Hello Fintech Friends,

This week, I attended another exceptional Money2020 (I’ve seen estimates that between 15k and 20k fintech enthusiasts were there with me). I have a few thoughts and reflections from the conference which I’ve added in their own section below.

As a result, you can expect a lot of product launch and fundraise announcements in this weekend’s newsletters. It’ll get a bit dense.

Next week marks the start of November, meaning we’re in the home stretch for 2022!

That leaves us with one more chance to come together, at this year’s Fintech Formal, the black tie gala for the international fintech community in New York on November 11th. Join us at the Met Club (shown below), originally founded by J. P. Morgan, at www.fintechformal.com/rsvp

Please enjoy another week of fintech and banking news below.

💬 Quote of the Week

💡Money2020 Thoughts

A few reflections:

1. The conference was dominated by B2B. Past years felt much more consumer-oriented in terms of product offerings, but with many consumer valuations flagging (Robinhood, Affirm, MoneyLion), embedded finance providers spent lavishly on booths to attract potential clients. Conference spend is usually a bit of a lagging indicator, so I expect B2B competition will enable a new wave of consumer fintech innovation in the coming years.
2. There was a much greater presence of international fintech than prior years, with dedicated agendas for Africa, LatAm, Asia, etc. As you’ll see below, in dollar terms, there is still a lot of opportunity here.
3. There was product convergence between many larger competitors, such as Adyen, Marqeta, and Synctera all launching banking-as-service products. It will be interesting to see the wave of consumer innovation that fiercer embedded finance competition inspires; my impression, if Fiserv and FIS are any indication, is that this is far from a winner-take-all market.
4. US CFPB Director Rohit Chopra’s remarks were important (read them here). In the wake of the global financial crisis, a small part of US financial legislation, Dodd Frank §1033, affirmed that financial data is owned by the consumer, not the institution. This concept of self-sovereign data ownership is the fundamental underpinning of PSD2, GDPR, cryptocurrencies, and many of the exploitation- and censorship-resistant tech movements of the past decade. I personally spent years in DC with FDATA (as well as MX’s Jane Barratt, Plaid’s John Pitts, and others), talking with politicians and regulators about the importance of letting people own and leverage their own financial data. Seeing the CFPB redefine data ownership from a negative right to a positive one is an important step forward in the development of better financial products.

📖 Read of the Week

Coatue this week published Fintech and the Pursuit of the Prize: Who Stands to Win Over the Next Decade? The report, worth a read, introduces an interesting ‘Rule of 200,’ similar to SaaS’ rule of 40, which “posits that fintechs should be targeting net retention rate, revenue growth, gross margin, and operating margin above 200%.”

Other takeaways in the report are that large balance sheets make sense in this macro environment, given thinner funding and higher rates paid on savings (agreed - for now), that B2B businesses have more solid structural dynamics than B2C (I think we are at the end of this period, and fierce B2B competition pursuit of growth will swing the pendulum back towards B2C), that emerging markets present opportunity for growth (agreed), and that crypto will augment much of payments (agreed - and eventually replace).

FT Partners also released their Q3 Fintech Overview, which contains some interesting insights such as this power law-distributed distribution of fintech funding between countries. For all the press around venture capital flowing to emerging markets, the dollar volumes still trail the US and UK by a significant margin - which means there is still a massive opportunity to be realized.

📊 Stat of the Week

Neobank open banking APIs are by far the fastest; whereas traditional banks are the slowest, with a 300ms difference. (Source: UK Open Banking API Performance)

In the US, 76% businesses still use checks once a year, 73% use ACH, 68% use corporate cards and 67% use credit cards. In Europe, ‘only’ 61% of businesses use checks. (Source)

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🏦 Financial Services & Banking

🚀 Product Launches

The Commonwealth Bank of Australia launched an app for charities to take digital, contactless donations.

📰 Other News

JP Morgan’s Jamie Dimon is slowly changing his tune on digital currencies, calling blockchain ‘real’ as the bank prepares to launch blockchain euro deposits and potentially get into NFTs? Meanwhile, Fidelity is rolling out ethereum to institutions next week, as the US’ first bitcoin ETF lost 70% in the last year.

NatWest is busy signing up partnerships with fintechs like Token, Tink, Yapily, TrueLayer, GoCardless and Crezco, to build variable recurring payments. Dutch bank ABN Amro merged its PFM app Grip into its mobile banking app.

Banks are competing to offer customers higher-yield products via brokerages, in a rising rate environment.

Payments Europe is pushing back on Europe’s timeline for instant credit payments, while Singapore released new legislation on digital currencies and the Hong Kong Monetary Authority released a study stating CBDCs can work with private stablecoins just fine.

The UK’s Financial Conduct Authority is studying Big Tech’s entry into financial services.

💻 Fintech

🚀 Product Launches

Let me know if I missed any.

Dutch payments giant Adyen launched a suite of embedded financial products, card issuing platform Marqeta expanded its product set to include new banking capabilities, and banking-as-a-service provider Synctera launched support for charge cards and a white-label app.

Card-as-a-service provider GoCardless launched its own fraud protection suite, and Point Predictive launched a consumer identity, income employment, and risk history tool.

PayFac Finix rolled out new APIs and SDKs for its in-person payment offering, going head-to-head with Stripe.

Crypto custodian Anchorage Bank launched a full-stack infrastructure offering that facilitates crypto payment gateways, structured financial products, and crypto investing. Competitor Fireblocks launched a payment engine to allow merchants to access funds from sales through instant fiat-to-stablecoin conversion.

Crypto tax platform TaxBit launched an automated solution to compliance and reporting challenges across cryptocurrency and digital assets.

Blockchain.com debuted its Marqeta-powered crypto Visa card.

Benefits software Rippling is getting into payroll, one month after launching spend management. Ramp launched a set of new tools for employee and vendor payment.

Biz2X launched a business lending platform for banks and credit unions. Veritran launched a digital wallet for small business owners to manage personal and business finances in one place. Sage launched an SMB accounting tool.

Buy-now-pay-later provider Zip launched its own card.

Bill Harris (formerly of PayPal, Personal Capital, and Intuit) launched Nirvana Money, an “accessible credit card product to radically simplify money for middle-income earners.”

Market data provider Refinitiv launched a new onboarding tool.

📰 Other News

JP Morgan will now let users pay with Meta, while Amazon will let users make payments through Venmo and Apple issued new rules for app store crypto and NFT purchases.

Gr4vy partnered with giant retailer Woolworth’s to enable all online payments.

Remittances provider Wise will bring investing products to Europe. Cross-border payments firm Thunes integrated with Visa Direct. Consumer neobank Current migrated to Visa’s DPS Forward Platform.

SMB finance provider Paystand will enable card users to get next-day-revenue. Peach Payments partnered with API provider Stitch* to bring instant checkout to merchants.

Ripple is working on bringing NFTs to its XRP ledger. Tether’s USDT will be available at 24,000 ATMs across Brazil. And YellowCard received its first African crypto license.

Stripe came to Thailand.

Nigeria’s Kloud Commerce shut down, leaving investors to seek legal recourse. LatAm SMB commerce builder Neta also shut down.

The UK's Institute of Directors launched a special interest group designed to boost the UK's fintech sector.

Come meet us in-person at www.fintechhappyhour.com.