Apple Pay is The Most Popular Payments Platform in the US, Uber Launches Uber Money & Goes Deeper Into Finance, PayPal Gets Chinese Payments License

October has been super interesting and really intense for the FinTech sector. If September was undoubtedly all about Stripe, then October should go to Uber, which at the end of the month launched Uber Money and hence strives to go deeper into Finance per se. In addition to that, PayPal got Chinese payments license, Rapyd raised $100M, Robinhood has launched savings product and much much more.

Hence, without further ado, let us dive into what has happened in the financial technology sector past month.

Revolut to Go Global Through New Deal with Visa

The first week of the month was really hot. It started off with Revolut, which is set to double its global footprint, pushing into 24 new markets thanks to a global deal with Visa.

Revolut says the expanded relationship with Visa will bring its bank-like product offerings to five new regions, reaching 24 new markets for a total of 56 markets globally. Under the terms of the agreement, Revolut will primarily issue Visa-branded cards in the global expansion.

Jack Forestell, CPO at Visa, said:

With Visa being accepted at nearly 54 million merchant locations across more than 200 countries, we have the scale, experience and expertise to help FinTechs like Revolut go global.

The agreement will see Revolut expand beyond its European stronghold and Australian outpost, beginning with launches in North America, Singapore and Japan.

PayPal Gets Chinese Payments License

During the same week, PayPal has become the first foreign firm to get an online payments license in China after buying a 70% stake in Guofubao Information Technology Co (GoPay).

In a brief statement, PayPal CEO Dan Schulman says the People's Bank of China has approved the GoPay acquisition, with the deal set to close in the fourth quarter. Terms were not disclosed.

GoPay holds a payment business license, meaning that PayPal becomes the first foreign company to enter the Chinese market some two years after Beijing promised to open up. 

The likes of Visa and Mastercard have not had their license applications approved, despite the central bank's pledge last year of "equal treatment" for domestic and foreign providers.

PayPal will be able to offer online, mobile and cross-border renminbi payments, taking on market giants WeChat Pay and Alipay.

Bnext to Launch in Latin America with $25M Series A

Further, Spain's first alternative banking app Bnext has scooped the largest Series A financing round in the Spanish FinTech sector to date, banking $25 million as part of a strategy to launch its services in Latin America.

The financing round was led by new investors DN Capital, Redalpine and Speedinvest, together with existing investors such as Paris-based Founders Future and Mexico-based Cometa. Other investors include Enern, USM and Conexo.

Launched in 2018, Bnext now counts more than 300,000 active users, processing more than 100 million euros in monthly transactions. 

Bnext operates in the EU under an E-Money licence, offering users a card and a linked mobile marketplace offering banking products from select partners. The company also provides an account aggregation feature to manage traditional bank accounts from within the app.

The Latin American launch will commence in Mexico followed by a progressive roll out across the region.

Rapyd Raises $100M

Moreover, Rapyd, a FinTech-as-a-service platform that enables businesses and consumers to pay or be paid however they choose for local and cross-border e-commerce transactions, has closed a $100 million funding round led by Oak HC/FT and joined by Stripe.

Tiger Global, Coatue, General Catalyst, Target Global, Stripe, and Entrée Capital also joined the round, which comes just months after Rapyd raised $40 million in Series B financing.

Rapyd claims to have found a growing market opportunity: more than half of all transactions worldwide are facilitated via bank transfer, but merchants find it increasingly difficult to digitally enable local payment methods and process cross-border sales that are critical for international expansion.

Its platform lets firms access over 500 local payment types including bank transfers, e-wallets and cash in more than 100 countries. Businesses can seamlessly integrate these payment methods into any digital application from a single API and scale them globally across multiple payments networks. In addition, the platform offers disbursements in over 170 countries, multi-currency settlement to a single file across 65 currencies, and KYC, AML and counter financing terrorism services.

The new funding will be used to build out the cloud-based platform and network.

Arik Shtilman, CEO of Rapyd, said:

Global commerce is at a critical inflection point as businesses are pressed to launch new applications, process and accept local payment methods, disburse funds, and manage risk and compliance so they can offer highly localized customer experiences without having to build their own infrastructure. The expectation today is that this must happen around the world in order to drive growth into new markets.

Credit Karma Moves Into Savings

The week was closed by US credit scoring outfit Credit Karma, which is launching its first financial product, offering its 100 million members the opportunity to open a high-yield savings account with the firm.

Because existing members have already shared their financial picture with Credit Karma, signing up is seamless with minimal clicks to open an account. There are no fees and no minimums to open. Users will be able to watch their savings grow directly within the app, which will offer an initial rate of 2.03%. 

Credit Karma is relying on its network of 800 member banks to search for and switch to those offering the most competitive rates.

“The thought of opening a new account or downloading another app can feel overwhelming and we know inertia is one of the biggest barriers to financial progress. When we built Credit Karma Savings, we wanted to develop a product that made opening a savings account as easy as possible for our members,” says Jagjit Chawla, GM of Savings and Tax for Credit Karma. “We’re also making it possible for members to see the power of high-yield savings with our savings simulator, which shows how your money could grow over time.”

Credit Karma is not becoming a bank. Instead, the Credit Karma platform facilitates the opening and managing of accounts, where savings are housed and insured to the tune of $5 million through FDIC-licenced partner MVB Bank.

Munich Re Invests $250M in Next Insurance

The second week of October started with Next Insurance, a US digital insurance startup focused on small businesses, which has joined the unicorn club after securing a $250 million investment from German reinsurer Munich Re. 

The investment means that Munich Re holds a 27.5% stake in Next Insurance, which is now worth just over $1 billion.

Palo Alto-based Next Insurance launched three years ago, providing SMEs with a host of tailored insurance products through its online platform.

The startup, which has already amassed a customer-base of over 100,000 firms, says it will use the new funding to build new products and expand customer initiatives. 

Joachim Wenning, Chairman of the Board at Munich Re, said:

Next’s data- and technology-driven business model offers outstanding growth opportunities, which we will harness together. Next Insurance will benefit from our expertise in primary insurance and reinsurance.

NatWest to Trial Biometric Credit Card

During the same week, NatWest announced that it is to begin a three-month trial of biometric fingerprint credit cards with 150 customers.

The bank has previously piloted biometric debit cards, but this will be the first-time credit cards have been issued. The biometric credit cards will offer contactless payments using fingerprint verification for transactions up to ￡100, an increase on the current ￡30 limit.

The card is powered through the card terminal and when a customer presents a card, a green light on the card indicates that the fingerprint has been matched successfully.

Georgina Bulkeley, Director of Innovation at NatWest said:

After the successful pilot of our biometric debit card we are looking to test the technology further with credit cards. This is the biggest development in card technology in recent years and not having to enter a PIN not only increases security but makes it easier for our customers when paying for goods or services.

NatWest is working with Mastercard and digital security company Gemalto to bring the service to customers in the UK.

Robinhood Launches Savings Product

Finally, the week was closed by stock trading startup Robinhood which has launched the successor to its doomed checking account, Robinhood Cash Management, a savings product offering 2.05% interest combined with an associated debit card.

Robinhood's first step into the banking business last December was a PR disaster, after the company hastily backtracked on the launch of its Checking & Savings account following a backlash from regulatory bodies.

"We believe our financial system should work for you and do more for your money," says the firm in a statement. "To help get us there, we announced plans in December to launch a new product. We made mistakes with that announcement, which led us to hit the reset button and start over from scratch."

The Cash Management account offers much the same benefits and branding as the aborted Checking & Savings product, but on this occasion offers FDIC insurance on uninvested cash in customer accounts which will be held at six licensed banks.

The Mastercard debit card will enable users to withdraw and spend money from their brokerage account, with the unspent balance swept into the FDIC-insured partner banks via Promontory’s debit suite system. Those banks include Wells Fargo, HSBC, Goldman Sachs, Citibank, U.S. Bank and Bank of Baroda.

Revolut Plans to Raise $1.5B in Debt and Equity

The third week of the month was kicked off by Revolut - it has hired JPMorgan to oversee a $500 million equity raise and $1 billion convertible loan, in a move that would bring the total funding raised by the loss-making firm to almost $2 billion.

The search for new capital comes just weeks after Revolut secured a global deal with Visa that would see the FinTech upstarts to move into 24 new markets and boost staff numbers to 3500.

According to Sky News, which first reported on the upcoming funding round, Revolut is aiming for a valuation of between $5 billion and $10 billion from the capital raise.

Insiders said that Revolut would seek to raise the new loan on the basis that it would convert into shares in the event that the company received a US banking license.

Revolut now has 7 million customers across Europe, about half of whom are in the UK. The firm, which reported a pre-tax loss of ￡33m in 2018, compared with ￡15m the previous year, claims to be opening 12,000 new accounts every day.

Paytm Should Raised $2B Funding Round

During the same week, Indian mobile payment giant Paytm announced that it is looking to raise $2 billion at a $15 billion valuation, according to the Financial Times.

Existing investors Ant Financial and Softbank are likely to join a round that is expected to close within two months, says the FT, citing sources.

The money will be used to help Paytm stay at the top in a market where it is facing competition from Google Pay, Walmart's PhonePe and the imminent arrival of Facebook's WhatsApp payments service.

The firm is also taking on the likes of Amazon and FlipKart in the ecommerce sector and looking to expand internationally, beginning with Canada and Japan.

French Payment Processor Lemon Way Raises €25M

Further, Lemon Way, a Paris-based payment processor for e-commerce marketplaces, has secured a €25 million investment from Toscafund Asset Management.

Founded in 2007, Lemon Way has built up strong presence in the fast-growing sector of marketplaces, crowdfunding platforms and e-commerce websites that require payment processing, wallet management and third-party payment services in a KYC/AML-regulated framework. 

The firm provides an all-in-one platform of modular and propriety API-based services from on-boarding to cash pay-out flows. It now works with more than 1400 European marketplaces and last year handled total business volume of €1.9 billion in flows.

The latest funding will be used to develop more products and strengthen the firm's presence in the UK and Germany.

"The investment provides us with substantial additional resources, allowing us to bring the company to the next level,” says Antoine Orsini, CEO of Lemon Way.

Galileo Closes $77M Capital Injection

Finally, Galileo, which provides the API infrastructure layer for some of the world's top FinTech startups, is plotting a global expansion programme after snagging $77 million in its first institutional funding round.

Hot FinTech startups such as Chime, Robinhood, Monzo, Revolut, Transferwise, and Varo use Galileo APIs to to open and verify new financial accounts, issue and process payment cards, and launch new products. 

Galileo Founder & CEO Clay Wilkes said:

Over the years, we’ve built the API standard for card issuing programs and fintech innovation, focusing on a feature-rich product set, profitability and delighting our clients. This funding will help us double-down on these themes, while also becoming more aggressive in expanding geographically.

As of September 2019, the Salt Lake City-based firm manages over $26B in annual payments volume, a 130 percent increase over September 2018.

The $77 million capital injection was led by venture capital firm Accel with participation from Qualtrics co-founder & CEO Ryan Smith. 

Card Schemes Join for One-click Payments Button

The 4th week of October was really intense. American Express, Discover, Mastercard and Visa announced they are rolling out interoperable one-click checkouts at select e-commerce sites across the US, eliminating the laborious and repetitive key-entry of personal account numbers and information when shopping online. 

Based on the new EMV Secure Remote Commerce (SRC) industry standard, the networks have tested the technology in market with issuers and merchants and are preparing to introduce click to pay at select sites in the United States this month, leading up to wide availability in early 2020.

The initial focus will be on converting existing Masterpass and Visa Checkout merchants to click to pay, with payment processors and payment platforms, such as Adyen, Authorize.Net and CyberSource - Visa solutions, FIS, Global Payments, Mastercard Payment Gateway Services and Stripe all onboard.

Cinemark, Movember and Rakuten are the first merchants to adopt the common click to pay button on their websites, with BassPro, JoAnn Fabric and Crafts, Papa John’s, Saks Fifth Avenue, SHOP.com and Tickets.com following by the end of 2019. 

The card schemes are promising merchants a reduction in shopping cart abandonment rates and a way to offer multiple card brands for digital checkout in one seamless integration.

Instabase Raises $105M

During the same week, Instabase, a US platform startup that helps banks and other firms build business applications from the ground up, has joined the unicorn club after closing a $105 million Series B funding round led by Index Ventures.

Existing investors Greylock Partners, New Enterprise Associates and Andreessen Horowitz, as well as Spark Capital, Tribe Capital, SC Ventures, and Glynn Capital joined the round, which brings Instabase's total funding to $132 million and values the company at over $1 billion.

Founded in 2015, San Francisco-based Instabase has developed a platform that enables clients to build customizable apps for automating different parts of their business. Users visit an app store of pre-packaged business apps for different industries, such as income verification, adverse media analysis, identity verification, trade finance, contract analysis, and financial spreading.

The firm is working with more than half of the top 10 US banks and last year was picked by Standard Chartered to automate its client onboarding, credit documentation, and KYC processes.

The new funding will be used to scale the core platform and recruitment. 

Anant Bhardwaj, CEO of Instabase, said:

Today, on your smartphone you have an app store where you can find a dozen apps to have food delivered to your door, but we don’t have an app store where large enterprises, for example, a bank can find an app for income verification; or an insurance company can find an app for processing claims; every such application is custom built. We should wonder — why?

Starling Bank Raises ￡30M

Further, UK challenger Starling Bank has raised ￡30 million in a new funding round as it firms up its B2B offering and prepares for expansion into European markets.

Merian Chrysalis Investment Company Limited is leading the round with an investment of ￡20 million, while Starling’s existing investor, JTC, has added a further ￡10 million.

Since launching its app in May 2017, Starling has opened 930,000 accounts. It expects to hit 1 million customers within weeks.

Today’s investment brings the total raised by Starling to ￡263 million and follows a ￡75 million funding round, led by Merian Global Investors in February 2019, as well as the award to Starling of ￡100 million from the RBS bail-out fund to kickstart its move into the business banking sector. 

Anne Boden, Founder and Chief Executive of Starling Bank, commented:

This latest investment of ￡20 million from Merian Chrysalis will support Starling’s rapid growth and help us reach one million customers and ￡1 billion on deposit within weeks. It will also help us accelerate our global expansion, starting in Europe, so that even more people can benefit from the Starling app.

Apple Pay Beats Starbucks to US Mobile Payments Crown

Furthermore, Apple Pay has overtaken Starbucks as the most popular mobile payment app in the US, according to figures from eMarketer.

Starbucks has long held the top spot in the US mobile payments market, tempting users with special offers, discounts and order ahead queue-jumping.

Bonus: Starbucks: Leader in Mobile Payments. Continued.

However, the gradual spread of contactless terminals across the US retail market has been a gift to Apple. According to Digital Trends, Apple Pay is expected to be available in 70% of US retailers by the end of 2019. 

The strong uptake has prompted eMarketer to revise its figures upward for 2019.

EMarketer principal analyst Yory Wurmse says Apple Pay is now expected to account for 47.3% of mobile payment users. Following closely behind, the Starbucks app will have 25.2 million users this year, representing 39.4% of proximity mobile payment users.

“Apple Pay has benefited from the spread of new point-of-sale (POS) systems that work with the NFC signals Apple Pay runs on,” says Wurmser. “The same trend should also help Google Pay and Samsung Pay, but they will continue to split the Android market.”

Total spending via proximity mobile payments will approach $100 billion this year in the US, he says. That means that on average, a user will spend $1,545 per year using contactless mobile payments, up more than 24% over last year.

US Neobank Current Raises $20M

Finally, the week was closed by the US neobank Current which has raised $20 million in a bid to grow its user base to 1 million personal checking accounts.

Wellington Management Company is a first-time investor, and also joining the round is Galaxy Digital EOS VC Fund. CMFG Ventures, the venture capital arm of CUNA Mutual Group, a mutual insurance company serving credit unions and their 120 million members, joined the fundraise. In addition, QED Investors, Expa and Elizabeth Street Ventures return to fund and support the company. It has so far raised a total of $45 million.

Founded by Wall Street veteran Stuart Sopp, Current describes itself as a new kind of financial services firm, with a banking and payments platform built for the social media-driven connected world.

Its first product was a family-friendly debit card that parents can connect to their bank accounts and give to their kids, adding funds through automated or one-off transfers. 

Using the same core technology, Current early this year lunched Personal Checking accounts with benefits like faster direct deposits, gas hold crediting and merchant blocking without charging overdraft fees, minimum balance fees or hidden fees.

The company now claims to have 500,000 accounts and has set a mid-2020 target to reach one million users. To this end, Current has expanded its partnership with Visa to to reach more customers of varying demographics with joint marketing efforts.

“We have deep experience from Wall Street, gaming, fashion and fintech that has allowed us to approach banking in a new way to serve the majority of Americans,” says Sopp. “This funding will enable faster execution and growth on our company’s mission.”

Greensill Lands $655M Investment & Acquires UK FinTech FreeUp

The last week of the month was kicked off by Greensill, a UK-based supplier of alternative supply chain finance, that has secured a $655 million follow-on investment from SoftBank Vision Fund.

The new tranche of capital comes just five months after the SoftBank fund ploughed $800 million into the firm, doubling its valuation to $3.5bn. In the past 14 months, Greensill has raised more than $1.7 billion.

Founded in 2011 by US investment banker Lex Greensill, the firm says it will use the funds to accelerate its international expansion plans and to fund strategic acquisitions.

The first of the acquisitions is FreeUp, a London-based company that is developing technology to enable workers to receive early payment for earned, but unpaid, wages at zero cost to the employee.

CEO Lex Greensill says that while supply chain finance programmes already allow a company’s suppliers to obtain early payment, FreeUp’s technology would allow Greensill to extend the service to a company’s workers.

A pilot of the new product will begin immediately, he adds, with a full launch to come in the next few months.

Starbucks to Test Digital Asset App from Bakkt

During the same week, cryptocurrency trading platform Bakkt disclosed that it is preparing to test a consumer app for digital assets with Starbucks early next year.

A subsidiary company of IntercontinentalExchange, Bakkt intends to leverage Microsoft cloud to create an open and regulated, global ecosystem for digital assets.

Mike Blandina, Chief Product Officer at Bakkt, said:

Bakkt’s approach to secure technology, privacy and innovation means that we are an advocate for consumers who have yet to enter the digital asset space, and for merchants who want to accept new, efficient forms of payments without increasing risks.

The linkup with Starbucks has been in the works for over a year. 

Speaking at the launch of Bakkt in August 2018, Maria Smith, VP of Partnerships and Payments for Stabucks, said:

As the flagship retailer, Starbucks will play a pivotal role in developing practical, trusted and regulated applications for consumers to convert their digital assets into US dollars for use at Starbucks.

It's important to note that Starbucks will not be accepting bitcoin in exchange for a frothy cappuccino, but rather will use the app to convert bitcoin to US dollars at the point of sale.

The first tests of the system are expected to take place in the first half of next year.

??Starbucks - Leader in Mobile Payments??

Uber Launches Uber Money

Finally, the month was closed with a cherry on top - ride hailing giant Uber is moving deeper into financial services with the launch of a new division, Uber Money.

The Uber Money team has been charged with delivering new financial products and technologies, including a mobile bank account, digital wallet and upgraded credit and debit cards.

The first product out of the hatch will provide Uber drivers and couriers with real-time access to their earnings after every trip through the Uber Debit account, which will be run in association with Green Dot. The refreshed Uber Debit Card will launch with cash back on gas starting at 3% and up to 6% for the highest tier of Uber Pro drivers.

Initially being introduced to drivers in the US, the company plans to export the system globally over the coming months.

In tandem with the new account, Uber will also push out a digital wallet, through which users track their earning and spending history, manage and move their money, and discover new Uber financial products. 

The firm is also relaunching the Uber Credit Card, in partnership with Barclays, offering five percent back in Uber Cash from spending across the Uber platform.

The loss-making firm is taking a leaf out of the playbook from competing ride hailing apps in Asia, such as Grab and Gojek, which have successfully developed new revenue streams by branching out into financial services.

In July, Uber joined forces with BBVA in Mexico to bring banking services to customers, using the Spanish bank's Open APIs to allow drivers to access things like real time payments and debit card spending within their app.

The firm says lessons learned from the collaboration with BBVA have been incorporated into its plans. 

Uber Money boss Peter Hazlehurst says the launch of the new division is a response to issues faced by drivers and others in the gig economy around access to financial services.

For example, Hazlehurst said what they had found with BBVA in Mexico was that 35 percent of their drivers coming on board had never accessed banking services before.

However, once they started using the app as a banking platform, they then started bringing in money from other places too.

??Uber Money, or All You Need to Know about Uber's New Quest into Finance??

??Subscribe?? to my weekly newsletters (followed by nearly ??28,000?? people) about FinTech and Blockchain & Crypto:

?? Weekly FinTech Digest

?? Weekly Blockchain & Crypto Digest

Also, don't forget to ??subscribe?? to my monthly series and always stay up-to-date:

?? Month in FinTech

?? Month in Blockchain & Crypto

P.S. You might enjoy my earlier pieces as well:

?? Here's Why WeWork Simply Couldn't Work

?? 70 Blockchain Terms Everyone Should Know

?? The Biggest Deals in FinTech History are Taking Place NOW

?? All You Need to Know About Apple's New Credit Card

?? Apple Card vs. Amazon Card - Which One is Better?

***

About: I am a business developer, sales professional, FinTech strategist, as well as Cryptocurrency and Blockchain enthusiast. I'm highly passionate about Financial Technology and Digital Innovation, and strongly believe that it will change the world for the better. Apart from my daily job at a global payments startup where I'm leading company's expansion into Europe , I'm an active member of FinTech community and a TechFin evangelist.

If you've enjoyed this piece, don't hesitate to press like, comment what you think and share the article with others. Let's spread the knowledge together!

For more, hit the subscribe button, follow me on LinkedIn & Instagram. I'm building the best community the social world has ever seen!????