The Fintech Fix – Weekly Roundup 27/10/2021
The Fintech Fix, Week 2:
Welcome to the second week of The Fintech Fix, where we cover the biggest stories of the financial week! Whether it’s the next groundbreaking advancement in Blockchain technology, a new CEO creating an economic revolution or an upcoming startup generating a huge following, this is the place to keep up with the breaking news of the future.
Hot Topics – First, let’s take a look at some of the most popular discussion points within the community at the moment.
Steven Lemon, Co Founder of Currencycloud, continued to dominate headlines in the world of Fintech, following on from his discussion about the death of traditional banking in last week’s Fintech Fix. This week, Lemon, joined by Lindsay Davis from Atomic, furthered their analysis of embedded finance’s roots and the sectors it is thriving in the most. What kind of organisations have realised that they can ‘be the bank’ through embedded finance? Companies like Uber have mastered the art of invisibly embedded financial services, by providing convenient access where the cost isn’t even realised upon payment. Davis believes that this is why Uber remains a market leader. Lemon went on, claiming that Apple, Amazon with Alexa, and Google, are all clear examples of more and more proliferation of organic, background transactions without a conscious need to execute that transaction at the bank. Albeit a scary thought, it’s extremely fascinating to see how much this space will develop. Will we even notice our payments in the future?
As we become increasingly reliant on the technology in our hands to solve our needs, digital payments only increase in frequency. As a result, digital payments have changed for every country, but none quite as much as in India where the digital payments industry is expected to grow to 300% of its current size by 2025. Ruediger Vogt, from Giesceke and Devrient, and Aveek Chaudhuri, a digital lending specialist from one of the largest banks in India, discussed the reasons for this boom in digital payments and Fintech in India. The impetus for such a prolific adoption of digital payments, to them, is due to a variety of reasons; Chaudhuri believes that the shift by companies, banks and organizations from building products and services for payments in India to developing the core infrastructure need to make digital payments seamless and acceptable has led to digital payments taking off in India, combined with the effect of COVID which naturally magnified the need for contactless payments. Vogt also went on to state the governmental influence of digital payments in India; the strong establishment of regulatory environments and support for fintechs has resulted in an increase of funding by both national and international banks. To boost technological innovations, the government of India has also launched initiatives driven by the NPCI, the Digital India Program and Financial Inclusion Programmes. This space can genuinely act as a solution to address the credit gap in the priority sector in India. Fintech does change lives.
With Amazon reportedly preparing to accept altcoins soon after Jeff Bezos shot William Shatner (Star Trek’s original Captain James T. Kirk) into space, the cryptocurrency market rocketed to another all-time high and generated fascinating talks in the world of Paytech. Charlie Meraud from altfi market maker, Woorton, is sceptical that we’ll be buying flat whites with crypto any time soon. On the other hand, Danny Scott, of one-stop crypto exchange CoinCorner, is pretty certain that the Lightning Network – which is just at the start of what could be a massive upheaval in the online streaming payments space – and other altfi-driven solutions to retail payments will, eventually, take us where no currency has gone before.
Safenetpay is enhancing its services for EU and EEA customers, following the establishment of a Danish subsidiary. As with many UK-based Fintechs, Safenetpay was looking for a European base to continue their ambitious growth plans post Brexit. Now, with their EMI licence, the company can expand its operations to provide SMEs and sole traders across the continent with smart business solutions, which Sanjar Mavlyanov, Founder and CEO of Safenetpay, believes is entirely achievable since ‘the Danish regulators encourage entrepreneurial spirit, collaboration and the pursuit of innovative solutions to complex problems.’
Transfer News – this week’s transfer news has much less to report, with no big moves in the market taking place as of yet. Nonetheless, the acquisition of two senior hires to Elliptic’s team will undoubtedly strengthen the global leaders in crypto-asset risk management. Safiya Karsan has been appointed Chief Operating Officer, responsible for leading Elliptic’s strategy ,operations and peoples team to drive the company’s continued growth. Joining Karsan in the transfer deal is John Connolly, who has been appointed Chief Product Officer. Connolly comes in to lead product strategy and management at Elliptic, with a clear focus on creating strategic value for customers through technology and data-science enabled innovations.
Big Partnerships To Watch – we have LOTS of exciting opportunities evolving in the space right now as a result of some huge partnerships that have recently emerged.
HSBC is working with Oracle NetSuite, one of the world’s leading cloud Enterprise Resource Planning systems, to launch a Banking as a Service (BaaS) offering which will enable customers to create and provide business banking solutions through their own platforms. The goal for HSBC here is to broaden its BaaS offering with more services, including HSBC Global Wallet, the multi-currency digital wallet for making and receiving international payments like a local. This is just another example of a traditional bank diversifying its services to keep up with the evolving world of Fintech.
Worldline, the European leader in the payments and transactional services industry, has partnered with Chargebee, the leading subscription, billing and revenue management platform, to provide end-to-end payment, subscription and revenue operations solutions for merchants operating in a subscription model. Daniel Nordholm, Head of Worldline’s Merchant Services division for Regional Businesses, said that ‘Worldline serves 1 million merchants across the globe, and we share with Chargebee a belief in making payments simple to allow businesses of all sizes to scale up. We are very excited to join forces and combine Chargebee’s vast expertise in the subscription economy with our expertise in payments to offer the best user experience for our customers.’
Klarna announced another big partnership ahead of the holiday season, with SmartGift, a leading gift-based e-commerce and data platform. The partnership will allow consumers to better the traditional gift-giving experience by letting recipients select their own preferences for gifts and even exchange a product before it has even been shipped. Not only will this reduce environmental wastage and lessen the mental stress of intense Q4 Christmas spending, but will ‘enable a super and flexible shopping experience at a time when digital gifting is more important than ever’, according to Head of Business Development and Partnerships at Klarna, Matthew Suraci.
Lastly, Allfunds & ConsenSys have collaborated to apply Allfunds Blockchain technology beyond the Fund Industry. This launch opens the possibility to apply the privacy enhancements beyond the original Allfunds Blockchain Fund Industry use case. Selected consulting firms, as well as technology and blockchain companies have been testing alpha versions of the solution to understand the possibilities created by this new privacy approach, which contributes to the continued development of the Enterprise Ethereum ecosystem.
Funding – Although not entirely about funding, Credit Suisse are definitely going to have to evaluate their financial situation after being fined over £147,000,000 by the FCA for serious financial crimes relating to due diligence failing regarding loans worth over US$1.3 billion, which the bank arranged for the Republic of Mozambique. This shocking penalty reflected key corruption within the market between government officials. Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA, commented that the fine would have been higher, however Credit Suisse have also agreed to forgive the US$200 million of debt owed by the Republic of Mozambique as a result of these tainted loans.
In more positive terms, Pismo announced a $108 million Series B fundraising round, led by SoftBank, Amazon and Accel. Pismo is a cloud-native core banking and payments platform which has already attracted some of the biggest banks, fintechs and retailers in Latin America. Handling more than 4 billion API calls a month, and hosting more than 25 million accounts transacting more than $3 billion a month, Pismo is undoubtedly ready for a new phase of growth to lead banking and payment disruption all around the world.
Whilst Pismo wants to disrupt the banking and payment industries, kevin. secured £10 million of new capital in a seed funding round, with the aim to disrupt the card payment ecosystem. kevin.’s advanced A2A (account-to-account) payment infrastructure solution was created to swiftly change costly card payments to payments linked directly from customers’ bank accounts without using any third-party providers. The demand for such a service is definitely present, as Tadas Tamousiunas, CEO and Co Founder of kevin. commented that customers ‘are now seeing up to 40% of transactions being made directly through pre-linked bank accounts in mobile apps and more than 70% switching from cards to A2A in online payments.’
So that’s your weekly Fintech Fix! Stay tuned for next week’s dose so that you can stay up to date with the biggest stories of the future, right here in the present.