FinTech Zapping - 13th October

FinTech Whispers

?? With its new checking account, Credit Karma wants to get into your wallet

Latest Intuit’s $7B acquisition is launching a checking account, a new addition to Credit Karma Money (savings account released last year). The FinTech is not targeting at becoming first bank option for its customer, rather their intention is to still collect as much data as possible from their users daily banking habits. Neobank US space is becoming crowder with players from many segments launching neobank offerings such as Robinhood, Betterment or Sofi

?? Varo turns focus to new products after national charter milestone

One step closer to deliver a profit driven business strategy through the expansion of bank offerings thanks to its brand-new license (let’s remember Varo was the first challenger to obtain its national banking license in the US). In a crowd space like the neobank segment in the US is important to have a competitive advantage to help you differentiate from your competition. Varo for sure will pivot its product strategy on its banking license to deliver a more complete bank offerings to its clients, while building a robust business strategy

?? Coinbase Enables Real-Time Card Withdrawals via Visa Direct

The crypto trader is enabling users to withdrawal digital assets (in this case cryptocurrencies) into fiat. This is a milestone for Coinbase team that has been working for the past few years into ways to bring closer the crypto space to real world use case. Cryptocurrencies volatile value impose a challenger when it comes to selecting the right exchange rate to convert to fiat, for now Coinbase is testing the solutions with a selected number of banks across the US and EU and only for Bitcoin and Ethereum

?? Crowdcube and Seedrs agree to merge, creating a significant private equity marketplace

The two largest crowd-equity funding platforms in the UK are merging, creating one the world’s biggest private equity marketplace. Given current situation (there has been a downward trend in early stage equity investment) the best strategy for these two companies was to merge, and move forward as one single platform to create a competitive position in the local market and perhaps opening to other ecosystems

?? Venmo launches its first credit card

Faster than we thought FinTechs are starting to offer credit cards at scale, primary targeting underserved segments traditionally overlook by incumbents. The combination of large customer base (~60M users) with high usage rates, personalized experiences fueled by rewards and seamless integration with the latest payment trends (QR codes, BNPL …) seems like a perfect recipe for Venmo’s latest product launch.

FinTech Reflection – Payments Innovation

Covid has accelerated the adoption and usage of innovative retail payment solutions, streamlining the need to digitize the whole value chain to drive cashless transactions. Behind these innovations we can find 5 forces pushing the future of payments, and by that extend Financial Services: Regulation, New Players, Technology, Customer Expectations and Macro trends

We are seeing how FinTechs and Non Fi players are delivering innovative solutions from Infrastructure to Last Mile payments. For me there are 6 big trends right now on this space:

1.      Instant Payments – transparent and immediate payments or transfers, pushed by P2P and instant payment schemes to fulfill customer expectations. Customer needs have changed, fueled by user’s experiences across other platforms pushing the adoption of immediacy and transparency.

Examples: Venmo, Cash app, Revolut, Nubank

2.      Analytics & Personalization – Data as new oil for companies, driving engagement through personalized experiences embedded on the payments journey. Non-cash payments are a true testament of users and businesses habits, activities, needs, obligations… Companies have understood the importance of mining transactional data to remain competitive, by creating and deliver tailored and personalized experiences to their clients

Examples: Cardlytics, Bink, Fidel

3.      Contactless Payments – Covid outbreak has pushed the adoption of noncash payments, accelerating the use of contactless solutions (NFC, QR…). We can’t argue that as result of Covid, there has been an acceleration in payments digitalization specially in regions where cash was still the king (US, Germany…). The new covid economy has pushed the need to pay for goods with no physical friction, forcing merchants to adapt their terminals to enable contactless transactions and changing customer’s behaviour towards cashless transactions

Examples: Visa, Mastercard, Paypal, AliPay, Paytm

4.      Biometric Payments – ubiquitous payments experiences, led by a need to reduce payment checkout frictions. It seems futuristic but in fact there are stores where users can purchase goods and not go through a cashier. I remember when I volunteer as an evaluator for BBVA Open Talent competition, my first company to review was a FinTech that allowed payment transactions via ultrasounds, something pretty innovative in the day although it was hard to compete with NFC tech

Examples: AmazonGo, WayletGo, Payrange

5.      Soft POS – Payment acceptance becoming more crucial than never. Reduce friction by building iOs and Android apps to transform smartphones into portable POS. Smartphone and internet penetration enables unbanked markets to join the payment innovation wheel. Recently we have seen how Apple has acquired Canadian SoftPOS company (Mobeewave), or how BBVA is testing its sofPOS solution working with german FinTech (Rubean).

Examples: Mobeewave, SoftPOS (Worldline), Rubean, Phos

6.      Buy-Now-Pay-Later (BNPL) – eCommerce has experienced a surge of activity, growing in H1'20 more than in last 5 years. Deferred payment companies have evolved, embedding seamless in the checkout journey. The simplicity and low rates of BNPL players have enabled them to achieve remarkable figures during this year.

Examples: Affirm, Afterpay, Klarna

The covid economy is pushing innovation through many angles, and it seems that all stakeholders are under the same page … digitalization is the only way moving forward ??