Hello Fintech Friends,

🤝 While the US was enjoying the Presidents Day holiday, Capital One and Discover's press teams announced the largest merger of 2024 (so far). Capital One will acquire Discover for $35.3 billion, a 28% premium to its current market cap.

Signals: What’s in your wallet?

The answer: “Discover”, if Cap One and Durbin 2.0 have anything to say about it.

This Week in FintechSophie Vo

The proposed merger is likely to face some regulatory headwinds, though it's unclear from whom: the CFPB, OCC, and Fed could all have reservations, but the truth is that the Visa-Mastercard duopoly currently accounts for over 80% of US card network transactions. The deal, if approved, would allow Capital One to leapfrog JPMorgan as the biggest credit card company by loans; though 4,000+ banks offer credit cards, the top 10 issuers (including Discover and Capital One) account for over 80% of loans.

We break down the implications for both firms, as well as how the proposed Credit Card Competition Act could affect them, in Sophie Vo's latest Signals piece, What’s in your wallet?

🇰🇪 Elsewhere, Wiza Jalakasi, TWIF's amabassador to African Fintech, hosted our third, biggest, and best annual Nairobi Fintech Meetup last week! Check out the recap below, and sign up for the next one here.

TWIF Nairobi FHH 2024

388 new items · Album by Wiza Jalakasi

Google Photos

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

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💼 Fintech Job of the Week

Principal, Southeast Asia - Quona Capital

Quona is already one of the most active fintech investors in Southeast Asia and sees the region as having tremendous further growth potential. It is setting up a Singapore office with one of the firm’s founding partners moving to Singapore to give…

Quona Capital

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💬 Quote of the Week

🏦 Financial Services & Banking

🚀 Product Launches

Visa, Checkout.com and Stake partnered to launch a cross-border funding service for real estate investment in the UAE.

Turkey's Garanti BBVA launched a Mastercard contactless credit card with a built-in fingerprint scanner.

📰 Other News

Credit card issuer Capital One will acquire card network and issuer Discover for $35 billion.

A new CFPB report found that large banks tend to offer worse rates across credit scores than small banks and credit unions and large issuers were more likely to charge annual fees.

Bad commercial real estate loans have overtaken loss reserves at JPMorgan Chase, Bank of America, Wells Fargo, Citigroup, and others after a sharp increase in late payments linked to offices, shopping centres and other properties.

Nasdaq signed a partnership deal with Ukraine to list newly public companies without fees.

More banks and investment management companies are walking back their climate pledges in the face of political resistance.

Barclays will shut 90 branches this year.

💻 Fintech

🚀 Product Launches

Revolut will debut a crypto exchange for advanced traders, featuring deeper analytics and lower fees than the digital bank's app.

Indian neobank PayNearby launched Digital Naari, an initiative designed to generate self-employment opportunities across rural and semi-urban areas in India.

UK fintech payments and money management provide Mollie launched Mollie Capital, a small business lending platform:

Franklin, a Danish fintech for e-commerce businesses, launched payment cards in partnership with cross-border payments provider Nium and Visa.

Compliance provider Hummingbird launched an AI-driven software automation product for customers, aimed at eliminating the manual, repetitive tasks that bog down investigators and compliance teams at large financial institutions.

Zilch launched a 3-month buy-now-pay-later product for purchases over £75.

Danish fintech spektr launched a platform to help financial firms with due diligence.

📰 Other News

Google Pay will enable more merchants to shift liability for fraudulent Visa transactions from themselves to the bank issuer.

Payroll and HR provider Rippling is expanding to Asia with a new HQ.

Brookfield Asset Management will start a pool that invests in financial infrastructure, like payments systems, as demand for the asset class grows.

Treasure Financial incorporated ETFs into its business cash management solutions.

VC Sequoia abandoned efforts to oust former partner Michael Moritz from Klarna's board, and will replace partner Matthew Miller with Andrew Reed.

Robinhood posted higher Q4 revenue thanks to net interest margin.

AuditBoard, a builder of risk management software for finance teams, is generating over $200 million in ARR.

🤝 Partnership Corner

FIS partnered with open banking provider Banked to enable new pay-by-bank solutions for businesses and consumers.

Small business payments provider Ebury partnered with Nium to power cross-border payments in Brazil.

👎 The Bad News

TomoCredit, which began life as a bitcoin credit card before pivoting to a 'no FICO' credit-building card issuer, faces multiple lawsuits and legal challenges, and is reportedly struggling to pay its bills.

JP Morgan is bringing Frank Pearn, its former global chief compliance officer, out of retirement to deal with issues arising from its fintech subsidiary Viva Wallet.

Cheese, an affinity-based neobank for Asian Americans, is shutting down.

The US imposed sanctions on several companies and individuals for smuggling technology to the Central Bank of Iran. Meanwhile, US federal regulators are probing whether Cash App leaves door open to money launderers and terrorists.

UK payment facilitator Checkout.com suffered a £100.5 million loss in 2023.

Swiss core banking provider Temenos hit back at Hindenburg Research's recent short-seller report, insisting it contains "factual inaccuracies" and "false and misleading allegations." Temenos will conduct an independent review of the allegations, as its shares sunk 33%.

Restaurant point of sale payments provider Toast is cutting 550 jobs - 15% of its workforce.

h/t to Jason Mikula for sharing this study that BNPL loans tend to be favored by financially fragile households:

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