Worldline merges with Ingenico

Worldline merges with IngenicoImage courtesy of Worldline.

Global payments providers, Worldline and Ingenico, have combined under Worldline to create the largest European payment services provider, according to a press release. A Worldline spokesperson told this website he could not comment on the terms at the present time because the acquisition offer has not been made available to U.S. investors. Worldline announced last month it received merger control clearance from the European Commission for the planned acquisition of Ingenico.

The merger of the two France-based companies will provide a wider range of digital payment capabilities through integrated payment solutions, improved technology, enhanced innovation capabilities and an extended global footprint, according to the press release.

“Having the scale and now global capabilities, we have reshaped our group entirely in order to support, now more than ever, our clients, merchants and banks in particular, enabling them to rely on state-of-the-art electronic payment services to accelerate their own growth as well as their digital transformation strategy,” Gilles Grapinet, chairman and CEO of Worldline, said in the press release. “Despite the difficult times we are all facing at the moment, I have never been this confident in the group’s potential and future and in its 20,000 employees.”

The merger makes Worldline the largest European provider of payment services and the fourth largest player worldwide with pro forma 2019 revenue of 5.3 billion euros ($6.18 billion) and a presence in 50 countries, according to the press release.

Worldline payment services include online payments, omnichannel solutions and payment terminals, and provides digital banking to 1 million merchants and 1,200 banks and financial institutions.

Yolt Partners With PPS to Launch Its First Physical Card

PPS, formerly PrePay Solutions and subsidiary of Edenred, the everyday companion for people at work, has announced its partnership with Yolt, the smart money app, following the inaugural launch of its contactless debit Mastercard.

Following its first step into the payments space with Yolt Pay in 2019, the award-winning fintech is now working with PPS on the launch of its first physical card.

Thanks to PPS’ technology and licensing, Yolt’s product experience is enhanced, equipping customers with an e-money account linked to a PPS powered Mastercard debit card enabling the users to manage and spend money online and instore. Together with PPS, the Yolt app helps people to save on every single purchase with round-ups and cashbacks on selected brands.

Ray Brash, CEO of PPS, said: “Following the recent launch of Yolt Pay, we’re delighted to support this exciting fintech in the next leg of its evolution, with its first ever card. We look forward to the future of our partnership supporting the company with a roadmap of enhancements and new functionalities.”

Born in 2017 out of a simple mission to give everyone the power to be smart with their money, over 1.5 million users have registered with the app to date. Yolt enables customers to bring together all of their accounts in one central place from the likes of American Express, Starling, Barclays and HSBC, enabling smart spending, budget tracking and financial goal setting.

Pauline van Brakel, Chief Product Officer, Yolt, added: “We’re incredibly proud of the progression of the Yolt app. Now, more than ever, is a time for people to be spending cautiously and saving where they can, preparing for any uncertainty that may lay ahead of us. We couldn’t have made this launch happen without the help of innovative partners such as PPS, who can improve our customer offering. In the future, we are excited about further enhancing our product by utilising PPS’ platform.”

This Week in Fintech ending 1st November

This week our experts brought you the following insights based on their experience as investors, entrepreneurs & executives.

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Your Editor is Bernard Lunn. He is also the CEO of Daily Fintech and author of The Blockchain Economy and occasional opinion columnist.

Monday Ilias Hatzis our Greece-based crypto entrepreneur (Founder & CEO at Kryptonio and Weekly Columnist at Daily Fintech) @iliashatzis wrote ālea iacta est… PayPal crosses over to Bitcoin

When Julius Caesar crossed the Rubicon, he uttered the famous phrase ālea iacta est (“the die has been cast”). On the October 21st, we had one of those moments and passed the point of no return. PayPal, one of the biggest payment companies in the world, with a market cap of $240 billion, 346 million users and 26 million merchants will soon allow its customers in the  US to buy, sell and HODL Bitcoin, Bitcoin Cash, Ethereum and Litecoin. In a press release the company announced that its new cryptocurrency service will be available in the US. in the coming weeks and by early 2021 customers will be able to use crypto to shop with its network of 26 million retailers. PayPal is offering this service to its US customers, then plans to add more geographies and features over time. PayPal also plans to expand the service to Venmo, its peer-to-peer payment app popular with younger consumers, by the first half of next year. While the announcement is cause for excitement, there is one big problem with the new service. PayPal users won’t be able transfer their cryptocurrency into or out of PayPal, nor will users have control of the private keys. PayPal is not alone here, Robinhood, Revolut and eToro are all in the same boat when it comes to crypto ownership. While there are many places to buy crypto which and keep ownership of the coins, there is no question that the announcement of PayPal’s crypto service is huge piece of news and has the potential to bring millions and millions of new users to crypto world and propel Bitcoin’s usage beyond speculation.

Editor note: Ilias analyses the news that drove BTC/USD over $13k.

Bernard Lunn, CEO of Daily Fintech and author of The Blockchain Economy wrote: Cross border payments part 1: the competition is really, really old

This 4-part series on cross border payments starts by describing how the legacy competition works today as a way to segue to part 2 which describes why it is so expensive today. Part 3 looks at 4 types of Stablecoin disrupters. Part 4 looks at the adjacent markets for monetisation in the event that cross border payments fees go to zero.

These four posts will be published one week apart.

Editor note: Part 1 of 4 part series on a huge market that is about to undergo major disruption


Tuesday Efi Pylarinou @efipm our Swiss-based Fintech Adviser,  founder of Efi Pylarinou Advisory and a Fintech/Blockchain influencer – No.3 influencer in the finance sector by Refinitiv Global Social Media 2019 wrote Universal Basic Income – A 40yr old UBI & the latest experiments

The social need for a Universal Basic Income and its social and economic implications have not subsided. UBI is not as hot as stablecoins and DeFi but there are more and more UBI pilots that are mushrooming around the world. I am noticing pilots that move into implementation and also UBI programs that were launched for a small part of the population and have now grown multiple times.

Most people know of the Swedish experiment that was not considered a great success. From experience and from the academic points of view, values and cultures matter because they shape the perceptions of self worth, purpose, and value add. At the same time, we live in an era during which values are shifting.

Editor note: Efi describe some of UBI initiatives around the world, including some private sector projects using cryptocurrency wallets and programmable money.

Wednesday Alan Scott Managing Director EMEA at 24 Exchange @Alan_SmartMoney wrote Stablecoin News for the week ending Wednesday 28 October 2020.

This weekly snapshot is the news that matters in the Stablecoin market.



Rintu Patnaik, an Insurtech expert based in India, wrote: ILS: A Lone Wolf Among Securities, A Boon For Cat Covers

The ongoing pandemic stoked large corrections in equity, commodity and debt markets as players grappled with the full extent of its impact. At such times, insurance linked securities (ILS) are a boon, being mostly uncorrelated to mainstream financial markets. Since natural catastrophic ILS are driven by disaster events, there is no direct link to credit or economic cycle.

Editor note: The Cat in Cat Covers is short for Catastrophe. Read this to understand the innovators working in an arcane but lucrative niche of the Capital Markets known as ILS (Insurance Linked Securities) which are a form of Reinsurance.

Christian Dreyer @x3er, our Swiss based CFA who focusses on how XBRL changes our world wrote XBRL News: SEC enforcement, investment-grade sustainability data, invoicing

Editor note: This weekly snapshot is the news that matters in the XBRL market.


Friday Howard Tolman, a well-known banker, technologist and entrepreneur in London, wrote: Alt Finance for week ended 30 October 2020

Editor note: This weekly snapshot is the news that matters in the Alt Lending market.


To continue receiving ‘This Week in Fintech’, the weekly recap of our articles, you will need to fill this form to give us consent to send this to you. Please note that Daily Fintech requires your organizational email address (e.g. corporate, educational or government) and your LinkedIn URL. This information is required for subscribers who want ‘This Week in Fintech’ for free. If you prefer to not provide this information, you can still receive all our content by becoming a paying member.

European Start-Ups Receive 127% More Growth Capital Than In 2016

European start-ups received 127% more growth capital than in 2016 according to a new infographic from It was also found that young entrepreneurs experience increasing opportunities on the European continent – and fewer see the need to relocate to the US.

This year, $34 billion has flowed into European start-ups, compared to just $15 billion over the whole of 2016. Financing rounds are also showing clear signs of change in other respects. This year, 33% of firms entered the US market before their first major financing round. Just a decade ago, this figure was significantly higher at 59%.

The research also found that Europe presents attractive conditions for start-ups. There are currently around 6 million trained software developers, compared to just 4.3 million in the USA. Rental price trends for business incubators in the US are also increasingly impacting on young companies. Fewer and fewer start-ups have been born out of necessity in Germany in recent years. The proportion of such start-ups fell from 30% in 2013 to 23% in 2019, but it remains to be seen to what extent the pandemic will impact on business development. Currently, 74.2% of entrepreneurs emphasise the negative impact of the corona crisis on their business activities.

“Most of the big tech companies are still based in the USA or China,” said Block-Builders analyst Raphael Lulay. “But numerous innovations are also coming out of Germany or Europe. In the past, promising start-ups quickly moved to the USA – but this trend seems to be gradually coming to an end. Young entrepreneurs are increasingly enjoying the opportunities that Europe has on offer, and companies such as Spotify, Delivery Hero and Adyen serve as role models.”

Alt Lending for week ended October 30th 2020

Digital Start ups in the Banking Arena

There really are rather a lot of these companies and I suppose that the really surprising thing is about them is that that a lot of them look very similar indeed. The list I surveyed is US centric and the companies concerned are in Clusters around the Bay area, Chicago and to a limited extent the East coast money centres. Whether they succeed or not is not really in question as some of the software that they develop is bound to be valuable to someone or other. In fact small banking operations have always been a feature of the US scene and the digital scene is just an extrapolation to that trend. Years ago you went two NYC and there were always a couple of new shiny branches along Avenue of the Americas which were not there two years ago. The model seemed to be a) form a bank b) get started c) get sold to Chase. I suspect therefore that the same thing is happening here. Does it really help? Watch this space but I suspect that very few will become household names.

European Fintech start ups.

It somehow didn’t seem fair to look at the United States and not see how the start up scene is looking here in Europe. Here as in the US there are a large number of companies that look very much the same and with the same types of characteristics. As in the US the fragmentation is perhaps the most dominant feature. Every week AltFinance News publishes news clips on how small digital banking activity companies have raised $ 5million here and $ 2.5million there without demonstrating how they are differentiating but the same thing will undoubtedly happen here as has happened in the US. The risk of course is huge in that there is only so much that you can do with financial services. Lending money is easy, sending it somewhere is also easy, keeping it secure is somewhat more challenging. There have been a few scandals so far. Expect a few more. I must say that I am impressed by the progress Oak North seems to be making as it appears to be addressing critical architectural issues such as compliance and is innovative in the world of credit science which must have a huge value going forward. As usual the elephant in the room will be COVID and the behavioural changes flowing from this has the capability of blowing everything away in its path.

HSBC breaks ranks admitting free banking may have had its day

HSBC is Europe’s largest bank and if it decides to charge customers for keeping their money then others will surely follow. At the same time the large banks in the UK are essentially pulling out of the bread and butter mortgage market and considering raising charges for other services. Meanwhile digital banks are lending as fast as their algorithms will let them. The big banks have one major advantage that they are big. Their biggest disadvantage is their cost base. Unfortunately ultra low interest rates and risk averse regulation is destroying their business models all over Europe. At the same time QE has caused a surge in asset prices. If you have assets you gain from this if you don’t you end up paying to keep your own money. In the longer term this is politically unsustainable. In the meantime the disrupters can make hay and the small depositors are protected from ill advised credit policies although larger depositors will recognise the risk they may be taking. Some banks are too big to fail others are not. In 2008 the US exported a systemic property crash across the whole of the western world. We have not yet recovered and are misallocating resources at a terrifying rate. At some point this is going to need addressing.

Howard Tolman is a well-known banker, technologist and entrepreneur in London,

We have a self imposed constraint of 3 news stories per week because we serve busy senior Fintech leaders who just want succinct and important information.

For context on Alt Lending please read the Interview with Howard Tolman about the future of Alt Lending and read articles tagged Alt Lending in our archives.

Daily Fintech’s original insight is made available to you for US$143 a year (which equates to $2.75 per week). $2.75 buys you a coffee (maybe), or the cost of a week’s subscription to the global Fintech blog – caffeine for the mind that could be worth $ millions.

Nine Start-Ups Graduate From F10 Singapore’s First Incubator Program

F10 Singapore’s first incubator cohort – which included nine select Fintech, Regtech, Insurtech and Deeptech start-ups – will be ready to go to market with their first product after graduating from the program.

“Despite the challenges faced by Covid-19 and shifting the program online, we managed to deliver an engaging program, which resulted in remarkable progress by the start-ups and numerous initiatives between them and our corporate partners,” said Jonas Thürig, Head of F10 Singapore, the Asia launchpad for F10 Global, Europe’s leading incubator and accelerator for Fintech, Regtech, Insurtech, and Deeptech.

To qualify for the program, start-up teams needed to commit to transforming their prototype into a scalable product, gain traction and secure funding. The F10 incubator provided the start-ups with 1-on-1 coaching on go-to-market and product development. Fundraising support was provided by connecting the entrepreneurs to the F10 investor network. The F10 network gives entrepreneurs and start-ups strategic opportunities to connect with corporate partners which include the Swiss Stock Exchange (SIX), Julius Baer and R3 in Asia. There were more than 25 mentors in the program from companies such as Accenture, DBS, Deloitte, HSBC, NETS, Oracle, Standard Chartered, Stripe, UBS and more.

Since 2016, more than 100 banking and insurance tech start-ups globally have completed the F10 Incubation Program, with a survival rate of 85%

F10’s first cohort of graduating start-ups from the incubator include:

  • Bond180, gives institutional investors new ways to engage and source assets in primary debt markets, through an intelligence, execution and automation tool to connect portfolio needs to primary deal flow.
  • DEXTF empowers financial institutions to create and manage digital-native funds through a non-custodial asset management protocol on the blockchain.
  • Fencore reduces software bloat for the financial institutions via its simplified data management platform, slashing time spent on implementation and maintenance.
  • HedgeSPA gives hedge funds and institutions access to advanced predictive analytics through AI, Big Data and cloud computing to improve investment performance
  • Inkredo instantly determines the financial health of borrowers by automating bank statement analysis with data to accelerate smarter lending decisions.
  • Maesh helps merchants cut credit card transaction fees with a user-friendly payment interface which leverages on banking apps instead.
  • Notarum automates compliance processes via its corporate due diligence platform to drive decisions that are accurate and compliant.
  • Pichain makes compliance sustainable through its onboarding and KYC (know your customer) solution that harnesses AI and blockchain.
  • Staple goes beyond legacy OCR (optical character recognition) to convert documents into structured data to eliminate repetitive financial workflows.

F10 Singapore’s second incubator batch will take place in March 2021, with applications already open.

With APIs, TransUnion taps income and employment data

TransUnion has integrated employment with income data to better reflect consumers’ ability to pay as economic dislocation and unemployment rates continue to strain the global economy. TransUnion partnered with a leading payroll provider that will provide access to tens of millions of active employment records through a direct API integration, Chief Global Solutions Officer Tim […]

Aite Group ranks fintechs on commercial loan automation

Abrigo, nCino and Baker Hill are leading the field in automating
commercial loan origination. The vendors notched impressive scores
in a report released this week by Aite Group, “Lenders’
perspectives: commercial loan origination automation.” The report
gathered input from 40 lender clients and rated commercial loan
vendors on a five-point scale in categories like client […]

Embedded Banking Specialist Wise Raises $12 Million

Embedded banking-as-a-service platform Wise secured $12 million in funding this week. The investment is its second one this year – Wise announced a $5.7 million seed round in April – and was led by with participation from Grishin Robotics. The company, which made its Finovate debut last year at FinovateFall, said in a statement that the capital will be used to help fuel growth and accelerate partnership-building in a number of verticals. Wise now has raised a total of $18 million in equity financing.

“We built banking so our partners don’t have to,” Wise CEO and co-founder Arjun Thyagarajan said. “By embedding banking, Wise unlocks deep product offerings and better customer experiences for our partners. built a thesis on exactly this, and we agree 100%.”

Wise offers an embedded banking experience that gives small businesses a seamless way to bank, as well as make and accept payments. Companies partner with Wise and leverage its all-in-one business banking solution to offer accounts to their own clients such as e-commerce platforms and marketplaces. In addition to providing a fully-hosted and fully-serviced banking experience, Wise helps companies bridge the gap between what they have traditionally received from banking services and what partner Brendan Wales called “an Apple-like experience” brought to the world of business banking.

“Business banking has been broken for far too long. Poor user interfaces, payments delays, unnecessary fees, a lack of integrations, the list goes on and on,” Wales said. Now, cloud-based B2B companies can offer banking services in a matter of days with no coding involved and have the entire operation managed and maintained by Wise.

Wise demonstrated its small business-banking-in-a-box solution at FinovateFall 2019. A Techstars NYC company based in San Mateo, California, Wise was founded in 2018. Check out our profile of the company from earlier this year.

PayPal Gets Into Bitcoin But Draws Mixed Response

PayPal’s decision to enter the cryptocurrency market sent the value of Bitcoin soaring, but the announcement has garnered a less than exuberant response from the fintech community.

In the coming weeks, PayPal account holders in the US will be able to buy, hold, and sell cryptocurrencies, including Bitcoin, Ethereum, Bitcoin Cash, and Litecoin, within the PayPal digital wallet. 

PayPal will also expand the features to its P2P payment platform Venmo and select international markets in the first half of 2021 through a partnership with Paxos Trust Company, a regulated provider of cryptocurrency services.

In addition, the New York State Department of Financial Services (NYSDFS) granted PayPal a first-of-its-kind conditional ‘Bitlicense,’ a business licence that enables the company to conduct virtual currency activities. 

To mark the launch, PayPal will not charge any service fees for buying or selling cryptocurrency or for holding cryptocurrency in a PayPal account until 31 December 2020.

PayPal Cryptocurrency

PayPal Cryptocurrency

PayPal will enable cryptocurrency as a funding source for digital commerce at its 26 million merchants

PayPal said it wants ‘to increase consumer understanding and adoption of cryptocurrency’ and will also provide account holders with educational content to help them understand the cryptocurrency ecosystem.

“The shift to digital forms of currencies is inevitable, bringing with it clear advantages in terms of financial inclusion and access; efficiency, speed and resilience of the payments system; and the ability for governments to disburse funds to citizens quickly,” says Dan Schulman, president and CEO at PayPal.

“Our global reach, digital payments expertise, two-sided network, and rigorous security and compliance controls provide us with the opportunity, and the responsibility, to help facilitate the understanding, redemption, and interoperability of these new instruments of exchange.”

‘Rubicon Crossed’

Following the announcement, Bitcoin surged in price, ultimately overtaking the market cap of PayPal itself. Billionaire investor Mike Novogratz called it an ‘exciting day,’ the ‘biggest news of the year in crypto’ and hailed the ‘Rubicon crossed’ on Twitter.

Writing in Forbes, David G.W Birch – the respected author, advisor and commentator on digital financial services – suggests that by gaining expertise in decentralised alternatives to commercial bank money, PayPal is being ‘very smart.’ 

“PayPal must have started to think about the opportunities that will arise from the trading and management of digital assets (in the form of tokens) in the not-too-distant future,” writes Birch

What’s the big story?



Some industry experts question why PayPal now wants to increase consumer understanding and adoption of cryptocurrency

However, others are concerned that while PayPal says it is ‘eager to work with central banks and regulators around the world,’ for now, it is restricting users to purchasing cryptocurrencies on its platform. Plus, existing digital coin owners can’t transfer the contents of other digital wallets over to PayPal’s.

Satoshi Labs, inventor of crypto hardware wallet Trezor, is less than impressed. It thinks PayPal is sending out mixed messages.

In a team blog, it suggests that while PayPal’s announcement may bring a promise of greater regulation, consumers should not use PayPal for Bitcoin transactions.

“Long-term, if PayPal proceeds without consulting the community and letting their users control their own keys, it offers no value to the space. The greatest risk is that the clout they carry in traditional electronic payments will be interpreted as expertise in crypto. This would threaten the expert advice so carefully crafted by our community, which could be drowned out by the misinformed masses that PayPal brings to the space.”

David Gerard, author of Attack of the 50 Foot Blockchain and Libra Shrugged: How Facebook Tried to Take Over the Money, says he is ‘baffled that PayPal would offer this’ and asks: “Are they trying to get into the bored day-trader market that apps like Robinhood live off, except cryptos rather than stocks?”

Meanwhile, Peter Smith, CEO at, adds: “PayPal’s decision is highly centralised and inflexible. We saw this with Robinhood, and we’re seeing it again today. Crypto is about financial freedom. It’s modern money that anyone anywhere can truly control. While we’re excited to see a new audience gain access, a non-custodial approach limits opportunity to self-custody your crypto or transact freely.”

PayPal is inviting people to join the waitlist for its cryptocurrency services at

It’s clear this is a significant step forward for Bitcoin and cryptocurrencies but it remains to be seen how PayPal’s arrival on the scene will impact this category in the long term.

  • Managing Editor, North America at The Fintech Times

The Evolution of Payments Fraud

Fraudsters are taking advantage of the increased number of transactions taking place online in today’s pandemic environment. Thanks to this shift, along with other recent payment trends like BNPL, the digital payments environment looks a lot different than it did just a year ago.

To get a better idea of the specific changes that have taken place, as well as those that have yet to come, we spoke with Vesta CIO Tan Truong. In our conversation, Truong offers his insight on recent payment industry trends, provides advice for merchants, and offers tips on how banks can help their small business clients fight payments fraud.

What recent changes have you seen in the payments space, and what changes do you foresee in the sector next year?

Tan Truong: The pandemic has really supercharged the acceleration of e-commerce growth – by some analyst accounts, the industry has jumped about five years ahead of its already steep growth trajectory. Total online spending in May, at the height of the pandemic, was up 77% year-over-year. But even many brick-and-mortar sales are no longer traditional in-store purchases, thanks to the rising popularity of curbside pickup options that allow consumers to make a purchase online and have merchandise dropped right into their car by a sales associate within minutes.

Unsurprisingly, fraud has also skyrocketed as consumers and retailers both look to prioritize health and safety by embracing contactless transactions. Some researchers are projecting that retailers will lose about $130 billion in revenue due to CNP fraud between now and 2023.

Buy Now Pay Later (BNPL) is the newest trend in payments. What type of risk management is required in this new frontier?

Truong: Buy Now Pay Later has seen incredible traction in markets like Australia and Latin America, but it has only recently started to take off here in the U.S., particularly among Gen Z shoppers.

One big area of risk here is around disreputable or fraudulent vendors taking advantage of the companies that offer BNPL services. If they haven’t properly identified whether it’s a legitimate or illegitimate merchant, they could easily fall victim to a scheme where a fake merchant submits falsified orders using stolen consumer PII, then collects payments for products it allegedly sold but did not ship. Since BNPL vendors assume the risk on these transactions, they would be left holding the bag.

In terms of risk for merchants, regardless of the payment method it is crucial that merchants follow established best practices to remain one step ahead of bad actors. There are several key areas they should be focused on to eliminate fraud and increase approvals:

  • Prioritize Anomaly Detection: Look for obvious irregularities in ordering habits which may suggest that a buyer is exploitative. These may include orders placed late at night during hours when customers are unlikely to be active, and orders for a high quantity of a specific product or at the upper end of the price scale.
  • Conduct a Digital Footprint Assessment: The four pillars of the digital footprint – device, IP, phone, and email – can provide crucial signals to understand the origins of a payment. For example, the lack of geolocation information or a mismatch between distances from the billing address to the IP geolocation can be a key indicator of fraud. Likewise, email addresses which are either linked to no-name providers or uncommon email hosting firms can be a bad sign, as can those that do not actually feature the name of the buyer. Email addresses that are just a string of letters and numbers are often a sign of randomization, a tactic often used by fraudsters to make identity detection difficult. Also keep a close eye on a customer’s phone number, since having multiple numbers associated with a single device can be a red flag.
  • Implement Data-Driven Machine Learning Strategies: Use fraud prevention tools that can build upon features and profiles targeting a range of factors – like user behaviors, session information, order history, and key attributes like products purchased, order amounts, times those orders were placed and shipping address. This is a much stronger approach than employing a rules-driven reactive strategy.

What are some things most merchants don’t think about when it comes to payments fraud?

Truong: Too many merchants are so hyper-focused on the idea of preventing fraud altogether that they hurt themselves in the long run. Nearly every merchant knows what their fraud rate is, but relatively few know their approval rate or understand the relationship between the two. A very low fraud rate isn’t necessarily a good thing. Depending on how the merchant got there, it may indicate that they are rejecting a large number of transactions. Most merchants don’t know how much revenue they are turning away through their fear of fraud. A shift in perspective is needed.

Fraud is a serious problem, and merchants really have no control over its growth; they can only control their reaction to it. If they are preventing fraud by rejecting any transaction where they’re not 100% certain of its legitimacy, there’s a very high chance they are suppressing revenue and turning away many genuine customers. False declines are a lot more damaging than many merchants realize. According to a recent report from Sapio Research, 33% of U.S. consumers said they would never again shop with a particular merchant if that merchant had falsely declined their payment.

Throttling questionable transactions is short-term thinking: it puts undue pressure on profit margins, reduces sales revenues and the number of good transactions accepted, and negatively affects customer loyalty and brand reputation.

How can banks help their small business clients in fighting payments fraud?

Truong: E- and m-commerce were supposed to be the great equalizer for small and midsized merchants, but they have been hardest hit by fraud as they are unable to match the spending power of larger companies who spend about $4 fighting fraud for every $1 of fraud committed. As a result, many smaller merchants combat fraud primarily by not approving any questionable transactions – an approach that inevitably has them leaving revenue on the table.

Banks can help their small business clients by incentivizing them to find and implement anti-fraud technologies that will go beyond limiting their fraud risk and help them prioritize maximizing revenues.

Vesta recently teamed up with data network provider Plaid. Tell us how this partnership can reduce nonsufficient funds.

Truong: Plaid provides a secure connection between consumers’ banks and the fintech apps they want to use, so the integration was a really important step for us. It allowed us to launch a Guaranteed ACH product that enables automated clearing house payments while reducing fraud and fees incurred from non-sufficient funds. Since Plaid is connected to more than 11,000 banks in the U.S., Canada, and Europe, the real-time visibility they provide allows us to get an accurate sense of a customer’s account status, minimizing a merchant’s risk around fraud or just bad budgeting on the behalf of a consumer.

Merchants have been very reluctant to accept ACH payments due to the time it takes to settle charges and increased risk of fraud involved. At the same time, ACH payments cost significantly less to facilitate than credit or debit card purchases – a gap that is especially eye-opening for large purchases. For example, a $5,000 transaction could cost the originator anywhere from $0.25 to $5 when made with ACH, or $90 if made with a credit card.

So the partnership with Plaid enabled our Guaranteed ACH offering, which in turn addresses two of the major barriers to broad adoption of ACH payments – speed and trust. It also opens up opportunities for millions of Americans with bank accounts but no payment cards to be able to shop online.

Photo by Azamat E on Unsplash

Kaspersky Warns of Cyber Security Threats in Africa

Despite research showing an overall decrease in certain malware families and types in sub-Saharan Africa (SSA) in H1 2020 (36% decrease in South Africa, 26% decrease in Kenya and a 2.7% decrease in Nigeria), Kaspersky has warned that the human cyber threat remains rife. Africa is not immune to the evolving techniques of Advanced Persistent Threats (APTs), as well as the possibilities of being a future target of hacking-for-hire threat actor groups.

Kaspersky research has found that globally, APT groups are evolving their techniques and are upgrading their toolset to continue stealing sensitive information. It has also seen a rise of hackers-for-hire or cyber mercenaries during the first two quarters of 2020. In fact, three cyber mercenary groups have been exposed across the world this year alone.

As this activity has taken place outside of Africa, Kaspersky suspects that these types of actors may have been somewhat forgotten and do not necessarily form part of cyber defence strategies. However, the region may become a focus of these groups in the coming months and so businesses and entities need to have an understanding of these emerging threats, along with the threat of APTs, to be prepared and take proactive steps towards effective cybersecurity.

Hackers-for-hire or cyber mercenaries do not necessarily have monetary motivations like traditional cybercrime. Instead, they steal private data to monetise it in a different way – usually for the purpose of providing advice or insights, based on the data, to share value of a competitive advantage. For example, a bank might get targeted and have its data analysed to gain an understanding of its market exposure, clients, and back-end systems. A competitor can use that to gain significant benefit. The reality is that in this evolving cyberthreat landscape, no company or government institution can consider themselves safe.

In South Africa, Kenya and Nigeria, APT groups are exploiting the current uncertainty around Covid-19 to steal sensitive information. More sophisticated techniques have emerged that delivers malware in non-conventional ways. While overall malware attacks in South Africa, Kenya and Nigeria decreased during the first two quarters of 2020, certain malware types, such as the STOP ransomware, are proving increasingly popular for certain cybercriminals. The same applies to financial malware in South Africa and Nigeria as examples. So, even though it decreased in these countries, certain financial malware types are gaining in popularity thanks to their unique techniques which these groups are exploiting to monetise data. This emphasises that attacks are becoming more targeted and at specific companies, in specific regions and for specific purposes.

The top industries under attack in Sub-Saharan Africa in H1 2020 include government, education, healthcare, and military. While government and military present compelling – and obvious – targets, education and healthcare are often used as pivot points to gain access to other institutions. Sometimes, an entity is a victim while other times it is the target.

The top three threat actors in these regions in this regard are TransparentTribe, Oilrig, and MuddyWater.

Maher Yamout, Senior Security Research, Global Research & Analysis Team at Kaspersky said: “The remainder of the year will likely see APT groups and hacking-for-hire threat actors increase in prominence across the globe. Africa will continue to see more sophisticated APTs emerge and we also suspect that the hacking-for-hire actor type could target companies in Africa in the future. We also anticipate that cybercriminals will increase targeted ransomware deployment using different ways. These can range from trojanised cracked software to exploitation across the supply chain of the targeted industry. Data breaches will certainly become more commonplace especially as people will continue to work remotely for the foreseeable future while exposing their systems to the Internet without adequate protection.”

While prevention is ideal, detection is a must. If there is an understanding of the technology environment and having the ability to detect any deviation from the baseline, decision-makers will go to great strides in mitigating the risk of compromise and by understanding the threat dynamics, organisations can better protect themselves from evolving cyberattacks.


Teen banking app hires Chime's Gonzalez to lead customer experience

Copper, a banking app startup that targets teens, has hired Chime executive Daniel Gonzalez as VP, customer experience and compliance for the company.

The hire follows a $4.3 million seed funding round as Copper, which has a waitlist of tens of thousands of teen users, gears up to move out of beta testing, according to a report in Finextra.

At Chime, Gonzalez was head of member services, helping to create a successful fintech that was worth more than $14 billion. At Copper he will lead the customer experience that connects parents and teens to an app and debit card to teach teens to make smart financial decisions.

“As the demographic focus shifts to teenagers, consumer behaviors, expectations and needs are changing, and the market landscape has evolved. Copper is ideally placed to capitalize on this disruption and to deliver real long-term benefits to a new generation of bank customers,” Gonzalez said in the report.

JPMorgan begins digital currency test

JP Morgan Chase has begun commercially testing its digital currency, JPM Coin, for use in cross-border payments by a large technology client. In beginning the testing phase, JPMorgan also decided to create a new business to house its blockchain and digital currency efforts called Onyx, according to a report by CNBC.

“We are launching Onyx because we believe we are shifting to a period of commercialization of those technologies, moving from research and development to something that can become a real business,” Takis Georgakopoulos, Global Head of Wholesale Payments, JPMorgan Chase told the news outlet.

Blockchain has attracted billions of investment dollars but has not produced a lot in the way of results yet. JPMorgan’s move could encourage greater interest in digital currencies. Cryptocurrencies enjoyed a great deal of attention lately when PayPal announced that users could soon buy, hold and sell crypto directly from their PayPal accounts.

JPMorgan is focused for now on relieving pain points in the world of wholesale payments, especially in cross-border payments. The goal would be to have banks confirm payments have the proper account information and regulatory format before they are sent, preventing expensive rejections.

Fintech News Issue #288

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Icon Solutions Lands Strategic Investment from JP Morgan

U.K.-based payments technology provider Icon Solutions is getting a boost today from U.S. banking giant JP Morgan in the form of a strategic investment.

The amount of the investment, along with specific terms of the deal, remain undisclosed.

“We’re excited to support Icon with this strategic investment as they look to continually build a simplified, collaborative payments ecosystem, driving emerging payments rails and innovation,” said Sara Castelhano, EMEA Head of Payments, Digital, and Solutions at JP Morgan Wholesale Payments.

As part of today’s deal, Icon has added Castelhano, to its Board of Advisors.

Icon will use the funds to expand development of its Instant Payments Framework technology, a collaborative, open source payments platform that helps clients process instant payments.

To facilitate these instant payments for U.S. clients, Icon has teamed up with The Clearing House to offer an accelerated route to accessing The Clearing House’s (TCH) real-time payments system. The company has also partnered with Featurespace to facilitate integration and block fraud attacks at scale and in real time.

“We will directly benefit from the support, scale and insight of a global banking leader and one of the most visionary technology companies in the world, while retaining our flexibility and independence,” the company said in a blog post. “We can now accelerate our strategic roadmap, invest more in our technology and team, and expand our geographic reach.”

The investment comes at a pivotal time in the U.S. payments scene. The U.S. Federal Reserve is lagging behind the rest of the globe in launching a real-time payments and settlement service, anticipating a delay until 2024. As the current speed of payments fails to meet consumer expectations, which have evolved to demand the delivery of everything from messages to groceries in real time, private players are coming to the market with their own solutions.

Photo by Elena Putina on Unsplash

Use of AI in Mortgage Business

Organizations are increasingly using efficient technologies to harness and harvest data to deliver new and more efficient service bundles to customers. Regulatory standards such as Dodd-Frank and PSD2 have forced organizations to manage and use data more efficiently. 

Large amounts of data are handled by all financial service sectors—payments, lending (unsecured and secured), insurance and wealth, and banking. Consumers of this data are both internal and external to financial institutions. Big Data demonstrated its capability to harvest large volumes of data, especially unstructured data (also known as dark data). Therefore, it is a widely preferred choice of technology at present.

Account aggregation or financial data aggregation solutions were initially used by wealth management and personal finance management advisors. However, they are now used across the global financial sector. Data aggregation is one such component offered exclusively by some FinTech players, as well as managed internally by larger industry players.

Mortgage lenders recognize the need to operate in this fast-changing landscape. Mortgage aggregators, i.e., enti …

Behind the Idea: Elavon

Payments have evolved rapidly over the last few years. According to the Financial Times in 2019, M&A activity in payments peaked with over 250 deals inked worth more than $140 billion. Through consolidation, the industry gained talent, deeper capability and created new efficiencies of scale. Now with the impact of COVID-19, the payments business is better placed than ever to help companies operate post-lockdown.   

In the wake of the pandemic, Elavon’s customers had unique challenges depending on their sector and geography. After the initial lockdown, many businesses were able to reopen by adapting hybrid e-commerce and in-person models. Fine dining establishments began to offer takeaway delivery. Trendy boutiques set up eShops complementing their physical stores. Enterprises of all sizes employed new health and hygiene measures for social distancing. Technology and infrastructure supporting digital payments became vital.    

With Elavon’s recent acquisition of Sage Pay, renamed Opayo, and by working with partners, including Santander UK, talech, and others, we helped businesses reconsider their operations, payment and distribution capabilities through a fuller set of e-commerce, app, pay-by-link and cashless support. As fintech and payments have integrated further, there are now more creative payment solutions available to help companies successfully emerge. 

Hannah Fitzsimons

Hannah Fitzsimons is the President and General Manager of Elavon Merchant Services in Europe. She is responsible for revenue and growth, leading 1,600 employees across seven countries. Hannah also served as a board member of the UK Finance subcommittee and is a member of Visa’s UK Council. She is a strong advocate for diversity and gender parity and is a Women in Payments mentor.

What has been the traditional company response to financial technology innovations?

Payments are just one part of fintech. Merchants are looking for efficiencies and want to optimise the payments experience for their customers. Payments are essential to our social and financial fabric and as such, highly-regulated. The implementation of new rules and corresponding innovations can take time. For example, PSD2 (the Second Payments Directive) which will improve security, reduce fraud and support frictionless customer journeys, has required intense collaboration between the issuers, acquirers and card schemes. They have had to work together to define, harmonise and agree to new specifications. It’s a profound undertaking and has not happened overnight. Ultimately, it will provide a better payments experience across the board and stimulate innovation and competition.  

How has this changed over the past few years?

With regards to PSD2, Elavon was one of the first acquirers to develop EMV 3-D Secure 2.0™ and has been helping merchants undertake Strong Customer Authentication (SCA) in time for enforcement starting 31 December 2020. Constant communications with customers have been vital. We have focused on helping them understand the rules, and make any necessary changes needed for uninterrupted payments acceptance.  

Is there anything that has created a culture of change inside the company?

Elavon is and always has been a transparent and ethical company. COVID-19 highlighted the importance of collaboration despite physical distance. Many employees have had different experiences working from home. People faced individual challenges with regards to health, with child care, as carers and so on. In response, we are listening and communicating more. We have encouraged flexible working, offered employee assistance programmes and child care support, in some cases. Alongside this, we provided paid time off for volunteering and held a virtual fitness challenge to raise awareness of our Women’s Business Resource Group.  

The other major event driving change was the death of George Floyd and the global call to action to do more with respect to Diversity, Equity and Inclusion. U.S. Bank [Elavon’s parent company] is a leader in this area. It has been named a Top 50 Company for Diversity by DiversityInc and recently committed $116 million to help bridge social and economic gaps and enhance opportunities for people of colour. 

What fintech ideas have been implemented?

The payments industry has seen a raft of changes this year, resulting from COVID-19. Cashless payment has accelerated, and contactless spending limits have increased across Europe. Likewise, e-commerce is on the rise across all age groups and demographics. Our recent survey with IPSOS Mori found that 47% of people (55-75 years old) in the UK are spending more online now than before COVID-19. Opayo, who we recently acquired, saw a 30% rise in May and a 52% increase in June in the number of e-commerce enquiries as businesses seek to move online or adapt their operations. 

What benefits have these brought?

Contactless and cashless payments are helping businesses operate in a safer and more secure manner. Merchants have thought practically about health and safety and how to best adopt the right technology. Retail customers are changing their store layouts, using mobile point-of-sale (mPOS) to encourage social distancing, setting up eShops for the first time and deploying ‘Click and Collect’. Restaurants and pubs with limited seating are using online booking as well as touchless payment and ordering systems. Niche sectors, like parking, are going strong with consumers using apps to plan ahead to reserve parking. Integrating payments capability is crucial for efficiency and pleasing customers who are looking for ease and security. 

Do you see any other industry challenges on the horizon?

Consumer confidence and economic recovery continue to be volatile. For now, we’ve seen some positive signs. In August, consumer spending levels increased for the first time since February with more people shopping online and returning to restaurants, bars and pubs, primarily through the ‘Eat Out to Help Out’ government scheme in the UK. 

Fraud is a perennial issue, especially with card-not-present (CNP) transactions. With the recent acceleration of e-commerce, PSD2 and strong customer authentication are now more timely than ever to help tackle security challenges. 

Can these challenges be aided by fintech?

If current trends continue, the payments ecosystem will continue to become more integrated and frictionless. Elavon has prioritised innovation. Our digital and innovation teams in Europe and North America are developing Proof of Concepts (POCs) on a variety of topics and applications, including artificial intelligence and biometrics. 

I encourage my teams to scan the horizon, understand the trends, and become deeply acquainted with the challenges our customers and partners face. It comes down to asking the right questions, listening and working together, so we are agile and responsive.  

  • Gina is a FinTech journalist (BA, MA) who works across broadcast and print. She has written for most national newspapers and started her career in BBC local radio.

Open Banking Platform Tarabut Gateway Expands to UAE

Tarabut Gateway, the MENA region’s first and largest regulated Open Banking platform, announced that it has launched in the United Arab Emirates. The company has simultaneously opened two new offices at Abu Dhabi’s global tech ecosystem, Hub71 and Dubai’s DIFC FinTech Hive.

The business is led by Abdulla Almoayed, CEO and founder of Tarabut Gateway, who has more than 15 years of investment experience across various sectors, with a specialism in digital transformation of the MENA region. He is a strong advocate for putting data ownership into the hands of consumers and increasing access to financial services through emerging technologies.

“We are delighted to open our new offices in Abu Dhabi and Dubai and accelerate the opportunity for Open Banking in the United Arab Emirates. With the strong leadership and cooperative spirit of both Abu Dhabi Global Market (ADGM) and DIFC, businesses can innovate in a transparent environment and work together towards advancing the financial services sector,” Almoayed said.

“Our aim is to drive the next 50 years of banking technology and financial services in the UAE, in collaboration, rather than in competition with, existing institutions. By working hand-in-hand with government authorities, banks and fintech entrepreneurs, Open Banking can propel the country towards its UAE Centennial 2071 goal of becoming a more diversified and knowledge-based economy, helping the UAE tap into the Open Banking industry which is set to reach a global market size of $43 billion over the next five years.”

Open Banking is the sharing of financial information electronically and securely, with the consent of the customer. Through an Open Banking API, or application programming interface, it allows third-party financial services providers to access financial data and develop new apps and services. It provides customers with a better experience and products that suit their needs. Tarabut Gateway offers a proven regional model and is already a trusted Open Banking partner connected to 17 retail banks, having successfully built the largest multi-sided open API infrastructure that launched in 2019. Through its secure and universal open API platform, Tarabut Gateway creates opportunities and fosters collaboration between financial institutions and fintechs.

Almoayed added: “Open Banking is an essential part of global transformation and it is no longer a case of when is the right time, because that opportunity is right now. We have already been brilliantly supported by our partners at Hub71 and DIFC FinTech Hive to establish our new offices and we look forward to working collaboratively with regulators, banks and fintech to unlock the potential of Open Banking in the UAE.”

The establishment of its offices across the UAE adds to the global presence of Tarabut Gateway in Bahrain and the United Kingdom, as the business continues its rapid expansion. Tarabut Gateway has been leading the Open Banking agenda in MENA since 2017, and has extensive experience working closely with banks across the region to power their digital transformation journeys.

Clover ushers in touchless dining feature

Restaurants using Clover’s point-of-sale platform from Fiserv Inc. are now able to offer guests a touchless experience from order to payment.

The new “Scan to Order” feature for Clover-equipped restaurants gives guests the ability to scan a Clover-generated QR code with a smartphone camera, access a digital menu, select their orders and securely pay, all within a touchless, digital environment, according to a press release.

In addition to facilitating a touchless experience, Clover said that Scan to Order enables operating and cost efficiencies, such as:

  • Enabling servers to cover more tables, drive faster table-turns and larger transaction volumes.
  • Eliminating the need to update and print paper menus.
  • Increasing security of customer payment data with encrypted digital payments processed through the Clover POS system.

“The digital menu feature of Scan to Order saves us time and money by allowing us to completely eliminate three types of printed menus, saving us hundreds of dollars per week,” Ben Bate, co-owner of Ludwig’s German Table in San Jose, California said in the release. “We can update a single online menu on the spot to highlight specials or remove sold-out items. And now we usually sell-out of the daily specials that appear at the top of our digital menu.”

Clover has distributed more than a million devices globally and processed more than $100 billion in annualized payment volume. Its business-management platform enables businesses to maximize operating efficiencies while giving customers the ability to pay using a debit or credit card or via mobile payment options such as Apple Pay, Samsung Pay, and Google Pay.

“As COVID-19 continues to disrupt communities across the country, restrictions limit operations, and delivery service surcharges eat away at profit margins, table service restaurants remain among the most severely impacted businesses,” John Beatty, co-founder of Clover said in a release. “With the launch of Scan to Order, we are helping our restaurant merchants get back to business, responding to the way customers want to interact with a touchless order and payment process that is safe, convenient, and cost effective.”