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Saturday, November 26, 2022

The Fintech Fix – October 5th 2022

Welcome to The Fintech Fix on October 5th 2022, where we cover the biggest fintech stories of the working week. Whether it’s the next groundbreaking trend in crypto, or a new partnership that’s about to change the global economic landscape, this is the place to keep up with the breaking news of the future. 

Product Expansions for the Modern Web

Whispers of the obscure Web3 have littered the halls of fintech for the last couple of months. What started as a fun hypothesis for the future, may have finally gained traction in this week’s deals and expansions. 

Last week, the DFINITY Foundation, a Zurich-based NGO currently developing the Internet Computer (IC) blockchain, launched HTTPS outcall functionality to the IC in the form of a functional beta feature. This will allow smart contracts to make HTTP calls from inside the blockchain, to external centralised Web 2.0 services, processing a result decided by network consensus. Creating this bridge for blockchain-enabled services to securely access financial data is crucial to the development of new web technologies. Companies will no longer need to battle through intermediaries like oracle services, to build their products. The IC is one of the few trailblazers providing the scaffolding to realise the dream of Web3. 

On the topic of potential, we move to Africa and the effervescent payment ecosystem they have created through the avenue of mobile money. In a recent episode of The Paytech Show, we caught up with Diego Gutierrez, the Chief Officer of International Markets at Vodacom, to talk about M-Pesa, Africa’s largest payment app

“When I arrived in Africa 15/16 years ago, one of my first encounters was with M-Pesa. At that point, I wasn’t sure about it, but a few days later, everyone was asking me to pay them with M-Pesa, instead of cash,” detailed Gutierrez. “Then I started to see how embedded this was, and we’re talking 15 years ago and it was already embedded in everyone’s life. And this is people at all levels of the socioeconomic ladder: a gardener was taking payments with M-Pesa, at the same time, companies were taking salaries in M-Pesa.” 

Smartphone or not, mobile money is rapidly becoming the favourite payment method for the great continent, and with this ease and accessibility in delivering financial services en masse, it is very much here to stay. 

Every day brings a new opportunity for neobank darling Revolut, who have now given us a glimpse into their scrupulous spend data of business customers of Revolut Business. With a decrease in funding and the recession, businesses are suffering, Revolut has found that SME customers are cutting back their advertising spending by 20%, but amping up Software subscriptions by 13%. This fluctuation is present in all scales of business, the move to more resourceful technology solutions which can support businesses in streamlining their operations. 

Collaborations in New Money 

A mark, a yen, a buck or a… (given the current state of affairs, not a pound) is all that makes the world go round. Fintech partnerships across the globe have cosigned this notion with their commitment to shifting the payments game, from how we see them, to how we deliver them.

Foreign exchange service provider, Travelex, has joined forces with cross-border fintech Nium, to launch Travelex International Money Transfer, a digital remittance product for users in Japan. Already a staple in Australia, Hong Kong, and Singapore, Travelex customers in Japan will be able to remit funds in over 50 markets instantly from their mobile and PC, with the power of Nium’s global payment rails and real-time payment capabilities. 

Jun Otani, Managing Director, Travelex Japan says, “In partnership with Nium, we have launched an online international money transfer service in Japan. We are very pleased to be able to launch new services in addition to our current offerings such as foreign currency exchange, foreign currency prepaid cards, and international remittance agency operations at stores. With this new service, you can send money internationally using your computer or smartphone without having to visit one of our physical stores. 

Big data has also claimed a win for partnerships, as tech modernisation service onepoint confirmed its intent to acquire Atos Digital, along with their Digital and Big Data and Security businesses, which will merge into the single entity Evidian. This $4.2 billion enterprise will see the new company focus succinctly on company management, with key expertise in cloud technology, business architecture, big data and cybersecurity. For all players involved, the acquisition would allow the deployment of €1 billion over four years to fund transformation investments, and the passage to foreign in North America, Europe, North Africa and the Asia Pacific.

Moving on to the cryptosphere, money-saving app Plum partners with investing platform Bitpanda, to open up crypto floodgates to Plum customers in Europe. To keep up with the growing demand in this region, the partnership will see Bitpanda’s API solution fully integrated into the Plum app, so customers will have 24/7 access to all of Bitpanda’s investing services directly from Plum. 

“It’s our ambition to provide access to a broad range of assets for our customers so they can properly diversify their investment portfolios and support their growth over the long-term,” said Victor Trokoudes, the CEO and co-founder of Plum. “We’re delighted to work with Bitpanda, a digital asset leader, so our customers can now also access crypto in a secure, convenient and simple way, alongside our existing, broad range of stocks and funds. We have a shared mission of a more accessible and informative financial system that helps people get the most from their money

The return of the $100 million deal? 

Funding in July and August was almost as tumultuous as the violent weather. Yet, with every atmosphere, with some attention and actionable steps, prosperity can bounce back. Embedded finance platform Liberis, secured an astonishing £140m in financing from Barclays Bank PLC and BCI Finance, in aid of its global partnership growth and expansion plans for the next 2 years. This tallies the fintech’s overall net investment to £350 million, £80 million of which is in equity funding. 

Liberis intends to use the funds to further develop and scale its financial solutions in machine learning and risk analysis for small businesses. Their solutions have already facilitated the funding of almost $1 billion to over 21,000 SMEs in Europe and the U.S., in over 50,000 transactions. 

Open banking platform Currensea has also amassed a burgeoning amount of funding to the tune of £2.4m from leading Venture Capitalists Blackfinch Ventures and 1818 Venture Capital. Like Liberis, the investment will be used to further Currensea’s growth and expansion plans. The year has been good to fintech, as this year saw cardholders double to 45,000, and their Seedrs crowdfunding secured a promising £2 million in funds, far exceeding their target of $1 million. Initial expansion plans will start in-house, with the company focusing on hiring, and developing a bigger team for their next customer goal of attracting 300,000 new users by 2024. 

James Lynn, Co-Founder of Currensea, said: “This latest investment – which follows a hugely successful crowdfunding campaign earlier this year – is further evidence that there is a strong demand for an alternative to the foreign exchange trap that we’ve all been forced to endure for too long.

Lynn’s sentiments ring absolutely true in the ambitions of the wider fintech community. Companies like Currensea, M-Pesa, and Travelex are creating payment solutions which are appropriate for a global audience. Financial institutions need to unify payment systems and provide secure rails where businesses and individuals do not need to get through third parties to send and receive money. These changes are happening now with the introduction of ISO 20022 and payment solutions prioritising real-time cross-border payments – bringing people closer to a truly global ecosystem. 

That concludes your weekly Fintech Fix! Stay tuned for another round of big fintech buzz, right here at FF News

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