BankerAdvisor's Ongoing Series of How Fintech is Making Lives Better

Remitting it Forward

Run on digital assets leads platforms to freeze user accounts, including withdrawals. Bankruptcy looms. 

The Big Chill in Crypto

Firm to combine asset, wealth and consumer banking into one unit

Goldman Sachs Reorganization 

Coinbase, Google Cloud, MinePlex among deals

Crypto Still Has Fans...And Deals

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401(k) provider Fidelity aid it would give 23,000 employers the option to have employees add bitcoin and other crypto assets to their retirement savings.

Redefining Risk: Crypto and Retirement Savings

London financial services firm Ebury signed a deal to acquire Brazilian FinTech Bexs in a move to broaden Ebury’s offerings of global money transfer solutions for small- to medium-enterprises (SMEs).

London FinTech Ebury Expands Global Footprint with Bexs Acquisition

Swiss provider of banking software Temenos has launched ESG Investing-as-a-service, helping banks and wealth managers make use of sustainable investing. 

Temenos launches ESG Investing-as-a-Service

Younger banking customers are making a decided move away from megabanks like Bank of America, JPMorgan Chase, and Wells Fargo for digital banks and fintech like Chime, PayPal, and Square, according to research done by Cornerstone Advisors.

Market Share is Moving to FinTechs and Digital Banks

Crypto lender Voyager filed for Chapter 11 bankruptcy protection a week after halting withdrawals and two weeks after getting a $485 million bailout from FTX founder Sam Bankman-Fried’s firm Alameda Research.

Alameda Research now stands as Voyager’s biggest creditor with an outstanding loan of $75 million, according to multiple reports on Wednesday (July 6).

Voyager and its two affiliates, Voyager Digital LLC and Voyager Digital Holdings, filed Chapter 11 voluntarily in the U.S. Bankruptcy Court of the Southern District of New York to restructure and “create a path” to resume operations and “return value to customers,” according to a press release. 

Crypto Lender Voyager Seeks Chapter 11 Protection

The co-founders of failed crypto hedge fund Three Arrows Capital appear to be on the run from creditors, according to court documents recently filed in New York.

Founders of Bankrupt Crypto Hedge Fund Three Arrows Capital Go Missing

The Consumer Financial Protection Bureau is looking into just how much banks charge in credit card interest as consumers increasingly utilize credit cards as a source of borrowing in  response to increased prices due to inflation. 

Consumer watchdog signals ‘a closer look’ at record-high credit card rates as balances jump

Celsius Network, a large cryptocurrency lender filed for bankruptcy after freezing customer assets that led to increased customer redemptions following a decline in cryptocurrency values.

Crypto Lender Celsius Files for Bankruptcy 

Forsage claimed to be a decentralized smart contract platform built on the Ethereum, Tron, and Binance blockchains allowing retail investors to earn profits by recruiting other investors.

SEC charges 11 people in alleged $300 million crypto Ponzi scheme

Global Payments announced plans to acquire EVO Payments today. EVO Payments provides payment technology and acquiring services solutions. 

Global Payments to buy EVO Payments for $4 billion 

Revolut Ltd., a London-based fintech, is launching a one-payment feature in a bid to rival PayPal Inc. and other tech giants at online checkouts following the recent launch of a card reader in July. Revolut Pay has signed up retailers including Shopify Inc., Prestashop, WH Smith Plc and Funky Pigeon, and will be available within the airline industry in the coming months.

Revolut Wants to Compete With PayPal and Apple at Online Checkouts

J.P. Morgan Chase is acquiring payments startup Renovite for undisclosed terms to use its technology to underpin the expansion of the bank’s merchant acquiring space worldwide, propel its journey to the cloud in payments and enable faster processing. With Renovite, J.P. Morgan Payments will build its next-generation merchant-acquiring platform while strengthening the bank’s payments modernization strategy, according to a press release on Monday, Sept. 12.

JPMorgan Payments Acquires Renovite for Cloud Payments

Recent figures compiled by M&A and corporate finance firm Hampleton Partners show a 46 percent increase in fintech deals in the first half of 2022 compared with 2021 and a 70 percent increase compared with the first half of 2019 pre-pandemic deals.  Steady valuation, the availability of capital, and high-growth fintech companies make the fintech M&A market attractive. 

Fintech M&A on the rise as valuations crumble

Power, a fintech infrastructure startup, is now kicking off its full-stack credit card issuance platform after a year in stealth mode and with $16.1 million in seed funding and $300 million in a credit facility. The New York–based company’s seed round was led by Anthemis and Fin Capital and included CRV, Financial Venture Studio, Dash Fund, Plug & Play and a group of angel investors.

Fintech startup Power flexes its credit card muscle following $316M equity, debt injection

AltFi revealed this morning that Francesco Simoneschi, CEO of Truelayer, alerted staff that their headcount would be cut by 10%. Truelayer is not the only fintech facing significant employee cuts, in May BNPL giant Klarna announced plans to lay off 10% of their staff, trading app Robinhood axed 23% of their staff last month due to the economic downturn, and e-commerce platform ClearCo laid off 125 employees, 25% of their staff in August.

Truelayer to axe 10% of staff – AltFi

PAYA Group, an independent provider of card processing solutions to businesses in the UK, has acquired fellow UK paytech Interactive Transaction Solutions. PAYA trades under brands such as PayaCardServices, PayaCharity, LibertyPay, and QixPay and provides a range of card acceptance services to organizations across numerous sectors, supported by in-house technology, online applications and portal customer support facilities. PAY Group will benefit from the ITS payment gateway and the ability to perform its own acquirer and terminal accreditations through its PCI DSS certification.

PAYA acquires card payment provider ITS

Modern Treasury’s flagship Payment Operations platform will provide mutual clients with an integrated money movement solution, with payments powered by TxB. The companies have jointly served clients since late last year. Going forward, product teams from both companies have committed to a mutual product roadmap to address new client needs, tighten the integration and offer mutual clients a unified product experience.

Goldman Sachs and Modern Treasury partner for embedded payments initiative

Visa and MasterCard process three-quarters of the world's card payments, terminals, and paypoints and are effectively a duopoly.  A few developments could impact the sustainability of their model. Open banking, regulation, and the growing popularity of alternative payment methods may impact their established power.

Will Visa and MasterCard survive?

Fintechs like Chime, Current, N26, Level, Step, Varo and Moven are partnering with banks in an effort to make younger consumers comfortable doing all their banking online

Most Fintechs Partner with Banks

Nasdaq Digital Assets will begin by developing a cryptocurrency custody solution that will bring together the “best attributes of hot and cold crypto wallets”

Nasdaq to Launch Crypto Custody Service

According to Crunchbase data, M&A activity targeting VC-backed crypto startups hit an all-time high in the first quarter of the year when 16 were announced. However, deal pace has reverted to barely a trickle, with just seven deals in the last nearly two full quarters.

Crypto M&A Slows to a Crawl

According to a news release, Billtrust, which has traded on the Nasdaq since going public last year, will become a private company upon the conclusion of the sale. Billtrust’s software helps businesses move from paper invoicing to a digital payments system and has more than 760 employees in seven countries. The company went public in a special purpose acquisition company (SPAC) merger in 2021 and its shares hit their peak in the middle of February of last year before falling 73%. Recently, Billtrust reported quarterly results that showed the momentum of the accelerating trend toward automation and digitization in the B2B payments space.

B2B Payments Firm Billtrust Goes Private in $1.7B Deal 

Google will enable a subset of customers to pay for cloud services with bitcoin and cryptocurrency. The new payment method will go live early next year in a partnership with Coinbase. The exchange will migrate its data platform to Google Cloud.

Google to Accept Bitcoin, Crypto for Cloud Services in Coinbase Partnership

Headlines about losses and layoffs in FinTech are gathering to suggest market change through consolidation and merger. This year is seeing a big adjustment as FinTechs are experiencing a recession losing $850bn in value in the past year and laying off 7,300 staff between April and October 2022.  All technology sectors have been impacted in 2022 by the recession and contraction of spending, but FinTech is particularly vulnerable due to soaring costs, decreased transaction fee revenue, and declines in retail investing volumes. Global FinTech M&A saw a sharp rise in the first half of 2022 and will see massive consolidation through 2022 and 2023.

The FinTech Bloodbath

JPMorgan is piloting a platform it created for property owners and managers that automates the invoicing and receipt of online rent payments.  The majority of rent payments are still paid with checks.  JPMorgan sees the opportunity to leverage data and analytics for customers with rent rates, investments, and tenant screening.

JPMorgan Chase wants to disrupt the rent check with its payments platform for landlords and tenants

Banks looking to boost their digital capabilities reportedly may be taking a closer look at acquisitions of FinTechs as the valuations of FinTechs have fallen 70% this year.  The decline in FinTech valuations has been driven by the economic downturn, rising interest rates, and lower investor confidence after the collapse of the cryptocurrency exchange FTX. In addition, banks earnings have increased as their lending business benefits from rising interest rates, and it’s easier for banks to buy FinTechs than to merge with other banks because the latter involves more regulatory scrutiny.

FinTech Winter May Lead Banks to Increase Acquisitions 

Small to midsized businesses (SMBs) are investing in new tools, including payment solutions to explore the size and scale of the opportunity for SMB retail and how merchants can drive growth with new payment technologies. Retailers are chasing of seamless payment experiences including buy now, pay later and considering new payment options for payment technologies that can streamline payment experience and help achieve scale for their businesses.  

Small Business Survival May Hinge on Digital Payment Features

Blockchain payments company, Centbee, announced that it has closed its pre-Series A round with entrepreneur Calvin Ayre, founder of Ayre Ventures which first invested in Centbee in 2019. Centbee has a suite of digital cash products and services that make payments easy, even cross-border.  Centbee was founded by co-CEOs, Lorien Gamaroff and Angus Brown both of which has significant experience in blockchain technologies and cryptocurrencies. 

Global Blockchain Payments Wallet, Centbee, Raises $1 Million Pre-Series a Funding from Ayre Ventures

Australian payments processor Till Payments is shedding 40% of its workforce, joining the long line of fintechs which have been forced to cut staff in the wake of over-ambitious quick-scale growth strategies. The firm has pointed to high inflation and tough global economic conditions for the downsizing.

Till Payments to cut 120 staff

Chinese billionaire and founder of Ant Group Jack Ma will be giving up his control of the fintech firm. Ant Group’s shareholders have agreed to carry out a restructuring process that will see Ma give up most of his voting rights, according to the statement.

Jack Ma to cede control of Chinese fintech Ant Group

Moneyhub, founded in 2014, creates software for open banking, open finance, and open data applications announced it received an additional $18.2 million (£15 million) investment from savings and retirement business Phoenix Group. The funding round is a follow-on to the recent $48.6 million (£40 million) Moneyhub received in October 2022 which was led by Legal & General and Lloyds Banking Group led that round, contributing $42.4 million (£35 million), and Shawbrook Bank. Moneyhub’s total funding now adds up to $81.6 million.. 

Moneyhub Raises $18.2 Million, Completing $66.8 Million Funding Round

Global payments platform for digital A2A transactions, Trustly, has announced a new strategic partnership with Sweden-based platform for savings and investments, Nordnet. The partnership will allow pay-ins via Trustly across the Nordic countries, making it possible for Nordnet customers to easily and securely deposit funds, benefitting from an improved user experience throughout the process.

Trustly, Nordnet partner to enable pay-ins for retailer investors

The Consumer Financial Protection Bureau has proposed a new rule to ban excessive credit card late fees. Congress banned excessive fees in 2009, but the Federal Reserve Board of Governors issued actions to circumvent the law, the CFPB said.  The CFPB rule proposed Wednesday would lower the amount consumers can owe for late fees under the immunity provision to $8 from as much as $41, end the automatic annual inflation adjustment for the provision and cap late fees at 25% of the minimum payment owed by the cardholder. The new rule could potentially reduce excessive late fees by as much as $9 billion per year.

Consumer Financial Protection Bureau targets excessive credit card fees in new rule proposal

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8fig offers a planning and funding financial technology platform designed to help e-commerce businesses accelerate growth and improve working capital through supply chain and cash flow managements solutions.

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