What’d I miss? News and Insights that got noticed - Week 10

Key themes this week (March 1 - 7)

• How Buy Now, Pay Later Became a Fintech Fixture, but not everyone is on board
• US neobank Dave achieves profitability over Q4 2023
• British neobank Monzo raises $430 million in Alphabet-led round to relaunch in the U.S.
• NatWest ditches BNPL

How Buy Now, Pay Later Became a Fintech Fixture

"...Buy Now, Pay Later (BNPL) Technology has Revolutionised the E-Commerce Industry in Recent Years – but Many Believe Tighter Regulation is Imperative…”

Key takeaways:

• BNPL is popular with consumers because it offers convenience, flexibility, and the ability to spread payments over time
• However, there are also risks associated with BNPL, such as late payment fees and potential debt spirals
• Regulators are taking a closer look at BNPL, and some jurisdictions are considering new rules to protect consumers
• POLL results: I asked my LinkedIn network How do you feel about Buy Now Pay Later (BNPL)? And are you using it? 42% has used BNPL, 19% not yet and 38% is against it (and presumably hasn’t used it)

LinkedIn Post

LinkedIn POLL

US neobank Dave achieves profitability over Q4 2023

“…Operating highlights for Q4 show that the neobank totalled 683,000 new members, with customer acquisition costs down 12% versus Q4 2022. Its total number of monthly transacting members also surpassed just over 2 million. Year-on-year, total debit card spending also grew by 41% to $369 million..."

Key takeaways:

• The neobank generated a GAAP net income of $200,000 in Q4 2023
• This is after a combined loss of $48.7 million in GAAP net income across the preceding three quarters
• Other financial highlights include a 26% increase in GAAP net operating revenues and 41% growth in total debit card spending

LinkedIn Post

British neobank Monzo raises $430 million in Alphabet-led round to relaunch in the U.S.

"....Monzo raised the money in a new funding round led by CapitalG, the independent venture arm of Google parent company Alphabet Inc.. HongShan, the Chinese venture capital firm that split from Sequoia Capital last year, also backed the round, alongside existing backers Tencent and Passion Capital....”

Key takeaways:

• Monzo will use the money to accelerate its expansion plans, including relaunching its services in the U.S.
• Monzo previously tried launching in the U.S. in 2019, but it was forced to abandon its plans after a two-year regulatory battle
• The company has since opted to focus on re-entering the U.S. with a partnership that would allow it to bypass the requirement of getting a full bank license

?LinkedIn Post

CFPB may take legal action against Block

"...The bureau has informed the digital payment company it’s weighing legal action related to a Cash App probe...”

[editor note: yes this news was still getting noticed two weeks in...]

Key takeaways:

• The CFPB has been investigating Cash App for allegedly mishandling customer complaints and disputes
• Block has received several investigative demands and subpoenas from the CFPB and attorneys general in multiple states
• Block says it is cooperating with the investigations and is committed to providing its users with a safe and secure platform
• In the meantime, Cash App continues to grow, with 56 million monthly active users as of December

LinkedIn Post

NatWest ditches BNPL

"...The bank will begin closing BNPL accounts from May after lower than expected take up, according to The Sun. "We are focusing on our core lending products, helping customers spread the cost of their purchases through our credit cards, overdrafts and loans. This means our Buy Now Pay Later proposition will be closing," says a spokesperson...."

Key takeaways:

• The bank will begin closing BNPL accounts in May
• NatWest cited low usage as the reason for the decision
• The use of BNPL has been growing in recent years, but it is still a relatively new phenomenon

LinkedIn Post

Elon Musk: AI will run out of electricity and transformers in 2025

“….I've never seen any technology advance faster than this." The chip shortage may be behind us, but AI and EVs are expanding at such a rapacious rate that the world will face supply crunches in electricity and transformers next year, says Elon Musk…”

Key takeaways:

• AI is advancing at an unprecedented rate and? Elon Musk believes that the world will face supply crunches in electricity and transformers in 2025 due to the growth of AI and electric vehicles
• He thinks we will soon run out of transformers to run transformers, and there will be a shortage of electricity. Musk believes that we need to focus on clean energy generation to meet the growing demand for electricity
• The simultaneous growth of electric cars and AI, both of which need electricity, both of which need voltage transformers, is creating a tremendous demand for electrical equipment and for electrical power generation

LinkedIn Post

Check this out:

If you just want to listen to the What’d I miss Top 3 from last week you can watch this video…?

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