This article has been published in partnership with Nik Milanović (author’s bio at the end of the article) and taken from This Week in Fintech, his weekly newsletter.
Quote of the Week
“A new generation of fintech infrastructure companies is building APIs that can facilitate consumer-permissioned access to the data held in payroll systems.”
–Alex Johnson (source)
Read of the Week
The UK finally published the much-awaited Kalifa Review of UK Fintech. Some interesting statistics from the report: UK FinTech generates £11 billion in annual revenue, 71% of UK citizens interact with at least one FinTech company, and UK FinTech makes up 10% of the global market. The report proposes a five-point plan including easing stock listing and visa requirements so that more FinTech companies can be established and raise funds. Elsewhere, UK banking trade body UK Finance laid out a plan for a successor entity to the Open Banking Implementation Entity, which manages the rollout of open, API-based banking in the country.
Stat of the Week
“In 2020, those who have fallen behind at least three months on their mortgage increased 250% to over 2 million households, and is now at a level not seen since the height of the Great Recession in 2010.” (Source: CFPB. h/t Ohad Samet)
Financial Services & Banking
- Australia’s debit card system provider Eftpos announced that it would roll out a QR code payments network.
- Ecobank Nigeria launched money transfers through WhatsApp, SMS, and e-mail.
- Citibank launched Citi Plus, its digital bank in Hong Kong.
US credit unions have started to gain market share in credit cards, personal loans, mortgages, and auto loans for the first time since 2015.
Indian juggernaut Reliance has partnered with Facebook, Google, and FinTech Infibeam to set up a national real-time payment network to rival the NPCI system and reduce concentration in payments.
Zelle partnered with The Clearing House in the US to facilitate instant P2P payments using the latter’s RTP Platform. Payments Canada picked debit network Interac to roll out its real-time payments network. Chinese banks MYbank and WeBank, backed by Ant Group and Tencent, are joining the Chinese government’s central bank digital currency project.
Walmart hired Omer Ismail away from Goldman’s Marcus, bringing it a step closer to its ambitions to build a bank or (more likely) a Cash and WeChat-like super-app. (Goldman, meanwhile, is adding 100 tech hires to its Singapore office.)
The Bank of Ireland will shut down 88 branches—a third of its network—as it pivots to a digital strategy. Lloyds Bank, meanwhile, is looking to step up FinTech partnerships as it pivots to online services.
- LendKey launched Aliro, a private network that will enable financial institutions to buy and sell consumer loans, which should hopefully add needed liquidity and secondary trading to the FinTech consumer loan market.
- Mexican mega-retailer Oxxo is coming out with a digital wallet.
- Venmo launched its business profiles for small businesses.
- Lithuanian startup kevin. released an interesting product that will let consumers switch from using a credit card to making a direct payment out of their bank account (which is cheaper for merchants) mid-checkout.
- Plaid launched its income verification API (similar to Argyle or Pinwheel), Plaid Income.
- Latin American consumer finance platform Arcus launched its proprietary payments network, Arcus Pay.
- Amazon opened a cashierless ‘just walk out’ store in London.
- Google Finance added crypto prices.
Banking-as-a-Service provider Unit partnered with Plaid to enable customers to more seamlessly build accounts, cards, payments, and lending products. Elsewhere, embedded payroll startup Check partnered with Plaid.
SoftBank is working on merging PayPay and LinePay, the two Japanese consumer payment apps with a combined 75 million users. Payments firm PayPal, meanwhile, is in talks to buy Curv, a cryptocurrency custody firm.
Square Financial Services, the FinTech giant’s banking arm, opened up shop to begin accepting deposits and making loans. Elsewhere, Square bought a majority stake in Jay Z’s streaming service Tidal. Revolut is also capitalizing on its banking license, switching customers in 10 European countries to its bank arm.
Zillow will now make cash purchase offers (like Opendoor’s) for residential properties.
Opera’s African payment venture OPay processed $2 billion in transactions in December. Paytm reached 1.2 billion monthly mobile transactions in India. Teen banking app and card Step reached 1 million users. Personal finance app Dave donated $50,000 to Feeding America to support Texas storm-affected communities.
Revolut, Starling, and Wise joined a new UK FinTech task force called Tech Zero to tackle climate change. Meniga partnered with Icelandic banks to help consumers track the carbon footprints of their transactions. FinTech incubator F10 will partner with New Energy Nexus to create a global green and climate FinTech program. The UN highlighted FinTech as playing a valuable role in the climate-focused Paris Agreement. It seems that climate-focused FinTech is here and growing quickly.
More and more neobanks are competing to serve underbanked and minority customers.
Mouro Capital, Santander’s venture arm, is partnering with portfolio companies Clikalia and Creditas to create an online property sales platform in Mexico.
Greensill Capital, a SoftBank-backed receivables financing FinTech, is filing for bankruptcy in the US this week after failing an audit from BaFin, Germany’s regulator, and as Credit Suisse looks to wind down its $10 billion joint venture with the firm.
How is Swish, the Zelle of Sweden, doing?
In collaboration with Ben White
Two FinTech industry groups merged to form the American Fintech Council, which represents firms including LendingClub and SoFi.
- Nomination hearings for SEC and CFPB clarified key positions for Gary Gensler and Rohit Chopra, including reviewing payment for order flow and increasing enforcement.
- The House Financial Services Committee scheduled a second GameStop hearing, set for March 17.
- The FDIC named Sultan Meghji its first Director of Innovation after a 2.5-year search.
- The Federal Reserve named Sunayna Tuteja its new Chief Innovation Officer.
- The OCC is hosting Innovation Office Hours from March 17 to March 18. Sign up here.
- The World Bank held a webinar on global approaches to open banking regulation, with a focus on Brazil and South Africa.
- China issued new regulations set to rein in online lenders, including demands for lenders to fund 30% of loans using their own capital.
- In a regulatory filing, Robinhood said it has received inquiries from the SEC over its decisions to halt trading.