This Week in Fintech (10/30)

Hello Fintech Friends,

We’re excited to add some final big names to our speaker list for the Fintech Geo Deep-Dives on November 13th! We’ll be joined by Kareem Aziz (MENA), Nelly Chatue-Diop (Africa), and Nina Mohanty (Europe).

Everyone who indicated interest in the deep-dives should have received calendar invites today for the sessions, which you can see ordered by time here.

Please find another week of fintech and banking news below.

Quote of the week

“Banks are moving to be more like fintechs, and as fintechs rebundle services, we will see banks doing their own unbundling and rebundling. The questions will be who is the best at meeting consumer demand, and what will those bundles look like?”

John Pitts, Plaid Head of Policy (Fintech Startups Broke Apart Financial Services. Now The Sector Is Rebundling)

Read of the week

The Information Commissioner's Office in the UK this week instructed credit reporting agency Experian to stop sharing consumers’ personal and credit information with third-parties without their consent. The bureau is expected to challenge the new rules.

I spotlight this because it could cascade into a sea-change in how regulators view personal financial data, and whether that data should be owned and permissioned by consumers themselves (something specified by Dodd-Frank § 1033 in the US). Access to user financial data is the lifeblood of most fintech, while data privacy is the defining feature of the next stage of the internet. How we address both will determine the future of consumer fintech.

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Financial Services & Banking

Product Launches

Brazil’s central bank launched an app to provide poor citizens free non-conditional cash transfers via instant payments.

Goldman Sachs launched its own banking-as-a-service product, publicly releasing APIs to allow developers to integrate the banks’ services into their own products.

JP Morgan has done an about-face on digital currencies, launching Onyx, a new unit to develop its own JPM Coin along with other blockchain products.

Other News

JP Morgan re-branded its blockchain Interbank Information Network as Liink and added new payment applications. Societe Generale brought in ethereum organization ConsenSys to provide technology services for a central bank digital currency pilot.

The pandemic is hurting card network giants Mastercard and Visa’s revenues. Both firms reported double-digit declines as consumer spending and cross-border travel wither. Mastercard research also determined that 20% of holiday shopping will take place online this year. Visa’s purchase of open banking technology provider Plaid from earlier in the year is also facing antitrust scrutiny in a Department of Justice investigation.

For fintech fans of money, UBS bank plans to invest $200 million of its balance sheet into fintech startups.

The OCC issued new regulation determining that fintech partner banks qualify as true lenders when their name is on the loan and they disperse the funds. The SEC scheduled an open meeting to determine fundraising exemptions to facilitate investment in small businesses. Indian regulators have set out a proposal for a fintech experimentation and regulatory sandbox.

Wells Fargo is expected to announce mass layoffs. The UK’s Post Office will shut down 600 of its 2,000 ATMs as it joins the Link network. Target2, the real-time settlement system for the Eurozone, experienced a system-wide failure on Friday, delaying the Sepa instant payments system.

Fintech

Product Launches

Sofi launched its inaugural credit card, with financial health features like a sustained 1% APR reduction after 12 consecutive on-time credit card payments, and was granted preliminary approval for a US bank charter. Coinbase also launched its credit card this week, which gives users up to 4% back in crypto rewards. Urban One, a black-owned media company, launched a digital debit account design for black account holders.

Astra released their financial money routing developer APIs, which allow any platform to configure rules for automated money movement embedded in their user experience.

Invoice management startup Stampli launched its payments product, Stampli Direct Pay, to act as a universal resolver for business payment methods. Stripe launched Stripe Climate to let businesses automatically direct portions of their revenue to carbon-offset activities.

DAPI launched its zero-fee instant payments platform for the US.

Other News

PayPal pledged to invest $50 million in eight black and latinx-led venture capital firms. Lyft is adding Venmo as a payment option and allowing users to access its features like splitting ride costs and paying with crypto.

Monzo is testing a new feature, Share Card Replacements, to automatically let merchants know new card details when a user replaces a card. Nordic challenger bank Lunar plans to expand into the buy-now-pay-later product space. Envel is building an AI-enabled bank account.

British fintech Cashaa is partnering with India’s United Multistate Credit Cooperative Society to launch a crypto financial institution with 34 physical branches in north India. Open banking startup Truelayer entered the Australian market.

Payment processor Adyen determined that it had been understating its revenue and EBITDA margins. Processor i2c joined Visa’s Fintech Fast Track program.

UK fintech investment firm Augmentum Fintech, which invested in Tide, Previse, DueDil, Iwoca, Monese and Zopa, is looking to raise an additional £28 million. Iugu, a Brazilian payments and billing automation startup, is going on a hiring spree following an investment from Goldman last month.

NYC Fintech Women opened its nominations for 2020 Inspiring Fintech Females. The Financial Data Exchange announced its growth to 153 members on its second anniversary.

Mobile savings app Beam Financial is in hot water, as high-APY promises have subsided to a reality in which many of its customers are attempting to withdraw funds but are finding themselves blocked from doing so.

While you’re here, I would like to share one of my favorite fintech newsletters, written by the always thoughtful Simon Taylor of 11:FS:

Fintech Brain Food is a weekly dive into the hottest topics in Fintech, 4 Fintechs you should see with a snappy summary, the best "good reads" of the week, and an analysis of the biggest stories in fintech. Not just what happened, but why it matters, direct to your brain, every Sunday.