Thiel Leads $52M Round in BitPanda; Amazon Debuts Hand-Scan Payments; Square Launches QR Codes

Last week (28 September - 2 October) was yet another interesting week in FinTech this year. Crypto-trading firm BitPanda has raised $52 million in its first funding round, led by Peter Thiel's Valar Ventures, cloud-based digital banking technology vendor Alkami has raised $140 million in a funding round led by D1 Capital Partners Amazon launched Amazon One, a biometric technology that'll allow customers to make contactless payments using hand-scanning technology, and more!

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

Thiel Leads $52M Round in Austrian FinTech BitPanda

Crypto-trading firm BitPanda has raised $52 million in its first funding round, led by Peter Thiel's Valar Ventures.

Founded in 2014, the Austrian neobroker currently claims 1.3 million customers who use its desktop site and mobile app to get access to up to 44 investment assets.

Bitpanda expanded to France, Spain and Turkey in 2020 and launched new payments and savings platforms.

The firm claims to be doubling revenues year-on-year and plans to recruit 70 new staff members by the end of 2020 to support increasing growth.

Eric Demuth, co-founder and CEO of Bitpanda, commented:

We’re democratising investing and giving everyone access to the financial markets, no matter their financial means. Our goal is to become the leading investment and trading platform in Europe, not only for the people who are already familiar with trading but for everyone. This funding will help us do just that and, crucially, continue to recruit some of the world’s leading talent to our team.

Alkami Nets $140M

Cloud-based digital banking technology vendor Alkami has raised $140 million in a funding round led by D1 Capital Partners.

Fidelity Management & Research, Franklin Templeton, and Stockbridge Investors joined the round for Texas-based Alkami.

The company clams over 160 bank and credit union clients, serving nearly 10 million customers, for its digital platform.

Mike Hansen, CEO, Alkami, said:

We inspire and power the digital strategies of financial institutions as they seek to grow confidently and build thriving digital communities.

Our clients are among the best performing and fastest growing FIs in the country, in part due to the strength and velocity of our platform, solutions and ecosystem.

Amazon Debuted Hand-Scan Payments to Expand its Retail Push

Amazon launched Amazon One, a biometric technology that'll allow customers to make contactless payments using hand-scanning technology.

Amazon One will allow customers, upon sign-up, to enter two Seattle Amazon Go stores using hand-scanning technology. Amazon is planning a wider rollout to its other retail locations and hopes to bring the technology to a range of third-party locations for a variety of different uses, including accepting contactless payments.

For example, Amazon says One technology could allow users to enter offices and stadiums, or authenticate loyalty cards at checkout. Although other firms like Fujitsu have launched similar biometrics products in the past, Amazon is the first major retailer to create and implement the technology in stores. 

Amazon plans to leverage the biometric technology to expand its payments, retail, and data collection capabilities. A Mastercard study found that more than half of US adults have turned to contactless payments since the onset of the coronavirus pandemic. Amazon can leverage that trend to appeal to customers wanting to use contactless payments in-store.

Furthermore, Amazon One helps remove friction during the shopping and checkout experience since customers won't have to pull out their cards or mobile devices for payment. And if One technology is coupled with Amazon Pay, Amazon could cut costs associated with implementing digital wallets in-store—since these firms usually take a cut of the transaction value—helping increase Amazon's overall revenue. Finally, One technology could also improve Amazon's data collection capabilities since it could gain more insight into customer purchases and use that information to market products to consumers, which could help boost Amazon's sales volume. 

However, the retailer may face customer and merchant adoption challenges:

• Customers may struggle to adapt to the new biometric tech. Many consumers are wary of adopting biometric technology, especially when it comes to payments, because of concerns about privacy and security. Amazon will need to work to minimize these concerns through customer education initiatives. Additionally, considering the novelty of hand-scanning technology, there may be misconceptions about how to use it. For example, customers may end up touching the hand-scanning sensors instead of hovering over it with their hands, which could deter further adoption from customers because of coronavirus concerns. So, Amazon may have to implement in-store initiatives to educate customers on how to use Amazon One.
• And merchants may not want to add One technology to their stores because they see Amazon as a competitor. Amazon says that it wants to deploy its One technology with a variety of firms for different use cases. And while retailers may want this technology to enhance the customer checkout and authentication experience, one major concern for retailers may be that Amazon could eventually poach customers from them and drive business onto its own marketplace—especially because the etailer has its foot in many different retail sectors. So, it could run the risk of merchants veering away from the technology for fear of getting too close to a competitor.

Square Introduced a QR Code Ordering Feature for Restaurants

Square introduced a QR code ordering feature, hoping to appeal to restaurants amid the pandemic.

The functionality is available for Square Online merchants and will enable self-serve mobile ordering for customers within restaurants.

Customers will be able to scan the QR code at their table or at point-of-sale (POS) terminals using their smartphone, which will take them to a mobile ordering page where they can place their food order. Orders are then sent to the restaurant's POS system, where they'll be relayed to the kitchen to be prepared. The new feature also integrates with Square's online payment system, Apple Pay, and Google Pay.

Square has added new digital offerings amid the pandemic to appeal to restaurants and boost its revenues. For example, Square introduced on-demand delivery integration that allows restaurants to more seamlessly work with third-party courier services during the pandemic.

As eateries try to adapt to the new normal and reopen after lockdowns, they're looking for more digitized and contactless processes—a need Square's new feature can meet. The feature might be popular among merchants looking to attract customers who want to minimize physical contact, and in turn might see robust uptake, making the offering popular and boosting revenues for Square. 

Square's QR feature could help it develop merchant loyalty and boost its digital payments volume, positioning it well in the competitive industry.

A new digital solution might help strengthen Square's value proposition to food and dining vendors, which brought in 26% of its volume in 2019. The feature's potential popularity amid the rise of contactless ordering could draw clients to Square over competitors as they fight to earn restaurant clients.

It could also prevent attrition from providers like Clover or PayPal—which also offer digital dining solutions—by adding value to a service restaurants are already using. The service's appeal could also be strengthened because QR codes are a cost-effective solution for merchants since they don't require additional hardware.

The mobile feature may also help drive up Square's payments volume. The pandemic has led to a rise in mobile ordering and payments to avoid contact. Since the new feature integrates Square Online payments, it could create more transaction volume from restaurants that use it and consumers who adopt the technology, in turn increasing overall revenues for the firm. 

Continue reading on other top stories and get the Weekly FinTech Digest to your inbox every Friday by subscribing to Connecting the Dots Newsletter.

Week in Brief

Crypto-trading firm BitPanda has raised $52 million in its first funding round, led by Peter Thiel's Valar Ventures.

Cloud-based digital banking technology vendor Alkami has raised $140 million in a funding round led by D1 Capital Partners.

Cloud-based digital banking technology vendor Alkami has raised $140 million in a funding round led by D1 Capital Partners.

Amazon launched Amazon One, a biometric technology that'll allow customers to make contactless payments using hand-scanning technology.

Square introduced a QR code ordering feature, hoping to appeal to restaurants amid the pandemic.

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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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