Stripe dives deeper into digital currencies w crypto payouts??; Open Banking is much greener than card payments???; Digitizing school pay in Africa ??

?? 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 this week:

1. FinTech Bank of the Future from Plaid’s co-founder ??
2. 2 Bitcoin graphs you need to know today (and what they mean) ??
3. Why does everyone want to work in crypto? ??

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

Last week (25-30 April) was another super exciting and hot week in FinTech.?We will look at Stripe's brilliant timing as it dives deeper into digital currencies with crypto payouts; see whether Open Banking is much greener than card payments?; a FinTech startup that's digitizing school pay in Africa, and other interesting news and developments.

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

Brilliant timing: Stripe dives deeper into digital currencies as it launches crypto payouts ??

The news & partnership ?????$95 billion FinTech giant?Stripe?is piloting a new crypto payouts feature with?Twitter?as their first customer, letting creators on the social media app collect their earnings in the USDC stablecoin.

More on this ???The payments giant has added crypto payouts to Connect, its programmatic (API-based) payouts platform. Companies like Twitter already use Connect to power various monetization services aimed at creators which include things like Tips, Super Follows, and ticketed Spaces events. Connect is available in local currencies already in 70 countries.

Here’s what crypto twist will add to Stripe’s Connect suite:

• Eligible users of Twitter's Ticketed Spaces and Super Follows monetization products will be able to receive their earnings in USDC, the stablecoin issued by Circle.
• Payouts will take place over the Polygon network, which Stripe reportedly chose for its low fees, speed, integration with Ethereum, and wallet compatibility with the likes of MetaMask, Coinbase Wallet, and Rainbow.
• Once creators receive their earnings, they can hold their balance on Polygon, or choose to bridge to Ethereum and exchange it into another currency.
• Stripe says it plans to add support for additional rails and payout currencies over time and to bring the service to other businesses.

The crypto pivot ???We can remember that just last month Stripe released a series of APIs and other tools for developers to start integrating Stripe’s crypto features. It includes support to use fiat to buy more than 135 crypto tokens, cash-out facilities (=payouts), NFT trading, and compliance features like Know Your Customer (KYC) (crypto exchange FTX was onboarded as the first customer), among other things.

What does it mean? ?? Stripe?was one of the first payments companies to support cryptos back in 2014, but the firm stopped 4 years later due to limited merchant and user adoption. Now it’s reentering the space big time, and both the timing & Stripe’s position are brilliant. Here’s the takeaway:

?? THE TAKEAWAY

Staying in the game.?First and foremost, we must stress that the timing of Stripe’s re-entry into the digital assets space is brilliant as it is uniquely positioned to leverage its brand and market dominance. Global ownership of crypto rocketed 881% in 2021, according to Chainalysis data while the Biden administration signed an executive order on cryptocurrencies back in March that signaled broader future oversight of the industry. Hence, Stripe's crypto service launch will not only help it keep pace with the competition (payments giants like PayPal, Visa, MasterCard, and Block have all dipped their toes in the crypto space in 2021) but also will boost the payment giant’s revenues. Furthermore, Stripe’s solid API tool kit and developer-first approach will open the door for other companies looking to build or improve their digital asset-related products further boosting Stripe’s bottom line. Zooming out, the Web3 focus might be one of the catalysts that should help Stripe’s growth and boost the $95B price tag even further.

Open Banking is much greener than card payments? ??

New data ???Open banking payments seem to generate 4X fewer carbon emissions than cards, according to?GoCardless?study.

More on this ???According to new research from payments company?GoCardless, a typical card transaction generates around 0.53 grams of CO2 emissions versus 0.13 grams for account-to-account payments,?AltFi?reported.

The reason is the convoluted eight stages involved in a typical card transaction, as data bounces between the merchant, payment processor, card provider, and bank.

This effectively means that card transactions are responsible for over 400,000 tonnes of carbon emissions each year, and hence switching to account-to-account payments could reduce that to just 100,000 tonnes.

?? THE TAKEAWAY

OB could be the future.?While you always have to take such research with a grain of salt (because companies like GoCardless are very eager to move you to account-to-account payments), this study, if representative, is yet another proof of where the future of payments (and finance) might be heading. Not only does it mean that there’s a lot of innovation to be unlocked with the help of OB, but it’s clear that how we pay for things can play a part in making our future more green, irrespective of whether it’s A2A payments or not. And we will make it! ??

Digitizing school pay in Africa ??

The news ???Zenda , a UAE-based startup looking to change how parents pay school bills, and the way educational institutions manage fee collection, has raised $9.4M seed funding and is eyeing Africa as its next frontier for growth.

The USP ???Founded in 2021, Zenda allows parents to pay fees directly to schools, all while streamlining collections by enabling schools to accept and manage payments online. This means that parents no longer need to provide bank deposit slips as proof of payment because all transactions on Zenda happen in real-time.

The startup also has an embedded financing option that extends tuition fee credit to parents on a flexible repayment structure.

The numbers ???Zenda has witnessed strong market traction with schools and with families. Its user base grew 20X since June 2021 and crossed $100M+ in annual contracted TPV volume by Q4 2021, across UAE and India.?Not too bad!

?? THE TAKEAWAY

The (huge) opportunity.?There are approximately $37B processed annually in fee payments to private educational institutions in the GCC, $34B in the rest of the Middle East and Africa, and $70B annually in India. Hence the market (TAM) of Zeda is very sizable yet largely untapped. Furthermore, fee payments in schools (nurseries - K12 - tertiary) are mostly non-digital, and even where digital, are cumbersome, manual, and expensive. Also, the majority of families earn monthly but fee payments are usually termly or bi-annual, resulting in cash flow stress for parents and collection delays for schools (= think here about Study Now, Pay Later). Zenda is here to help & solve that. Definitely watch them out.

Extra Reads & Quick Bites for Curious Minds??

• RegTech on the rise ???A new study from Juniper Research has found that global RegTech spending will exceed $204B by 2026, accounting for over 50% of all regulatory compliance spending for the first time. This spend will grow from USD 68 billion in 2022, representing a growth of over 200% over the next four years. The report identified the integration of RegTech services with Banking-as-a-Service (BaaS) models as key to realizing this future market growth. The new research,?Regtech: Emerging Trends, Regulatory Impact & Market Forecasts 2022-2026 , predicts that BaaS models, which include outsourcing RegTech services such as digital onboarding, will be key in accelerating AI-based automation for online document verification and Know Your Customer (KYC) processes.
• Cross-Border Real-Time Payments?! ???Yup, that might be possible very soon.?A pilot program for immediate cross-border (IXB) payments is being launched by EBA CLEARING, SWIFT, and The Clearing House (TCH), garnering banking support from the U.S., the U.K., and western Europe, according to a press release. Anticipated to launch before the end of 2022, the pilot will be introduced in phases to accommodate 24 financial institutions, some of which are joining the pilot. The three private sector firms owned by member banks are developing the pilot as part of their IXB initiative to enable faster, smoother global money transfers by tapping options available in domestic payments. The initial proof of concept was finished last October with input from seven banks. Eleven financial institutions participated in the design of the system.?With proper execution, it could potentially challenge Wise, Remitly, and other players in the IMTO space. Read more?here .

Money Moves??

• Germany-based FinTech?Moojo ?has announced successfully closing its pre-seed financing round of $2M and entering the market with an instant payment solution connected with a free invoicing tool.
• Nigerian FinTech startup?Afriex?raised?$10M for its blockchain-based money transfer platform.
• Global payments company?Payroc WorldAccess ?has acquired?Worldnet , which provides payment solutions for independent software vendors (ISVs).

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:

?? Bitcoin in 2021: a story in 5 graphs, and what might come in 2022

???A Wise pitch deck that led to London’s biggest and most successful direct listing ever

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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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