data. Samantha is joining our team at the right time, after we closed our Series D funding and surpassed 100 million members. These are big milestones toward our vision to streamline access to benefits and services while ensuring no identity is left behind.”
ID.me was founded in 2010 to serve as a digital identity wallet that helps users prove and share their identities online without disclosing additional personal information. The company maintains a digital identity network that includes 14 federal agencies and 500+ retail brands, all of which use ID.me to verify customers’ identities and affiliations. ID.me’s ID wallet helps users prove they belong to certain affiliated groups, such as teacher, student, first responder, or military veteran. Last week, ID.me achieved a major milestone, reaching 100 million digital wallets registered on its platform.
“Throughout our longstanding partnership, exagens has worked with Desjardins to address challenges like improving the financial wellness of their members, up-selling, cross-selling, reducing call center volume, and increasing digital engagement,” exagens President and CEO Michael Stojda said. “This most recent renewal again confirms our steadfast focus on community-based financial institutions, the strong relationship we’ve built with Desjardins and the ongoing value together we’ve provided to both Desjardins and their members over the past 8 years. We look forward to this exciting new chapter in our partnership.”
Desjardins is the largest credit union group in North America, with assets of more than $407 billion. Courtesy of its partnership with exagens, Desjardins has provided its members with contextual, personalized insights into their financial lives. The credit union’s Assistant AccèsD solution leverages exagens’ behavioral banking technology to proactively engage members across the entire digital banking experience. This level of engagement helps members save, spend, borrow, and invest in accordance with their goals. Since embarking on its partnership with exagens, Desjardins has seen 3.4x more savings per year per member, increased digital engagement, and reduced operational costs.
More recently, Desjardins has leveraged its relationship with exagens to address issues ranging from rapid deposit growth to the challenges of the COVID pandemic. Proactive engagement with members, according to Desjardins, also has helped significantly reduce call center volumes.
Founded in 2013, exagens is headquartered in Montreal, Quebec, Canada. The company made its Finovate debut in 2018 at FinovateSpring. Exagens and its solutions have earned recognition and received industry awards from EFMA, Celero, and OCTAS. Exagens was named a Cool Vendor in Banking by Gartner in 2019.
Very Good Security (VGS) has got a brand new boss. The data security and compliance platform has appointed Chuck Yu as its Chief Executive Officer.
Vertex Ventures U.S. General Partner Jonathan Heiliger, whose firm is a major investor in VGS, praised Yu’s experience in financial services. “His deep ties in the fintech and payments space will help advance VGS’ industry leadership position as the company looks to help its clients secure critical data and streamline compliance in more powerful and progressive ways,” Heiliger said. He called Yu “a transformational force.”
Yu’s background includes executive leadership roles at Visa, Point Digital Finance, and TrialPay, where he was Chief Revenue Officer. TrialPay was acquired by Visa in 2015. While at Visa, Yu led teams in business development, sales, finance, and operations. He also helped build strategic partnerships as the head of business development for Visa’s Global Fintech team.
In a statement, Yu underscored VGS’s goal of being a powerful steward “of the world’s sensitive data.” He added, “I am eager to work closely with our talented team to forge new strategic partnerships with industry leaders, and deeper relationships with the top brands that have chosen to trust us with their critical financial data.”
In its Finovate debut last spring, VGS demonstrated its VGS Zero Data Platform. The technology collects sensitive data from end users and conducts operations on the data – including exchanging it with third parties. The platform accomplishes this without allowing the original data to come in contact with your network. This allows companies to extract business value from sensitive data without touching it. As such, by enabling businesses to “offload” their data security burdens, Very Good Security allows these companies to focus on delivering innovative solutions to their customers.
Very Good Security has raised more than $104 million in funding. The firm’s investors include Vertex Ventures, Visa Ventures, Andreessen Horowitz, and Goldman Sachs Merchant Banking Division. Headquartered in San Francisco, California, VGS was founded in 2015.
Digital banking provider Bankjoy announced an integration with Fiserv Portico, a full-service account processing system.
The integration will enable credit unions working with Fiserv Portico to offer their members an online and mobile banking experience with a modern, intuitive UX.
Headquartered in Detroit, Michigan, Bankjoy most recently demoed its technology at FinovateFall 2022.
Michigan-based digital banking provider Bankjoy has integrated with Fiserv Portico, a full-service account processing system. The integration will enable credit unions using Fiserv Portico to offer an online and mobile banking experience that will attract new members and deepen current member engagement.
“Investing in a truly cutting-edge digital banking solution can seem out-of-reach for institutions without extensive engineering resources and IT budgets,” Bankjoy CEO Michael Duncan said. “Our integration with Fiserv Portico aims to solve this by giving credit unions more flexibility to roll out the digital banking features that today’s members expect in the most efficient and cost-effective way possible.”
Founded in 2015 and built by credit union executives, Bankjoy gives credit unions the ability to offer a wide range of contemporary banking services. These services include both mobile and online banking, e-statements, online account opening, online loan origination, conversational AI, and more.
“Ongoing digital transformation over the last decade has accelerated the need for financial institutions of all sizes to deliver a state-of-the-art digital banking experience,” Duncan said. “Their success as an institution depends on this.” He added that, according to research from McKinsey & Company, the top performing financial institutions receive an average of 24-28 digital banking log-ins per account holder every month. These digital banking customers are driving revenue growth by an average of 10% to 15% each year.
Bankjoy most recently demoed its technology at FinovateFall 2022 in New York. At the conference, the company showed how its Business Banking Platform provides SMEs with a single portal for multiple business accounts, and enables them to manage multiple users, control permissions, send transfers to multiple recipients, and more.
In addition to the company’s integration with Fiserv Portico, Bankjoy has also secured out-of-the-box integrations with third-party partners ranging from Allied Payments and Savvy Money to Vertifi and UrbanFT. This week’s integration news comes a month after Bankjoy announced securing new funding in a round led by Curql Collective. Terms of the investment were not disclosed. Duncan said that the capital will help the company “help more community financial institutions thrive in an increasingly competitive environment.”
Visa is launching Visa+, a peer-to-peer payments interoperability tool.
PayPal and Venmo are piloting the launch.
Visa partners DailyPay, i2c, TabaPay, and Western Union will also integrate Visa+ within their platforms.
Fintech has solved a lot of problems by creating a multitude of different peer-to-peer (P2P) payment apps. In so doing, however, it has also created a problem– the platforms are not interoperable. Many people use different payment apps, and they don’t all work together. Visa is seeking to solve this issue with its new launch, Visa+, which helps users move money between different P2P payment apps.
Piloting the launch of Visa+ are PayPal and Venmo. After setting up a personalized payment address linked to their Venmo or PayPal account, users of either app can send and receive payments between the two platforms. Visa+ serves as the backend infrastructure behind the transfer.
PayPal and Venmo users will be able to begin using Visa+ later this year. Visa partners DailyPay, i2c, TabaPay, and Western Union will also integrate Visa+ within their platforms. The addition of new apps and platforms will not only increase the reach of Visa+, but it will also have the potential to add new use cases– such as payouts for gig workers, creators, and online marketplace sellers.
“Consumers continue to seek simple and seamless ways to digitally move money between friends and family, including the ability to send money between different payment platforms,” said Visa Global Head of New Payment Flows Chris Newkirk. “We are thrilled to partner with like-minded innovators to broaden the reach of P2P payments across platforms. Through this collaboration, Visa+ can help break down barriers for payment app users as they connect, engage and move money.”
While PayPal and Venmo are as good a starting point as any for P2P payments interoperability, there are many other players– Square Cash, Zelle, Google Wallet, and Apple Wallet– that should be added to maximize the utility of Visa+ and make it an everyday tool for U.S. users. Visa expects to launch Visa+ with select partners in late 2023. The company is planning general availability in mid-2024, so we may see additional partners in the later launch.
Axle raised $4 million in a Seed round led by Gradient Ventures.
Today’s investment brings the Atlanta, Georgia-based company’s total funding to $4.5 million.
Axle is bringing consumer permissioned data to the insurance vertical.
Consumer permissioned insurance data company Axle has raised $4 million this week for a tool it calls “the Plaid for insurance.” The Seed round brings the Atlanta, Georgia-based company’s total funding to $4.5 million.
Gradient Ventures led the round, which also saw contributions from existing investor Y Combinator, Soma Capital, Contrary Capital, Rebel Fund, BLH Ventures, and others.
“Axle’s innovative approach to insurance and commitment to a personalized customer experience has already demonstrated early traction and validates their potential to make a significant impact in the market,” said Gradient Ventures Partner Wen-wen Lam. “We look forward to supporting the team and their mission to democratize access to insurance data.”
Axle was founded in 2022 to offer a universal API that allows individuals to connect their insurance account to companies seeking to verify their insurance. The tool enables rental car companies, lenders, and gig services to quickly obtain proof-of-insurance, as long as they have permission from the end user.
“We plan to use the funds to grow our team, enabling us to service new and existing demand from our fast-growing list of customers, strengthen our carrier network, and expand into new markets,” the company said in a blog post.
The company’s current carrier network includes hundreds of insurance carriers and supports policy information including term, insureds, premiums, third parties, and more.
Consumer permissioned data is widely used across the financial services industry– from credit scoring to payment processing and personalized marketing. Plaid— the company to which Axle is comparing itself– may be the most well-known fintechs facilitating consumer permissioned data. The California-based company uses consumer permissioned data to facilitate the data exchange between financial institutions and third-party applications.
Cardstream is launching PayFac-as-a-Service, a new white label service for companies seeking to become payment facilitators.
PayFac-as-a-Service clients will benefit from Cardstream’s regulatory position, enabling customers without a license to operate compliantly.
Cardstream has built a network of 400+ acquirers, alternative payment methods, shopping cart platforms, and fraud providers.
European payment service provider Cardstream announced the launch of new white label PayFac-as-a-Service.
The cloud-based service will offer acquirers access to Cardstream’s third party payment facilitator program and provides a pathway for those looking to become a payment facilitator. PayFac-as-a-Service users will also benefit from Cardstream’s regulatory position, as customers without a license will be able to operate compliantly.
“Our complete PayFac-as-a-Service is the quickest and most versatile way for companies to enter the rapidly growing billion dollar global marketplace,” said Cardstream CEO and Chairman Adam Sharpe. “Any company keen to capitalize on the rapidly growing PayFac space should put us on its shortlist, be it an Acquirer; a company applying for its own PayFac regulatory approval; or one opting to benefit by operating under our FCA regulated OBN.”
PayFac-as-a-Service offers merchants a holistic approach to the payment facilitator market. Cardstream is including workflow onboarding, underwriting, compliance due-diligence, real-time fraud screening and monitoring, dispute and chargeback management, funds management, automated fee collection, invoicing, referral commissioning, and more.
Founded in 1999, Cardstream has built a network of 400+ acquirers, alternative payment methods, shopping cart platforms, and fraud providers. The company supports all global currencies and major card schemes in more than 120 countries. Cardstream’s client portfolio includes 100+ reseller partners and their 18,000+ merchants.
In today’s announcement, Sharpe hinted at ambitions to grow Cardstream, sharing plans to round out its platform with additional services later this year. “As we move through the rest of 2023, we expect to have a series of further announcements of many new, additional Cardstream Group services,” he added.
The payment facilitator market in Europe is heavily regulated, with the introduction of the second Payment Services Directive (PSD2) in 2018, which aims to increase security, competition, and innovation in the payments industry. The market, which is expected to reach a value of $1.72 trillion (€1.57 trillion) by 2024, includes a sizable number of players ranging from traditional financial institutions to fintech companies and digital payment providers. Among the top payment facilitators in Europe are PayPal, Adyen, Stripe, Worldpay, and Klarna.
Canadian Crypto Combo: A trio of Canada-based cryptocurrency exchanges announced plans to merge into a single entity. Vancouver-based WonderFi, along with Toronto-based Coinsquare and Coin Smart Financial, are the firms involved. Together, they represent more than $600 million CAD in assets under custody and more than 1.65 million users. The merger will create what the companies are calling “Canada’s largest regulated crypto asset trading platform.”
The road to the three-way union had its complications. At one point, Coinsquare had been poised to acquire CoinSmart. At another point, a merger with WonderFi was allegedly on the table. CoinSmart had been both cold and hot to an acquisition by Coinsquare and reportedly was prepared to seek monetary damages in court when the acquisition deal did not work out. But those days are gone, and the three companies have decided they are better off serving cryptocurrency customers together than they are on their own.
UAE and ANZ Get Busy with CBDCs: There have been a few CBDC-oriented stories in fintech and crypto headlines in recent days. First up is news that the UAE has selected technology and legal partners ahead of the launch of its CBDC strategy. The country’s central bank has picked Clifford Chance to provide legal oversight. R3 and G42 Cloud will serve as technology and infrastructure providers. This will enable the central bank to begin Phase 1 of its CBDC project. This initial phase has three components: initiating real-value cross-border CBDC transactions for international trade settlement, proof-of-concept work for bilateral CBDC bridges with India, and proof-of-concept work for domestic CBDC issuance covering wholesale and retail use. Phase 1 is expected to take place over the next 12 to 15 months.
Meanwhile in Australia, ANZ bank reported that it had concluded one of its projects in the country’s CBDC trials. The project involved using the ANZ stablecoin to settle tokenized carbon credit transactions. ANZ Bank is involved in four of the 15 use cases and projects in the country’s CBDC pilot. With regard to this specific use case – applying tokenization to the carbon markets – ANZ Banking Services Lead Nigel Dobson expressed optimism. He highlighted the potential to improve both efficiency and transparency, as well as “preserve the unique characteristics of underlying projects to incentivize investment in climate solutions.”
Speaking of the relationship between crypto and the climate, SEB and Crédit Agricole announced this week that they are jointly launching so|bond, a sustainable and open platform for digital bonds built on blockchain technology. The platform enables issuers in capital markets to issue digital bonds onto a blockchain network in an effort to enhance efficiency and support real-time data synchronization between participants. Additionally, the network is using a validation protocol, Proof of Climate awaReness, that encourages participants to minimize their carbon footprint.
“Crédit Agricole CIB is proud to contribute to the emerging market of digital assets,” Crédit Agricole CIB Head of Innovation and Digital Transformation Romaric Rollet said. “The platform’s innovative approach, both to the blockchain infrastructure and to the securities market, is coupled with the strong commitment to green and sustainable finance that is at the center of our Societal Project.”
And while on the topic of the blockchain use cases, we report that Acre, a blockchain-based mortgage platform, has raised $8.1 million (£6.5 million). The fundraising is the second major capital infusion for the London-based company and brings the firm’s total equity funding to $14.3 million (£14.3 million). The round was led by McPike, an investor in Starling Bank, as well as Aviva and Founders Factory.
Acre helps traditional brokers compete with their digital counterparts by using blockchain technology to enhance the mortgage and insurance application process for advisers. The company’s technology brings together all aspects of the process into a single “record of the transaction.” This, according to Acre founder and CEO Justus Brown, helps brokers deliver “speedy, efficient advice that meets the individual requirements of each case in a dynamic market.”
Acre was founded in 2017. Brown reports that the company grew by 10x in 2022, and processes £10 billion in annual mortgage volume. In the wake of the latest investment, Acre will focus on forging new partnerships with lenders and insurers to enable brokers to recommend the most competitive financial products and services for their clients.
Coinbase Announces Derivatives Exchange Upgrade: Last up for this edition of 5 Tales from the Crypto is news from one of the industry’s banner companies, Coinbase. The firm announced this week that it had partnered with Transaction Network Services (TNS). The partnership is designed to enable faster, more efficient transactions on its derivatives exchange (CDE).
“Crypto has witnessed both volatile and liquid markets, and with institutional adoption remaining strong, we believe the time is right for the offering that TNS brings to the table,” Coinbase Derivatives Exchange CEO Boris Ilyevsky said. “Dedicated cloud infrastructure connectivity coupled with our derivatives exchange represents a mission-critical step toward supporting and maintaining a vibrant and reliable crypto derivatives market.”
Coinbase launched its Derivatives Exchange in June of last year with the goal of attracting more retail traders to its platform. This week’s news shows that the company recognizes the potential attraction its exchange could have for institutional investors, as well. Regulated by the Commodity Futures Trading Commission (CFTC), the CDE will leverage its new TNS-provided financial trading infrastructure to enable institutional investors to grow their storage capabilities and process large data sets with less delay.
Digital banking solutions company Payfare is expanding to offer clients earned wage access.
Payfare will target workers in Canada and in the U.S., which it estimates to have a total addressable market of over 131 million people.
Payfare’s solutions target gig workers and its client base include Uber, Lyft, and DoorDash.
Digital banking solutions company Payfare is expanding into the earned wage access (EWA) market. The move will enable the company’s one million active users to receive access to wages they’ve already earned.
The Canada-based company believes the move will benefit its one million active users across the U.S. and Canada by smoothing out their cashflow. By jumping into EWA, Payfare joins a handful of fintechs already operating in the space, including Payactiv, Wagestream, DailyPay, and more.
Founded in 2015, Payfare serves both end consumers and businesses with digital banking, instant payment, and loyalty rewards solutions. The company offers gig workers and contract laborers faster access to their earnings with a payout debit card featuring cashback rewards and tandem mobile app with financial wellness tools. Businesses can use Payfare’s technology to send payouts to their workforce with lower processing fees than traditional paycheck services.
“We don’t believe payday loans should exist in the modern world with real time integration to payroll records as well as the capability to repay at source,” said Payfare CEO and Founding Partner Marco Margiotta. “We have built an award-winning digital banking product that has helped our gig platform partners reduce their worker acquisition costs and boost productivity. We look forward to sharing progress on our expansion into EWA over the course of 2023.”
Payfare reports the market for an EWA tool is sizable in both the U.S. and Canada. In the U.S., for example, more than 78 million workers earn a wage hourly, more than 131 million people earn an annual salary of less than $75,000, and 12 million people rely on a payday loan at least once a year. In Canada, over 22 million people earn under $75,000 annually.
Since inception, Payfare has raised $49 million (C$65.4 million). The company’s clients include gig worker platforms such as Uber, Lyft, and DoorDash.
