Apple Pay vs. the EU ??????; Ramp is ramping up M&A: acquires AI startup ??; Klarna launches subscription service ahead of expected IPO ??

?? Hey, Linas here! Welcome to a ?? monthly free edition ?? of my daily newsletter. Each day I focus on 3 stories that are making a difference in the financial technology space. Coupled with things worth watching & most important money movements, it’s the only newsletter you need for all things when Finance meets Tech.

If you’re not a subscriber, here’s what you missed last month:

1. The Microsoft of Banking just made history ?? [a closer look at JPMorgan’s crazy performance in 2023 and what’s ahead in 2024 + some good bonus reads]
2. It’s happening: Elon Musk’s ?? will launch P2P payments this year ?? [what it’s all about & why it could be huge + some solid deep dives]
3. Investors bet on Stripe IPO in 2024 ?? [what’s happening & what it’s telling us + a bonus dive into Stripe]
4. 10 FinTech and Finance stocks to include in your portfolio for 2024 ?? | Part II [Capitalize on the growth and innovation driving Finance & FinTech forward]
5. Wise continues strong growth with upgraded 2024 guidance ?? [a look at their solid numbers & what they mean + what’s next & some bonus reads]
6. The Ultimate Corporate Finance Template Collection for CEOs ?? [a comprehensive resource for driving business growth and financial health]
7. Once a FinTech darling, Brex lays off 20% as growth slows & burn rate remains high ?? [uncovering all the details to see what this tells us about the future of Brex & the broader FinTech ecosystem]
8. The payments industry faces a pivotal year amid tighter funding and more M&A ?? [tighter funding & more M&A on the horizon, where the focus should be + some bonus reads]
9. Why Revolut hasn’t conquered India???? yet? ?? [status quo & challenges + bonus reads on how India’s disrupting payments globally & PhonePhe is building Indian Google]
10. Visa's strong Q1 2024 results and outlook despite macroeconomic headwinds ?? [analyzing the latest data & graphs & taking a big picture view + some bonus deep dives into Visa]
11. Apple Card thrives 5 years in, but what's next? ?? [is it a failure?; how it’s performing & what’s next + tens of bonus reads and deep dives]
12. The only way is up? Fidelity marks up the value of Elon Musk's ?? by 11% ?? [a holistic overview of the latest developments & why they matter + some bonus deep dives]
13. Goodbye, Paytm? Paytm Payments Bank's demise and the future of digital payments in India ?????? [the demise & the future of digital payments in India + some bonus reads]
14. Venture Capitalists amass a whopping $311 billion in dry powder ?? [latest data & what it means for startups and FinTechs + some bonus resources to help you get funded in 2024]
15. PayPal was expected to “shock” the world. Instead, they shot themselves in the foot ??
16. France’s Crédit Agricole bets on payments giant Worldline ??
17. Gen Z investing app aims to democratize wealth management with AI ????
18. Paradigm shift: Apple opens mobile payments to rivals after EU antitrust pressure ??
19. N26 expands into stock trading as part of profitability push ??
20. The Ultimate Africa Investor List ?? [200+ VC & PE firms and 70+ Angel Networks shaping the entrepreneurial landscape in Africa]

and more! Don't miss out and join the community here????

January was an absolutely insane month in FinTech. We will see why Apple's EU concession is unlikely to dent Apple Pay's dominance (+ some bonus reads); look at Ramp that’s ramping up M&A as it acquires AI Startup (what does this mean, how Ramp is dominating + some deeper dives); Klarna that just launched a subscription service ahead of the expected IPO (why it makes sense + some deep dives into BNPL giant), and explore other interesting news and developments.

Without further ado, let us dive into what happened in the financial technology sector last month. Let’s connect the dots.

Apple's EU concession unlikely to dent Apple Pay's dominance ??

The news ??? Last week I covered Apple which proposed allowing third-party mobile wallets access to the iPhone's NFC chip in the European Union for 10 years to address EU antitrust concerns

ICYMI: Paradigm shift: Apple opens mobile payments to rivals after EU antitrust pressure ??

The move aims to increase competition in the mobile payments market where 苹果 Pay has exclusive access to the technology.

Let’s take a quick look and see why it’s not a big threat to Apple Pay.

More on this ?? While the proposal gives a boost to rival services like 谷歌 Pay and Samsung Pay in their ability to compete, it likely won't significantly impact Apple Pay's market dominance.

Apple enjoys unrivaled loyalty among its users, especially younger consumers. Over 40% of US teens used Apple Pay in the last month, demonstrating its strong footing.

Additionally, using Apple Pay has become a habit for many users, making it difficult for competitors to change engrained consumer behavior without strong incentives.

More importantly, while services like Google Pay are growing faster by percentage, Apple Pay boasts over half of the US mobile proximity payment user market.

?? THE TAKEAWAY

Looking ahead ?? The EU concession shows Apple's willingness to make calculated moves to satisfy regulators. It likely determined any potential loss in Apple Pay EU market share will have minimal impact on global revenues. With strong brand power and habitual use driving Apple Pay adoption, competitors are still facing an uphill battle even with NFC access. Back to work.

ICYMI: The dawn of AI-driven finance: how Apple can transform smartphones into financial powerhouses ???? [the dawn of AI-driven finance with Apple at the center + more bonus reads]

Ramp is ramping up M&A: acquires AI startup to expand further into procurement ??

The deal ?? Finance automation startup Ramp is aggressively expanding its product suite through mergers & acquisitions (M&A).

After two previous purchases aimed at improving customer support and negotiated savings, Ramp has just acquired Venue, an AI-powered procurement platform founded in 2022.

Let’s take a look and see why it matters.

More on this ?? While financial details were not disclosed, the deal gives Ramp procurement capabilities to add to its existing offerings of corporate cards, expense management, accounts payable automation, and business travel.

Venue specifically helps companies manage vendor relationships and costs - an area ripe for AI implementation to eliminate inefficiencies.

The crazy part? The company sold itself less than 2 years after launching and before even needing to raise a Series A round ?? The remarkably fast exit reinforces Venue's ability to solve real pain points and build products people actively want to use. Bravo.

The traction ?? The acquisition comes on the heels of Ramp launching improved procurement features such as bi-directional contract integration, dynamic intake forms, enhanced purchase orders, collaboration tools, and spend analytics.

With Venue's founding team leading Ramp's new procurement unit, the company aims to further automate workflows like custom approval workflows and PO management.

And even without it Ramp already processes over $10 billion in annualized accounts payable spend, which marks a 10x increase in two years ?? Ramp states its goal is to become a "one-stop-shop" for financial operations software.

With Venue under its umbrella, the FinTech giant is definitely one step closer to that.

?? THE TAKEAWAY

Looking ahead ?? On a macro level, the procurement enhancements and Venue acquisition indicate Ramp's desire to compete with incumbents in the space such as Coupa and Concur. Additionally, the company's continued investment in AI and automation points to a future where technology eliminates tedious back-office tasks. If successful, Ramp would significantly disrupt legacy providers and potentially emerge as the financial OS for modern businesses. Finally, although this is 100% a payments play, it well coincided with what I wrote about last week about FinTech M&As - incumbents and well-capitalized startups are eager to snap up niche, unique technologies, and talent. On a micro level, this yet again widens the gap between Ramp and Brex :

ICYMI: Once a FinTech darling, Brex lays off 20% as growth slows & burn rate remains high ?? [uncovering all the details to see what this tells us about the future of Brex & the broader FinTech ecosystem]

The payments industry faces a pivotal year amid tighter funding and more M&A ?? [tighter funding & more M&A on the horizon, where the focus should be + some bonus reads]

Klarna launches subscription service ahead of expected IPO ??

The news ??? As Buy Now, Pay Later (BNPL) giant Klarna prepares for an initial public offering in the US, likely to occur "quite soon" according to CEO Sebastian Siemiatkowski, the company is diversifying its offerings with the launch of a new subscription service called Klarna Plus.

Let’s take a look.

More on this ?? For $7.99 per month, Klarna Plus subscribers will receive perks like no service fees, double rewards points, and exclusive discounts from popular brands.

The move shows Klarna aiming to add a recurring revenue stream before going public, which could make it more attractive to investors.

Subscription revenue is seen as more stable than relying solely on transaction fees. Rival Affirm is also said to be considering a monthly subscription plan for its users.

ICYMI: Strong growth & profitability: Affirm is becoming a force to be reckoned with ??

Klarna Plus launches on the heels of a profitable quarter for the company, thanks in large part to rising BNPL usage among US consumers. Klarna now has 37 million customers in the United States.

The subscription service had a six-month pilot test in Utah last year and is now rolling out more widely.

?? THE TAKEAWAY

Why this matters? ?? For Klarna, Klarna Plus represents a way to deepen ties with its most loyal users while also proving it can successfully add new revenue streams (obviously, adoption will really decide how successful it is). As the BNPL field gets more crowded, having diverse offerings and predictable income will be key competitive advantages as Klarna heads toward its IPO. Klarna gets it.

ICYMI: Klarna's remarkable comeback: how the FinTech giant went from valuation collapse to potential 2024 IPO ?? [latest numbers, how we got here, and what’s next + a look at how leveraging AI Klarna is building the Google of Shopping]

Extra Reads & Quick Bites for Curious Minds ??

• Revolut’s buffing its finance team ?? London-based digital bank Revolut has strengthened its finance team with several senior hires, including a former AmEx VP and Citi MD, after a turbulent 2023. John Kerrisk joined as head of financial control from cybersecurity firm Bitdefender. Martin McLeod was appointed CFO of Revolut Australia, having previously spent over 17 years at Citi. The moves follow issues like a $20 million hack and scrutiny of Revolut's finances in 2023, as well as the departure of former CFO Mikko Salovaara. They hint at Revolut aiming to rebuild its finance function under new interim global CFO Victor Stinga, who was previously part of the company's controversial "founders associates" team. ICYMI: Why Revolut hasn’t conquered India???? yet? ?? [status quo & challenges + bonus reads on how India’s disrupting payments globally & PhonePhe is building Indian Google]
• Wise vs. Banks ?? Wise reports that major UK banks charge high hidden fees on foreign currency exchanges. For GBP to EUR, HSBC has the highest fee (3.7%), followed by Lloyds (3.6%), Barclays (2.75%), and others (2.5%). Similarly for GBP to USD, HSBC again has the highest fee (3.7%), while the rest range from 3.6% to 2.3%. In contrast, digital banks Wise, Starling, Monzo, and HSBC's Zing have no hidden fees. The banks don't clearly communicate these fees upfront as required by regulations. An independent survey found only 22% of Britons think their bank gives them a fair deal, and 90% said banks tend to mark-up rates. Wise argues this lack of transparency by banks has led to a breakdown in consumer trust. ICYMI: Wise continues strong growth with upgraded 2024 guidance ?? [a look at their solid numbers & what they mean + what’s next & some bonus reads]
• PayPal cuts ?? PayPal is laying off around 2500 employees, about 9% of its workforce, as new CEO Alex Chriss aims to boost competitiveness and address a falling share price. In a letter to staff, Chriss said the "right-sizing" will enable PayPal to move faster in delivering for customers and driving profitable growth. The cuts, to be made through direct layoffs and unfilled roles, come after PayPal missed key targets last year under former CEO Dan Schulman. Its stock has dropped over 20% since January 2022. Chriss took over in September determined to reshape PayPal amid intense competition and a tricky macro environment. A prior round of 2000 job cuts was unveiled last year for similar reasons. ICYMI: PayPal was expected to “shock” the world. Instead, they shot themselves in the foot ??

Money Moves ??

• Nigeria-based FinTech Cleva has announced that it raised $1.5M in pre-seed funding, with the round being led by 1984 Ventures.
• Egypt-based fintech and customer loyalty app Zeal has announced the rise of a $4M funding round to increase its footprint in the wider MENA market.
• Zurich-based?Rivero, which digitizes and automates payment processes, raised?€6.4M?in a Series A round led by?6 Degrees Capital?and?Inference Partners.

Continue reading by subscribing to Linas's Newsletter. You will receive fresh news about FinTech with hot takeaways every day.

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

?? Top Resources for Startup Founders, CEOs, Investors & VCs ??

?? The Future of Finance: 10 FinTech & FinServ M&A predictions for 2024 ??

?? 10 FinTech and Finance stocks to include in your portfolio for 2024 ?? | Part I

?? The Future of Finance: 10 FinTech & FinServ M&A predictions for 2024 ??

***

About: I am a business developer, sales professional, and FinTech strategist, as well as a 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 the company's expansion into Europe, I'm an active member of the FinTech community and a TechFin evangelist.

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

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