PayPal Buys Returns Logistics Provider Happy Returns; Marqeta Files to Go Public; Google Partners with Shopify

Hey, ?? fellow FinTechers! What a week it was in Finance & Technology... The best Weekly FinTech Digest yet is out!

P.S. Before we dive into what happened in FinTech last week, check out my Newsletter, where you will get much more. Every Week????

Last week (17-21 May) was a super interesting and intense week in FinTech. PayPal has acquired Happy Returns for its all-in-one e-commerce push; Marqeta filed for an IPO revealing very interesting numbers; Google partnered with Shopify to further strengthen their e-commerce positions, and other super interesting news and developments.

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

PayPal Buys Returns Logistics Provider Happy Returns

PayPal is acquiring Happy Returns, a returns solution provider that offers online shoppers access to easier ways to send back unwanted merchandise to retailers without having to box it up and ship it themselves.

Founded in 2015, the company today offers a network of more than 2,600 drop-off returns locations in the U.S., including those in over 1,200 metros and in every U.S. state, according to TechCrunch.

It also has relationships with hundreds of brands that have been using its returns software and reverse logistics services. The company says it will continue to offer its returns experience to online retailers and shoppers as a part of PayPal.

One must note that PayPal made a strategic investment in the business in 2019, as part of an $11 million financing round.

THE TAKEAWAY

The acquisition of Happy Returns is a strategic step for PayPal towards becoming an all-in-one commerce platform. Additionally, it will strengthen PayPal’s business in two core ways. First, by strengthening merchant relationships as returns are a major hassle for customers and can strain merchant logistics and cash flows. Second and more important, is the fact that this move will further strengthen PayPal’s competitive edge and hence enable the payments giant to attract new merchants and customers to its platform. In Q1 this year alone, the firm reached 392 million accounts, 31 million of which were merchant accounts. Having an all-in-one e-commerce proposition is going to make PayPal a place to go for all things commerce.

Marqeta Files to Go Public

API-based issuer-processor Marqeta recently filed paperwork for an initial public offering with the Securities and Exchange Commission (SEC).

Founded in 2010 and based in Oakland, California, Marqeta sells payment technology that’s designed to detect potential fraud and ensure that money is properly routed. The company issues customized physical cards that look like credit and debit cards, which contractors from DoorDash or Instacart use to make point-of-sale purchases from restaurants or supermarkets.

Many of Marqeta’s top customers are coming off record years as the pandemic pushed commerce to mobile devices. In addition to meal-delivery companies, Marqeta powers Square’s debit card for small business owners and its popular Cash App for peer-to-peer payments. Affirm and Klarna, which provide small-dollar lending to consumers for purchases like bikes and TVs, use Marqeta’s technology to move money with their installment loans.

THE TAKEAWAY

Marqeta is one of the hottest FinTech stocks to enter the public markets but… There is some caution. First and foremost, it must be noted that 70% of its Net Revenue in 2020 came from a single client - Square. Marqeta itself warned that any reduction in its business with Square could have an adverse effect on its own business. Furthermore, Instacart and DoorDash were another two of Marqeta’s key clients that helped drive up TPV in 2020. Consumers obviously leaned into online grocery and on-demand delivery services during the pandemic, but Marqeta conceded that as the pandemic subsides and Instacart’s and DoorDash’s businesses normalize, it could see a slowdown in growth. Hence, to continue its growth trajectory, Marqeta will need to diversify its business and find new expansion opportunities.

Google Partners with Shopify on Online Shopping Expansion

Google and Shopify did a new integration deal to bring Shopify merchants to Google’s “shopping journeys” as the search giant forges ahead with its e-commerce ambitions.

At the core of the deal, Google will be giving the e-commerce platform’s more than 1.7 million merchants the ability to reach consumers through Google Search and its other services.

The integration will thus allow merchants to sign up in just a few clicks to have their products appear across Google’s 1 billion “shopping journeys” that take place every day through Search, Maps, Images, Lens, and YouTube.

The company didn’t offer extensive details about the integration when it was announced during Google’s I/O Developer event. But the news follows a series of updates to Google Shopping resulting from Amazon’s increased investment in its own advertising business, which threatens Google’s core ads business.

THE TAKEAWAY

Google wants more e-commerce, and that’s where Shopify comes in. Shopify brings with it 1.7 million merchants who, as part of the deal, can sell their products across Google’s shopping journeys, including Google Shopping for free. Not only it will give Googe a bigger piece of e-commerce, also it should contribute towards ad dollar spend, which has been slowly taken by Amazon over the years. All in all, investors seemed happy with the Shopify news - shortly after Google’s announcement, the stock popped 3.52%.

Extra Reads & Quick Bites for Curious Minds??

• Sherry Ann Mohan, CFO at Goldman Sachs for its consumer unit, is exiting the bank to join JPMorgan Chase as its new CFO, CNBC reported on Friday, citing an internal memo. At Goldman, Mohan was in charge of the Marcus brand and the Apple Card.
• Personal finance company NerdWallet has privately provided American regulators with documentation to go public, Reuters.
• An Uber Technologies executive has been hired away by Goldman Sachs to operate the latter company’s digital banking division, Marcus, The Wall Street Journal reported.

??Money Moves??

• Green Dot Corporation will buy the “assets and operations” of Republic Bank & Trust Company’s Tax Refund Solutions (TRS) business segment for $165M under an agreement between the two companies.
• Pine Labs that serves merchants across Asia and the Middle East has secured $285M in a new round of financing.
• Stripe has acquired Bouncer, a card authentication technology company that is seeking to reduce fraud during online transactions.

Quote of the Week/Food for Thought??

“We’re not really a bank,” they say…

Graph of the Week ??

Marqeta’s transaction economics.

Week in Brief

PayPal is acquiring Happy Returns, a returns solution provider that offers online shoppers access to easier ways to send back unwanted merchandise to retailers without having to box it up and ship it themselves.

API-based issuer-processor Marqeta recently filed paperwork for an initial public offering with the Securities and Exchange Commission (SEC).

Google and Shopify did a new integration deal to bring Shopify merchants to Google’s “shopping journeys” as the search giant forges ahead with its e-commerce ambitions.

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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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