The Main Edition

What will 2024 bring for fintech? (TWIF 1/5)

Partner with TWIF in 2024

Hello Fintech Friends,

Happy new year and welcome to 2024.

I'm starting this year with a more optimistic outlook than 2023. Why? After the ebullient period of hype-driven fintech fundraises in 2020 and 2021, the last 18 months have seen fintech get completely battered, in the form of layoffs, down-rounds, scandals, partner breakups, shut-downs – you name it.

The narrative of 2023 was that fintech is overvalued, that it is uninvestable, that it is over. But in tech, once a perspective becomes the narrative, that means it is out of date.

While fintech was becoming a twitter and media punchline, stuff like this began to happen:

Reports of fintech's death have been greatly exaggerated.

And with exciting developments in digital wallets, stablecoins, treasury management, fixed income, payments orchestration, and other financial services areas over the last year, the reality is starting to replace the narrative.

With that said, 2024 will bring many of its own challenges. We are certainly not out of the woods when it comes to bad news. There will be more fintech layoffs, closures, down-rounds, and even scandals.

But the fintech story is far from over; we're just entering the next chapter.

I hope you'll join This Week in Fintech this year in following the trendlines, not just the headlines.

I've compiled a few lists of 2024 fintech predictions below.

What's your biggest fintech prediction for the year?

Please enjoy another week of fintech and banking news below. (👍👎 Have feedback for us? Let us know!)

💼 Fintech Job of the Week

Employers: Want to get in front of 80,000+ weekly readers? Post a job here.

💬 Quote of the Week

There is one thing that this year’s leaders, Affirm $AFRM (+408%) and Coinbase $COIN (+392%), have in common: their CEOs, Max Levchin and Brian Armstrong, stood the ground in 2022, accepted losses and continued to push their companies towards their visions. Sounded bold when… https://t.co/BK5CXdxUDp
— Jevgenijs Kazanins (@jevgenijs) December 29, 2023

🏦 Financial Services & Banking

🚀 Product Launches

HSBC announced that it is launching Zing, a cross-border currency peer-to-peer payment app for non-customers, to compete directly with the likes of Wise and Revolut. The bank also announced the expansion of its ‘Growth Lending’ fund from £250 million to £350 million for high-growth startups.

HSBC goes after Revolut and Wise with new fintech FX app Zing - AltFi

📰 Other News

Chase expects its UK neobank to be profitable in 2025.

The Clearing House Association and Bank Policy Institute argued that the new CFPB open banking rules do not go far enough in protecting sensitive consumer financial data.

💻 Fintech

The United Nations and European Union are backing BankservAfrica and Mama Money, which are working to bring down the cost of remittances in Southern Africa.

The European Central Bank is beginning to consider vendors for its digital euro.

Stablecoin issuer Circle received Digital Asset Service Provider registration in France.

🤝 Partnership Corner

Tarabut, the Emirati open banking platform and payment processor, is partnering with decentralised savings platform Hakbah on onboarding.

👎 The Bad News

Two of JPMorgan’s three representatives on the board of Greek fintech startup Viva Wallet have quit in recent weeks, just a few months after joining the board. The bank spent $800 million to buy 49% of the startup just last year.

UK neobank Monese suffered a £30.5 million loss in accounts filed for 2022 and warned that it may have to shut down unless it can raise additional funds.

A consumer watchdog is coming after Starbucks for only letting users reload money in $5 increments, with a $10 minimum purchase.

Stat of the Week

Nearly 25% of UK buy-now-pay-later users have been charged late fees.

💸 Venture Financing

Bumper, a UK fintech provider of flexible payments for car repairs, raised a £40 million Series B.
Revfin, an Indian auto lender for electric vehicles, raised a $14 million Series B.
Yoti, a digital identity solution for financial services, received £12.5 million in debt funding from HSBC, and a further £7.5 million convertible debt funding from existing shareholders.
Backer, a startup that provides tax-advantaged 529 Savings Plans, raised a $9.5 million Series A.
Fimple, a Turkish and UK core banking provider, raised $5.5 million.
SalarySe, an Indian provider of credit on UPI rails for salaried employees, raised a $5.2 million seed round.
Crew, which provides a family-focused banking experience, raised a $2.5 million pre-seed.

💰 Venture Funds

Singapore-based Whampoa Digital and Wemade, a Korean gaming company, launched a new $100 million Web3 fund.
Dutch bank ABN AMRO will invest in SET Fund IV, a fund focused on the energy transition to a zero-carbon society.

📖 Read of the Week

☯️ Exits

💻 IPOs & SPACs

Kazakhstan-based digital banking and fintech firm Kaspi.kz, which is already listed on the London Stock Exchange, applied to list its American Depositary Shares (ADS) on the Nasdaq. Kaspi processed ₸ 7,665 billion in TPV and made ₸ 125 billion in revenue in Q3 2023, seeing 42% year-over-year growth.

🤝 M&A - Fintech

Blackstone will take a majority stake in Sony's payment service provider, Sony Payment Services, for about $280 million, valuing the company at ¥50 billion. Sony expects to book ¥20 billion gain in operating income this year.
Backer, the 529 savings plan company mentioned above, also acquired Saving For College, a media property and education savings resource.
Investing app Robinhood acquired U.K.-based Chartr Limited, a media company that specializes in data visualization and newsletters.
KindCard, a provider of alternative closed-loop payments solutions to businesses, announced that it will acquire OpenTransact, a self-serve banking platform for high-risk businesses.

🏦 M&A - Bank and FinServ

HSBC joined Barclays and Lloyds Banking Group in expressing an interest in the banking arm of supermarket giant Tesco.
HSBC also sold off its retail banking business in France to Crédit Commercial de France, a subsidiary of British lender My Money Group.

The most overlooked rent collection in payments is the “all-in” pricing of modern payment companies like Stripe, PayPal and Shopify.

At 250 bps plus 30c, it’s roughly 200bps more the ave interchange for debit txns (most of ecomm volume).

Large merchants negotiate this rate.… https://t.co/8ZN7ZszI67
— Terry Angelos (@terryangelos) December 22, 2023

There's a shift going in African venture that is starting to feel palpable. The advantage of being there from day zero is fading. We're really starting to see a gen 2.0 emerge and the key feature here: professionalization.

2024 is going to be a filter.
— Stephen Deng 邓广藻 (@mrstephendeng) January 3, 2024