New York to Ban Cashless Stores, Klarna Nets $200M & Launches in Australia, N26 Now Has 250,000 Customers in US, Currencycloud Raises $80M

This week (27-31 January) was super interesting and really exciting one in the world of FinTech. New York City Council has voted to ban cashless stores and restaurants, arguing that they discriminate against the unbanked, London-based B2B cross-border payments outfit Currencycloud has raised $80 million in a Series E funding round, Holvi, the BBVA-backed banking service for small traders, is to launch in the UK, and much more.

Without further ado, let us dive into what has happened in the financial technology sector this week.

New York to Ban Cashless Stores

New York City Council has voted to ban cashless stores and restaurants, arguing that they discriminate against the unbanked. The council voted to pass a bill requiring brick and mortar outlets in the city to accept US bills and coins or face fines of up to $1000 for a first violation and $1500 for further incidents.

Mayor Bill De Blasio is expected to sign the bill, his office told CNN. Cash usage is on the wane in many areas as Americans increasingly use cards and mobile payment options such as Apple Pay at the point-of-sale. This has prompted some businesses to ban cash, which is expensive to handle, outright.

However, there has been a pushback against the trend, with opponents arguing that it discriminate against the unbanked, poorer members of society that do not have access to credit cards or bank accounts.

New York is following in the footsteps of Philadelphia and San Francisco, while moves are also underway to outlaw cashless stores in Washington and Chicago.

New York City Council member Ritchie Torres, said:

No longer in NYC will brick-and-mortar businesses have the right to refuse cash and effectively discriminate against customers who lack access to credit and debit. 

The City of New York cannot allow the digital economy to leave behind the 25 percent of New Yorkers who are chronically unbanked and underbanked. The marketplace of the future must accommodate the needs of vulnerable New Yorkers.

Currencycloud Raises $80M

London-based B2B cross-border payments outfit Currencycloud has raised $80 million in a Series E funding round joined by blue-chip investors such as Visa, BNP Paribas and Siam Commercial Bank.

International Finance Corporation (a member of the World Bank Group) and SBI Group also joined the round alongside existing backers Sapphire Ventures, Notion Capital, GV, Accomplice, and Anthemis.

Since its launch in 2012, Currencycloud has processed more than $50 billion in cross-border payments. Last year it signed Visa as a client, adding to a list that includes major banking and FinTech brands such as Monzo, Revolut and Dwolla.

The firm says it will use the funding to expand its portfolio of payment methods and develop its partner ecosystem. And, having signed SBI and Siam up as investors, Currencycloud is now looking to expand in Asia, as well as North America.

Finally, the company is planning to invest in talent, with CEO Mike Laven insisting that this will include, despite Brexit, a growing UK team.

Laven commented:

Transfer of value is fast becoming the newest layer in the modern technology stack, and Currencycloud is positioned to provide the infrastructure to make this happen. With these new strategic investors, we are well placed to be the go-to provider for the next wave of FinTech innovation.

Julius Baer Launches Digital Assets Service

Swiss wealth an management firm Julius Baer has launched a digital assets trading and storage service through a partnership with Finma-licenced Seba Bank.

Julius Baer first announced its intention to move into the crypto space in February last year, conditional upon Swiss startup Seba - in which Julius Baer holds a minority equity stake - being granted a banking and securities dealing licence by financial markets regulator Finma.

Founded in April 2018 by former UBS bankers, Seba duly received the regulatory go-ahead in September last year.

Julius Baer now offers its clients booked in Switzerland a selection of digital assets trading and custody services alonside consolidated portfolio overviews across both conventional and digital assets.

Holvi to Launch Freelance Banking Service in the UK

Holvi, the BBVA-backed banking service for small traders, is to launch in the UK.

Headquartered in Helsinki, Finland, the launch will see Holvi expand its European presence to Great Britain, sitting alongside its other core markets of Germany and Finland and further operating countries like Ireland, Belgium, France, Italy and the Netherlands.

The all-in-one payment account comes with a business Mastercard, and enables small traders to keep on top of their business through a suite of bookeeping tools. Co-founded in 2011, the business currently supports 200,000 customers. It was acquired by BBVA in 2016.

The UK launch will see it targeting Britain's 5.8 million SMEs - 76% of whom are solo traders. 

CEO Antti-Jussi Suominen commented:

The UK is one of the most important markets for fintechs and has always been known as a nation of sole traders. They are the backbone of the economy, and we genuinely believe that the banking market for microbusinesses is underserved and ineffective - it simply doesn’t work for a lot of businesses. For most people, their business is personal and therefore they need a tailored, personal solution from their banking partner - something Holvi delivers.

SoftBank Leads $125M Round in Latin America's AlphaCredit

SoftBank has led a $125 million equity financing round in Latin America small business lender AlphaCredit.

AlphaCredit provides fast, cheap credit lines to individuals and small companies via a programmed deduction system. Operating in the Mexican and Colombian markets, the company has granted over $1 billion in loans to small business clients underserved by traditional banks or without access to other forms of financing. 

Augusto álvarez, co-founder and Co-CEO of AlphaCredit, said:

Cutting edge technology and strong financial backing have allowed us to grow exponentially while promoting the economic development of a greater number of people that have limited access to credit.

Other international venture capital funds along with a group of its existing investors have joined with Softbank in this Series B round.

Crédit Agricole Acquires Majority Stake in Account Aggregation Vendor Linxo

Crédit Agricole has acquired a majority stake in bank data aggregation and payment initiation vendor Linxo for an undisclosed amount.

Founded in 2010, the French FinTech player provides APIs and complete white label apps for banking and insurance start-ups. With the EU PSD2 Directive in force, Crédit Agricole says the transaction creates opportunities for new digital and innovation services based on financial data for the retail, professional and corporate customers of the bank.

Bertrand Chevallier, CEO of Crédit Agricole Payment Services, commented:

The acquisition of this major banking aggregation player in France, a long-time partner of the Crédit Agricole Group, represents a major contribution in terms of technology that will enable the Group to take full advantage of the innovation opportunities offered by changes in regulations.

Linxo's mobile account aggregation and budgeting app currently has more than 3 million users in France. The company has 81 employees, based mainly in Aix en Provence and the Crédit Agricole Villages in Paris and Sophia Antipolis.

N26 Now Has 250,000 Customers in US

Berlin-based banking startup N26 claims to have recruited 250,000 new customers in the US, just six months after opening its doors Stateside.

The digital banking app now now boasts five million customers, a significant increase from its 3.5 million users last summer, with European markets proving the most fertile region for growth. With the US launch, operated in partnership with Axos Bank, N26 scents further opportunities for growth.

“American consumers are too reliant on traditional banks and face roadblocks to their financial health that have no place in the 21st century,” says Nicolas Kopp, US CEO, N26. “We’re incredibly proud to have reached a quarter-million US customers in our first five months and we are just getting started. We have big plans to offer millions of future N26 users a feature-rich, easy-to-use banking experience.”

Boasting a workforce of almost 1500 employees, N26 raised $470 million in equity financing last year, which bolstered its launch in both the US and Switzerland, as well as funding the opening of a new tech hub in Vienna.

Barclays Buys Minority Stake in Digital Receipts Company Flux

Barclays Bank has made a strategic investment in UK digital receipts startup Flux.

Flux plugs into banking apps and is currently available for customers of Barclays via Launchpad, Starling Bank and Monzo Bank. Customers linked to the app receive digital receipts and loyalty coupons from retailers signed up for the service. 

Founded in 2016, Flux was accepted on Barclays London-based fintech accelerator programme, Rise, and graduated from the programme in 2017 after proving the product’s viability for both retailers and consumers. Flux has since struck up deals with merchants across sectors including Just Eat, Papa John’s, schuh, KFC and Itsu.

The digital receipts platform has now delivered more than one million receipts to customers across the UK, having started the year with fewer than 30,000 - an increase of more than 3,000% in one year.

The relationship with Barclays will unlock fresh growth potential for Flux, providing access to the UK bank's considerable merchant customer base.

Ruchir Rodrigues, Barclays' Global Head of Digital & Platforms said:

Flux’s innovative technology provides a practical and straightforward solution to an everyday problem for both shoppers and merchants. 

We have worked closely with Flux since 2017, and we’re excited to continue supporting them in their next stage of growth through this strategic partnership.

The firm in December raised $7.5 million in Series A funding led by venture capital outfit e-ventures with participation from existing backers PROfounders and Anthemis.

Klarna Nets $200M & Launches in Australia

Buy now, pay later outfit Klarna has officially launched in Australia, backed by a further $200 million investment from Commonwealth Bank of Australia. Commonwealth Bank customers will be the first to try out the online shopping service through direct integration with CBA's mobile banking app. 

Purchased items will show up in the CommBank app and customers will also be able to take advantage of price drop and out of stock notifications directly from Klarna. Klarna will also be available to non-CBA consumers.

CBA CEO Matt Comyn said:

By partnering with Klarna, we are bringing together our market leading digital technology, merchant relationships and strong customer network with Klarna’s innovative payments technology and integrated shopping experience for the benefit of CBA customers and many more Australian consumers.

In August last year, Klarna raised $460 million in an equity funding round, including a $100 million investment from CBA. The new funding from the Australia bank brings additional rights and exposure to Klarna’s international growth. 

The total funding raises the bank's shareholding in the Swedish fintech to 5.5% from its initial 1.8% stake. CBA and Klarna will jointly fund and have 50:50 ownership rights to Klarna’s Australian and New Zealand business. CBA also retains a right to partner with Klarna in Indonesia.

Citi Rolls Out Digital Investment Tool

Citi's consumer business has introduced a digital wealth investment tool for clients with as little as $1500 to invest.

Citi Wealth Builder matches customers to one of six portfolios based on their responses to questions ranging from their level of comfort with market volatility to their retirement goals and how much they’ve saved to date. Customers can adjust their investment levels with a real-time view of how those changes may affect their goals.

Once the account is open, Citi Wealth Builder takes it from there, monitoring and automatically rebalancing diversified ETF portfolios designed and managed by investment experts. Customers may follow their accounts online or in the Citi Mobile App, with live support available 24/7.

“Citi Wealth Builder makes it easy for clients to start investing so they can reach the next level of their financial journey,” said John Cummings, Head of Citi U.S. Consumer Wealth Management. “It’s part of Citi’s holistic approach to banking and wealth management. In just a few minutes, customers can start building a solid foundation for years to come.”

Citi customers can start using the new digital platform with a low initial investment of $1,500 and no advisory fees for Citi Priority and Citigold clients on their initial portfolio. Additional accounts have a low advisory fee of 0.55%.

The digital advisory tool was developed in concert with Jemstep, a subsidiary of Invesco.

“Jemstep is proud to partner with Citi to provide personalized, goal-based wealth advice to their clients,” says Simon Roy, president and CEO of Jemstep. “We have worked closely with Citi to configure the Jemstep digital advice platform to provide a compelling client experience that supports Citi’s unique value proposition, omni-channel delivery capabilities and robust operational and compliance requirements.”

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

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