Apple’s uncertain future after Goldman split ??; Visa buys Pismo for $1B ??; ?? gears up to offer payments & banking services ??; Klarna goes AI ??

?? Hey, Linas here! Welcome to a ?? weekly 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 Ultimate LTV/CAC Calculation Template ?? [use this to maximize business growth]
2. FinTech giants seek growth through strategic M&As ???? [two interesting deals + valuable resources to turn every M&A into a success]
3. Adyen to boost Klarna's growth as acquiring bank ?? [why this is a major win for Adyen + deep dives into both Klarna & Adyen]
4. The Ultimate KPI Dashboard Templates for All Your Needs ?? [use this to elevate your decision-making]
5. Amazon Drops Venmo ?? [why it made sense & what happened + what’s next & some deeper dives]
6. Revolut to go all-in on mortgages ??
7. Wise continues changing the game for banks ??
8. Coinbase launches free global crypto transfers via messaging links ??
9. N26 forecasts profitability in 2024 ??
10. The end of physical cash in Brazil ??????
11. Google Pay Later: Google adds BNPL to mobile wallet ??
12. Nubank & Circle partner up to unlock stablecoin potential in Brazil ????
13. ABN Amro bets on BUX M&A to boost digital offering ??
14. Elon Musk’s ?? receives more money transmitter licenses ??
15. DaveGPT empowers 10M members with personalized AI Assistance ????
16. Apple offers to let rivals access its NFC tech in EU antitrust case??
17. Apex Fintech confidentially files for US IPO ??
18. BlackRock bets Big on AI ?? [why it’s huge + more bonus reads on AI + Finance]

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

December was another super exciting and hot month in FinTech. We will look at Apple’s uncertain future after the Goldman Sachs split (who are the possible banking partners, and what’s next for Apple + some bonus reads and deep dives); Visa officially acquiring Brazilian FinTech Pismo (what it’s all about + a deeper dive into the deal & Visa as a long-term investment + bonus resources); ?? gearing up to offer payments and banking services (more licenses & why they matter + some deeper dives into how Elon Musk is building PayPal 2.0); Klarna which aims to replace workers with AI to drive profits (a strategy that works + deeper dives into Klarna & AI + Finance), and 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 uncertain future after Goldman Sachs split. Who will partner with Apple Card now? ??

Following the trends ?? After a successful 4-year run, Apple has decided to end its partnership with Goldman Sachs on the popular 苹果 Card credit card.

ICYMI: End of an era: Apple is shutting down its credit card partnership with Goldman Sachs ?? [what happened & what’s next + some interesting bonus reads]

With over 6 million users seeing it as their primary card, this leaves many customers wondering what's next for Apple Card.

Let’s take a look at this and see who are the possible banking partners, and what’s next for Apple.

The USP ?? We can remember that launched in 2019, the Apple Card aimed to fuse financial services and technology through deep iPhone integration, security features like tokenization, and financial perks like 3% cash back.

However, 高盛 struggled to make the card profitable, reportedly losing billions on the venture (more on that - above).

Partner search ?? Having said that, and knowing that the Goldman deal is off, now Apple is searching for a new issuing bank to take on its lucrative but complex credit card business. According to various sources, top contenders include:

• JPMorgan Chase: with $1.14 trillion in assets, Chase has the scale and digital infrastructure to smoothly take on Apple Card's millions of technologically-savvy users. ICYMI: Paradigm shift: JPMorgan launches Programmable Payments ??
• Citi: 花旗 has invested heavily in digital banking innovation and has a global presence that aligns with Apple's, making it well-equipped to preserve the Apple Card experience.
• Bank of America: BofA's $480 billion in assets, coupled with major tech investments, give it the resources to manage Apple Card's complexity while enhancing its digital experience.
• American Express AmEx is renowned for stellar customer service and digital capabilities, which could help maintain superior support and the tech-driven functionality of Apple Card. ICYMI: AmEx is building a B2B payments powerhouse ??
• Synchrony Financial: as the largest US store credit card issuer, Synchrony has experience managing a high volume of accounts, essential for serving Apple Card's 6+ million users.

Yet, an open question is if they can replicate Goldman's advanced tokenization technology which bolsters Apple Card's security.

More importantly, the transition also introduces uncertainty around credit limits, rewards, financing offers, and customer service - key pillars of the Apple Card experience. While Apple will likely ensure continuity in user experience, new bank policies could lead to changes.

?? THE TAKEAWAY

What’s next? ?? Long-term, the Apple Card breakup signals Apple's broader ambitions in consumer finance. We already know that the tech titan is working on its own payment and credit infrastructure to enable future products, and the breakup could push this agenda only forward. And this could eventually reduce reliance on banking partners over time. But for now, Apple Card's millions of iPhone users are left wondering if the card's magical mix of technology, security, and financial perks will change when it gets a new bank behind it. Apple and its new partner face a high bar in preserving the unique Apple Card experience.

Visa officially acquires Brazilian FinTech Pismo for $1 billion ??

The news ??? Visa just made a major play in the booming Latin American FinTech market by acquiring Brazilian payments startup Pismo for $1 billion.

The deal, which was recently greenlit by Brazil's antitrust regulator CADE, represents Visa's largest-ever investment in the region.

Let’s take a look.

More on this ?? We can remember that Pismo provides cloud-based financial services infrastructure that enables over 70 million accounts and processes $200 billion in transactions annually.

The acquisition thus gives Visa the capability to offer bank-grade payments processing and card issuance solutions to clients via APIs. Visa also gains support for local payment methods like Brazil's Pix real-time system.

For Pismo, being scooped up by the payments giant opens immense possibilities to scale its innovative offerings across Latin America under Visa's vast network.

The startup scene in Brazil is particularly vibrant - representing 31% of regional FinTech.

?? THE TAKEAWAY

Looking ahead ?? In short, this blockbuster purchase signals Visa's strategy to tap into surging digital finance adoption in emerging markets. With strong synergies in their operations, Visa can leverage Pismo's tech to provide next-gen banking and payments experiences as consumer behaviors rapidly evolve. But there’s more to that…

ICYMI: Prospering amid economic weakness: Visa acquires Brazil's Pismo in one of the largest FinTech M&A deals in LatAm ???? [a closer look at this deal to see how it perfectly fits into the credit card giant’s long-term strategy & uncovering why Visa is a strong long-term investment (based on DCF analysis, P/E ratios, & macro factors)]

+ you will also unlock 4 Essential M&A Templates to Master the Art of Dealmaking.

?? gears up to offer payments and banking services ??

The news ??? Money never sleeps. So does Elon Musk whose grand vision for X is coming closer to reality as the platform secures more money transmitter licenses across US states. During the same week.

With the latest approval from Pennsylvania, X now has the green light to facilitate money transfers in 13 states so far. Solid work ??

Let’s take a look at this.

More on this ?? This basically lays the foundation for X to introduce peer-to-peer payment capabilities soon, allowing users to send money to each other within the app.

The move essentially replicates services offered by the likes of PayPal and Venmo, positioning X as a major competitor in the digital payments arena.

If you’re closely following the space (or actively reading my newsletter ??), you know that Musk has been vocal about morphing X into an "everything app" akin to China's WeChat, where users can conduct ride-hailing, merchant payments, and even access banking services.

He now expects the rollout of new financial features by the end of 2024.

?? THE TAKEAWAY

Looking ahead ?? We must note that the licensing efforts began before Musk acquired Twitter, starting with less stringent states. Obviously, X still faces significant trust issues around Musk himself that could impact its payments push. Nonetheless, payments and banking could hugely diversify X's revenues beyond just advertising, especially given the recent advertiser exodus. If X can gain enough regulatory approvals and public trust, it could fundamentally transform into a one-stop shop for messaging, transactions, and daily financial needs — the fruit of Musk's ambitious vision. X may soon be much more than a social network.

ICYMI: Elon Musk’s ?? receives more money transmitter licenses ?? [why it matters & what’s next + a deeper dive into how Musk wants to replace your bank account within 1 year]

Klarna to replace workers with AI to drive profits ??

The news ??? FinTech giant Klarna recently instituted a hiring freeze for roles outside of engineering as part of a push towards profitability driven by artificial intelligence.

The Swedish Buy Now, Pay Later (BNPL) provider does not currently have plans for layoffs but expects staff numbers to organically shrink as people leave and are not replaced.

Let’s take a quick look at this.

More on this ?? This hiring freeze comes on the heels of 10% staff cuts made in May 2022. Klarna has been focused on tightening lending standards, cutting costs, and diversifying revenue streams to finally achieve consistent profitability.

These efforts now appear to be paying dividends. Klarna posted its first profitable quarter since 2019 in Q3 2022, earning SEK 130 million.

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]

The US market also saw its fourth consecutive quarter of gross profit growth. Klarna CEO Sebastian Siemiatkowski credits the company's AI advancements as a key driver of this performance.

?? THE TAKEAWAY

What’s next? ?? It’s clear that by relying more heavily on AI, Klarna aims to increase efficiency, continue reducing labor costs, and sustain this newfound profit trajectory. If successful, this strategy could position the company for a strong IPO in 2023. However, this focus on AI and automation presents risks as well. Klarna will need to ensure its tech delivers as promised and does not negatively impact customer experience. More importantly, maintaining growth while slashing jobs also poses challenges. Zooming out, one thing is clear - Klarna isn’t the first and definitely not the last company that’s implementing AI to drive efficiency and slash costs. A whole paradigm shift is just around the corner.

ICYMI: Ritual raises $25M to make AI decentralized ?? [the USP & why this is very interesting]

Generative AI will make Finance Autonomous ???? [taking a big picture view on the changes taking place now & what’s next + more deeper dives into AI & Finance]

Extra Reads & Quick Bites for Curious Minds ??

• The last of us ?? Jonas Templestein, the last remaining Monzo co-founder from its 2015 founding, has departed the UK challenger bank after nearly 9 years. Templestein was the former CTO and left alongside CEO TS Anil and COO Sujata Bhatia, who he credits with saving Monzo from existential threats during the 2020 pandemic when fundraising evaporated and losses mounted. With his exit, none of the original five co-founders remain at a bank they created to disrupt British banking. Templestein reflected on overcoming past struggles and expressed confidence in Monzo's future trajectory as he closes his chapter in its early story. His absence formally ends the era of original visionaries guiding Monzo. ICYMI: Monzo is exciting again: Alphabet to invest ￡300-500 million in a funding round valuing the digital bank above ￡4 billion ?? [what’s the story behind & what it means + lots of bonus reads and deep dives into Monzo and beyond]
• Robinhood in EU ???? US financial services company Robinhood has launched its crypto trading app in the European Union. The custodial platform offers users a monthly Bitcoin rebate based on trading volume. New users can earn up to 1 BTC for signing up and referrals. General Manager Johann Kerbrat sees crypto as shaping the future of finance and aligning with Robinhood's mission to make finance accessible. The EU's crypto regulations also fit Robinhood's commitment to compliant crypto operations. Key benefits include Bitcoin rebates, transparency, and the ability to earn BTC. As a publicly traded US company with security measures, Robinhood Crypto is now available to eligible 18+ EU citizens on iOS and Android. ICYMI: Third time lucky? Robinhood launches in the UK ???? [& why Google sold all its stake at Robinhood]
• Revolut’s billions ?? Revolut co-founder and CEO Nik Storonsky has been ranked the second youngest billionaire in the UK behind GymShark's Ben Francis. Although the average age of billionaires globally has dropped 11 years since 2014 to 47, 39-year-old Storonsky stands out with a ￡2.6 billion net worth. He launched the now ￡26 billion valued FinTech Revolut in 2015 at age 31 alongside co-founder Vlad Yatsenko, 33. Despite downturns in fintech valuations, Revolut continues expanding internationally. Storonsky is the only pure-play fintech founder in the top ten, just behind 55-year-old Moneysupermarket.com founder Simon Nixon. Other young British billionaires in finance include hedge fund founders Alexander Gerko of XTX Markets, Christopher Rokos, and Michael Platt of BlueCrest Capital. ICYMI: Revolut to go all-in on mortgages ?? [what’s the rationale behind & why it makes sense + some bonus reads & deep dives on Revolut]
• More AI in banks ?? CaixaBank has assembled a 100+ person cross-functional task force dedicated solely to deploying generative AI across internal services and customer offerings. Working alongside Microsoft and Accenture from Madrid and Barcelona offices, the team encompasses various CaixaBank departments and its tech subsidiary. The Microsoft partnership provides early access to GPT models and a secure test environment. Initial focus areas showing promise include optimizing digital customer service and enhancing risk analytics. Other explorations cover automating code/documentation generation and testing for new tech features. Multiple working groups are developing real-world use cases where generative AI can elevate employee and customer experiences. CaixaBank expects to start an organization-wide rollout in 2024. ICYMI: DaveGPT empowers 10M members with personalized AI Assistance ???? [what’s the value add & what’s next + some bonus reads about AI + Finance, and the building blocks of AI Bank of The Future]

Money Moves ??

• UK InsurTech startup CatX has successfully raised $2.7M in seed funding as the company looks to bridge the gap between supply and demand in the reinsurance sector.
• Crypto data platform?Shadow?secured $9M in a seed funding round led by?Paradigm?to expand its engineering team as it aims to simplify data handling on?Ethereum.
• Estonian RegTech Salv has raised €3.9M in new funding to spearhead a launch into the UK. The round includes investments from new and existing investors, bringing its capital raised this year to €7.9M and total funding to €12.1M.

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 ??

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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.

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