NatWest wants to be your first & last bank ??; The rise of Open Banking in Nigeria????; SumUp Snags Fivestars to go H2H against PayPal & Square ??

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Last week (11-15 October) was a super hot week in FinTech.?We will look at?NatWest wanting to be your first & last bank; the rise of Open Banking in Nigeria; SumUp's ambitions to fight with PayPal & Square, and other interesting news and developments.

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

NatWest wants to be your first and last bank ??

The news ???U.K. bank?NatWest?has acquired children’s allowance-tracking app?RoosterMoney. The financial terms of the deal were undisclosed.

The USP ???Launched in 2016, the?RoosterMoney?app loads pocket money onto a Visa debit card and allows parents to immediately freeze a card if it’s lost and block payments to specific merchants. It also gives parents and children real-time notifications on their spending and comes with a ‘contactless counter’ so children know how far away they are from having to next use their chip-and-pin.

Features on the app include reward charts and chore reminders to help encourage a savings habit from a young age.

What’s next??NatWest plans to integrate RoosterMoney’s?Star Chart,?Virtual Money Tracker, and?Chore Manager?into its own offerings in order to provide tools for families and children to learn to manage their allowance money and other funds.

Rooster has over 130,000 UK users and will be launched to NatWest customers in the coming months.

?? THE TAKEAWAY

Targeting the young.?As counterintuitive it might seem, the younger age groups in the UK overwhelmingly prefer to bank with traditional institutions like NatWest. RoosterMoney will hence allow it to better serve this growing cohort as they navigate through financial decisions. More importantly, 88% of parents felt support to help their children practice new skills in a safe space would be helpful, according to research conducted by NatWest. Therefore, engaging with users on useful and important topics at a young age could engender lasting relationships, and potentially position NatWest as a child’s first and last bank.

The rise of Open Banking in Nigeria????

The funding ???Mono, a Nigeria-based financial data startup, has raised a $15M Series A round led by Tiger Global.?

The venture capital firm has previously invested in Flutterwave and FairMoney in 2021. Existing investors Entree Capital, Lateral Capital, GPIC, Acuity VC, and Ingressive Capital also participated in the round, joined by new ones, including Target Global, General Catalyst, and SBI Investment.?

The USP ???Founded in 2020 by Abdul Hassan and Prakhar Singh, Mono is one of the startups—including OnePipe and Okra—that have created open banking solutions in Nigeria. Its technology enables businesses and individuals to gain access to financial information stored at commercial banks.

In Mono’s case, two products give it an edge, according to CEO Abdulhamid Hassan. First is,?DirectPay, a product that helps Nigerian businesses to collect bank transfer payments from customers within their web or mobile app without using their debit cards. Think of what Flutterwave and Paystack have done with cards; Mono wants to do that with bank accounts.

Next,?Statement Pages?allows businesses to access customers’ financial accounts without needing a developer; Hassan calls it the first of its kind in Africa.

The numbers ???Mono claims to have processed over 200M financial data transactions from over 270 businesses, developers, and FinTech.

The company also said it has connected over 150,000 bank accounts in the last two months and is growing 45x year-on-year in that regard. With around 30 staffers today, Mono doubled its headcount from the previous year.

?? THE TAKEAWAY

Open Banking is heating up.?Everywhere, including Africa. One must note though that more than 50% of the population in the continent is either unbanked or underbanked. Hence, open finance players in Africa like Mono thrive on the notion that access to a financial ecosystem via open APIs will improve access to financial information and lower entry costs for the underbanked.?This in turn should enable others to build on top and introduce innovative financial services. This space is definitely worth keeping an eye on.

SumUp Snags Fivestars to go head-to-head against PayPal & Square ??

The scoop ???SumUp, a European-based competitor to Square, PayPal/iZettle, and others that provide mobile-powered card readers and other sales technology to merchants and small businesses, has acquired?Fivestars, which provides loyalty, marketing, payments, and other services to small merchants

Numbers ???Fivestars is used by some 70 million consumers and 12,000 businesses in the U.S. London-based SumUp said it will be paying $317M in a combination of cash and stock for the San Francisco startup.

The exit ???The acquisition is a bump up on the startup’s valuation as a private company. According to PitchBook, Fivestars — which was originally incubated in Y Combinator and later backed by VCs that included Salt Partners, Lightspeed, DCM Ventures, Menlo Ventures, and HarbourVest Partners — was last valued at $285M post-money when it raised a Series D of $52.5M a year ago, in October 2020. Not that bad!

?? THE TAKEAWAY

All eyes on the US????.?At the core, SumUp’s Fivestars acquisition gives it a stronger foothold in the US, where its main competitors including?PayPal’s Zettle?and?Square?do a lot of business, and it’s their primary market. Moreover, SumUp can use Fivestars to broaden its POS solutions and attract more merchant businesses. Fivestars’ customer loyalty solutions can hence benefit SumUp, which doesn’t offer these types of small-business services, especially as many US merchants work to rebuild their in-store customer bases post-COVID-19 lockdowns. Finally, SumUp can also use Fivestars’ POS technology to enhance its own suite of POS hardware and potentially give merchants a broader array of payment tools to choose from for in-person transactions. PayPal and Square should definitely be watching this as the new kid is about to enter the town ??

Extra Reads & Quick Bites for Curious Minds??

• Neobanks are strong in Brazil?????Finder surveyed nearly 42,000 people across 30 countries to get a sense of how many use app-only banks (i.e. those available only via a smartphone app). Brazil came in first place with just over 32% of adults using an app-only bank, while Ireland came third, with nearly a quarter (24.8%) of adults having an app-only banking account.?We probably have to thank?Nubank?for that, right????
• FinTech IPO???? India-based FinTech?MobiKwik?has receiver market regulator Sebi’s approval to launch an IPO through which it plans to raise up to $252M. The company has filed the Draft Red Herring Prospectus for the IPO with Sebi in July 2021. Through the IPO, the company plans to offer shares aggregating to $252M.?
• Unsuccessful banking charter play ???Oportun, a specialist in low- to moderate-income lending, which services many Latinos, has withdrawn its application for a bank charter, PYMTS reported. The withdrawal was voluntary, and a report from the company says the CFPB was looking into claims that Oportun had violated consumer protection laws with its collection practices, especially those which centered around hardship treatments that the company gave during the pandemic. This follows Monzo, the British challenger bank, which has backed out of its effort to go after a U.S. banking license because it saw the OCC wasn’t likely to approve it.?Banking in the US is hard…???♂?
• BNPL spreading ???US-based payment service provider?Splitit?has announced it is offering instalment payments for?Discover Global Network?cardholders worldwide. The addition of Discover, Diners Club International, and network alliance cards to the instalment payment platform brings another card scheme to its portfolio of payment partners. Merchants can now offer shoppers the ability to use their Discover, Diners Club, or network alliance credit card at checkout with Splitit to spread payments over time. Splitit charges shoppers no additional fees or interest, letting them take advantage of payment instalments while earning the rewards that their credit card offers.?Who’s next????

Money Moves??

• Lassie, a pet insurance startup, has?raised a?€2M seed round.
• FinTech?Now?has received $29M in financing from a new credit facility and an additional equity investment led by Brigade Capital Management and Virgo Investment Group.
• Capital One?has acquired the staff and software of Boston travel tech startup?Lola?in an effort to boost its FinTech footprint in the Boston area.
• UK PropTech player?Goodlord?has acquired?acasa, a FinTech platform that allows tenants to manage household bills and split costs between housemates. Financial terms were not disclosed.
• Mondu, a new FinTech player set up by the founders of LatAm e-commerce startup?Dafiti, has tapped $14M in seed funding led by FinTech Collective and Cherry Ventures.
• Digital business banking startup?Open?raised $100M in a funding round led by Temasek, with participation by existing investors Tiger Global and 3one4 Capital and new backers Google, Visa, and SBI Investment.

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:

???The Perfect Pitch Deck: How Coinbase Raised Seed Capital and Began Journey Towards $100B Worth Public Company

???Cutting Through the Noise: Bitcoin Fundamentals & Why it Was Created

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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 the company's expansion into Europe, I'm an active member of the FinTech community and a TechFin evangelist.

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